Triangle Petroleum, Kerogen Resources drilling Arkansas’ Fayetteville shale gas

Calgary’s Triangle Petroleum Corp. and Houston’s Kerogen Resources Inc. have begun drilling Arkansas’ Fayetteville shale. The partners equally share in a joint venture to explore 17,000 gross acres in Conway and Faulkner counties.

The Fayetteville shale in the Arkoma basin is touted as the geologic equivalent of the prolific Barnett shale found in the Fort Worth basin.

Triangle and Kerogen shot a 3D seismic program covering 12 sq miles in Conway County, Arkansas, in spring 2007, have drilled their first vertical test well, and plan to drill four more wells through the end of the year. The companies will use horizontal wells and multistage fracture stimulation to develop the reservoirs.

Fayetteville shale

The Fayetteville shale is one of eight major shale-gas plays in the US. The Fayetteville trend runs through the Arkoma basin in Arkansas; it’s the geologic equivalent of the Caney-Woodford shale found in the western Arkoma basin in eastern Oklahoma and the Barnett shale in North Texas.

Southwestern Energy Co. discovered the Fayetteville shale play in 2004 and is the largest acreage holder with about 900,000 net acres, followed by Chesapeake Energy Corp.

Southwestern Energy describes the Fayetteville as an unconventional-gas reservoir ranging in thickness from 50 to 550 ft and in depth from 1,500 ft to 6,500 ft.

As of June 30, 2007, Southwestern had drilled and completed 303 wells (as operator) in the Fayetteville shale play, including 246 horizontal wells (OGJ Online, Aug. 2, 2007). Southwestern drilled in 13 areas across eight Arkansas counties, including Franklin, Conway, Van Buren, Cleburne, Faulkner, and White.

Oklahoma City-based Chesapeake Energy calls the Fayetteville shale one of its six most important unconventional-gas plays. Chesapeake characterizes its Fayetteville leasehold as “second largest in the core area of the play,” (390,000 net acres) but says it’s the largest overall leasehold owner (1.1 million net acres).1

Chesapeake operates 12 rigs and plans to develop the field with horizontal wells and 80-acre spacing in the core area. The company said each well costs about $2.9 million to and will produce about 1.6 bcf-equivalent from 3,000-ft horizontal laterals.1

Other publicly held US operators involved in the Fayetteville shale play include: Contango Oil & Gas Co., Edge Petroleum Corp., Noble Energy Corp., and XTO Energy Inc.

Fracturing

Like other tight shale gas plays, the key to successful completions is hydraulic fracturing.

Schlumberger is the largest provider of frac services in the Fayetteville play and works under contract to Southwestern Energy. Of the 246 horizontal Fayetteville shale wells drilled by Southwestern, 219 were fracture stimulated with slick water or cross-linked gel fluids.

Although two of the largest frac service providers, Halliburton and BJ Services, have steered away from the area, Cudd Well Control and Calfrac Well Services Ltd. entered the Arkoma basin earlier this year.

Cudd Well Control is a division of Cudd Energy Services, a subsidiary of holding company RPC Inc. Cudd runs frac fleets in the Arkoma basin from an office in Elk City, Okla.

Calgary-based Calfrac established an office in Beebe, Ark., to service a 2-year take-or-pay contract signed with Chesapeake Energy late in 2006. Calfrac has relocated two frac equipment spreads to Arkansas; the first fleet started Mar. 8, 2007, and the second fleet began working June 4.2

Drilling

Triangle and Kerogen spud their first vertical test well, Ed Gordon WMA 1-10, in February 2007 with Nabors Rig 113, a conventional double (Fig. 1). The Conway County well reached the targeted 8,300 ft in April.