EXPLORATION AND DEVELOPMENT FRONTIERS REPORT: World's frontier basins beckon exploration

May 17, 2010
Exploration is under way in remote, nonproducing, and underexplored basins worldwide.

Exploration is under way in remote, nonproducing, and underexplored basins worldwide.

The need to examine the potential of frontier areas may never have been greater. Production from these areas, if established, will supplement declines from traditional basins.

This report examines the Tucumcari basin of New Mexico, Alentejo and Peniche deepwater basins off Portugal, Rovuma deepwater basin off Mozambique, Cooper basin shale gas in Australia, two basins in Guyana, southern Egypt's Kom Ombo basin, Boise basin in Idaho, and the North Falkland basin.

Tucumcari basin, NM

A vast lease play surrounds several wells drilled by Shell Western Exploration & Production Co. LP in eastern New Mexico's Tucumcari basin, where an independent operator is also about to prospect for light crude oil.

New Mexico independents plan to spud a deeper pool exploration well in mid-May to test for light oil beneath a large, unexploited heavy oil deposit at Newkirk, NM.

Mar Oil & Gas Corp., Santa Fe, has received a drilling permit for the Thorpe State 1A, in 15-11n-25e, Guadalupe County. It is permitted to 3,500 ft or Precambrian basement.

The location is about 30 miles west of Tucumcari near shallow wells at Newkirk, discovered in the early 1960s. There, 60 million bbl or more of 15-17° gravity oil are estimated to be in place in Triassic Santa Rosa sands at 400-800 ft. Two technically successful steamflood pilots in the early 1980s produced only a few hundred barrels of oil before succumbing to mechanical problems and poor economics.

Geologist Jeffrey A. Roberts, of Monte Vista Exploration Co., Albuquerque, said, "Highly favorable potential for large reserves of conventional oil in the reservoirs below the near-surface level of oxidation remains untested."

Roberts generated the prospect based on the idea that some of the lighter oil that accumulated in the Santa Rosa might have been trapped in one or all of the Abo, Yeso, and Glorieta formations as it migrated up bounding faults of the Newkirk horst from Pennsylvanian source rocks preserved in the down-faulted flanks of the horst.

Glorieta sandstone, a porous and permeable blanket reservoir 200 ft thick and draped over the fault-bounded Newkirk high at a depth of 1,500 ft, is the principle target for conventional, unoxidized oil, Roberts said.

The deepest penetration on the Newkirk anticline, which appears to cover 8 sq miles at Glorieta level, is to 1,100 ft. Drilling stopped in the top of the Glorieta.

Mar and Monte Vista, by drilling three wells, will earn an interest in 10,000 acres in the area from private independents Cuervo Exploration LLC, an affiliate of Gunn Oil Co., Wichita Falls, Tex., and Ceja Corp., Tulsa.

The drillsites are located to test three targets on the anticline identified by well control, surface structure, and seismic surveys. The drilling of three wells will earn rights to the tar sands and any conventional oil discovered.

Meanwhile, Shell may have found a deep graben two townships west of Newkirk where it has drilled five wells, one of which went below 14,000 ft. The company, which has been working in the area since 2007, filed state completion reports on the wells that reflect perforations over several thousand feet of interval in what may be tight Pennsylvanian sandstone (OGJ Online, May 22, 2009).

Shell's drilling is 6-8 miles north of Latigo Ranch field, discovered in 1982 and never produced. It tested gas from Strawn sandstones at 6,658-6,764 ft. The gas analyzed 74 mol % methane, 9% ethane, and 5% carbon dioxide.

Numerous other companies have taken leases on several hundred thousand acres in the basin.

Portugal Atlantic deep water

A subsidiary of Brazil's Petroleo Brasileiro SA has signed an agreement to explore three blocks in the undrilled Alentejo basin in the Atlantic off southwestern Portugal.

Braspetro BV will become operator of the Gamba, Lavagante, and Santola blocks with 50% interest. The blocks total 9,000 sq km in 200-3,000 m of water between Lisbon and Sagres.

To the north off central Portugal, Braspetro already operates four blocks in partnership with Portugal's Galp Energia and Partex Oil and Gas (Holdings) Corp. in the Peniche basin. The Camarao, Ameijoa, Mexilhao, and Ostra blocks total 12,000 sq km in more than 2,000 m of water.

Rovuma basin deep water

Anadarko Petroleum Corp. drew from the largest 3D seismic project in the company's history in making an indicated discovery off Mozambique.

The company has interests in more than 6.4 million acres in the frontier Rovuma basin with geologic features Anadarko described as "similar to those in the US Gulf of Mexico."

The company reported cutting 555 ft of net gas pay in the Windjammer wildcat drilled to 16,930 ft in 4,800 ft of water 30 miles east of the Mozambique coast. About 479 net ft of pay lies above 14,000 ft, and 76 net ft are deeper.

Anadarko moved the Bedford Dolphin drillship 50 miles south-southeast to drill the Collier prospect, also in Offshore Area 1 (Fig. 1).

Anadarko is operator with an approximate 43% paying interest in Windjammer. Co-owners in the well are BPRL Ventures Mozambique BV 11.75%, Cove Energy Mozambique Rovuma Offshore Ltd. 10%, Mitsui E&P Mozambique Area 1 Ltd. 23.5%, Videocon Mozambique Rovuma 1 Ltd. 11.75%. The Mozambique state company Empresa Nacional de Hidrocarbonetos EP has a 15% interest and is being carried through the exploration phase.

The Anadarko-led group will drill two to four more wildcats in the basin this year, using results from Windjammer and Collier to determine which prospects are drilled next.

Mozambique's only hydrocarbon production, gas from fields onshore, moves by pipeline to near Johannesburg.

Shale gas, Cooper basin

Beach Energy Ltd., Adelaide, plans to drill the first wells in eastern Australia with shale gas as the sole objective.

The company aims to be producing gas from its first pilot shale project in 2011.

Holdfast-1 is to spud in July in PEL 218 in the Cooper basin, and a second well will follow 20 km southeast in the same tenement in northeastern South Australia.

"The Holdfast wells," Beach said, "will be located in the central Nappamerri Trough, which is one of the very few areas in Australia where thick, overpressured, organically rich shales are present at a depth which could make them economically attractive for the production of shale gas.

"The experience in the US has been that the cost to produce shale gas can vary widely between differing geological environments and that 'sweet spots,' such as the one we are targeting in the central Nappamerri Trough, could provide large volumes of relatively low cost gas which is very competitive with other gas sources."

Success in this first shale gas drilling campaign could lead to the establishment of a regionally significant gas resource with long-term potential to access multiple domestic and export markets, Beach said.

Beach is operator of the PEL 218 Permian Joint Venture with 90% interest, and Adelaide Energy Ltd. has 10%.

Guyana basins

Exploratory drilling is planned this year in two basins on land and off Guyana, South America, which has no oil or gas production.

Canacol Energy Ltd., Calgary, let a contract to Tuscany South America Ltd. to provide a 1,500-hp diesel electric rig to drill the K-2 exploration well in Guyana's remote inland Takutu basin. Mobilization from Oklahoma is to take until late June.

Canacol plans to drill K-2 to 11,000 ft measured depth at a bottomhole location 400 m northwest of the 1982 Karanambo-1 discovery well and will target the same reservoirs that tested more than 400 b/d of 42° gravity oil in 1982. The former Home Oil Co. Ltd. believed the interval, at 8,946-9,290 ft, covered Jurassic carbonates and Triassic basalt. Tubulars are on site for three wells.

Karanambo is nearly 300 miles southwest of oil production on Suriname's northern coast.

Meanwhile, CGX Energy Inc., Toronto, plans to drill a well on its Eagle Tertiary prospect in the Atlantic off Guyana in the fourth quarter of 2010. The well will test three prospects plus leads in the Campanian and Maastrichtian.

Consulting engineers issued a best estimate of the prospective resource for three prospects on the Corentyne license of 2.8 billion bbl of oil. No commercial discovery has been made in the Guyana offshore basin.

Kom Ombo basin, Egypt

Dana Gas Egypt plans to drill as many as 10 wells in 2010 in Al-Baraka oil field, first discovery in southern Egypt's Kom Ombo basin.

Full development of Al-Baraka in 11,446-sq km Block 2 will involve 30 wells at $2 million/well in 2010-12, and horizontal drilling and specialized fracturing techniques are being considered to maximize recovery, said 50% interest owner Sea Dragon Energy Inc., Calgary.

Sea Dragon said the field has 100 million to 240 million bbl of oil in place in three Cretaceous zones, of which it estimates 14-35 million bbl are recoverable. It has identified exploration upside on the larger block, along the Nile River between Luxor and Aswan, at 300 million to 1 billion bbl.

The AB-4 well tested 1,300 b/d of oil from 25 ft of pay in the Six HIlls E reservoir. The light, 37° gravity oil is trucked to a refinery in northern Egypt.

The first appraisal well is to target the Abu Ballas and Six Hills E and F zones and will be logged and cored extensively to evaluate all potential reservoirs. The field is producing 650 b/d from four wells, and only its northern part has been appraised.

The Chinese top drive drilling rig is rated to 10,500 ft, deep enough to evaluate the basin's entire geologic section.

Boise basin, Ida.

Canadian independents gauged gas at the stable rate of 4.2 MMcfd and 54 b/d of 61.5° gravity condensate at a remote discovery well 40 miles northwest of Boise, Ida., near the Oregon state line (cover of this issue).

The pay zone, a Pliocene sand, was not stimulated.

Bridge Resources Corp. and Paramax Resources Ltd., both of Calgary, are conducting successive tests at the five new field wildcats it has drilled in the nonproducing Boise basin, all within a few miles of the discovery in NE NW 10-8n-4w, Payette County, Ida. They cemented casing to test all five wells.

There was no early indication when sustained production might be possible, although a gas pipeline traverses the area. Idaho has not been a hydrocarbon producing state.

The following illustrates the remote nature of this series of wells:

  • 380 miles east of Mist gas storage field, Columbia County, Ore.
  • 350 miles north of oil production at Railroad Valley, Nye County, Nev.
  • 350 miles southwest of abandoned Blackleaf Canyon gas-condensate field on the Disturbed Belt near Choteau, Mont.
  • 300 miles northwest of Pineview field on the Overthrust Belt in Summit County, Utah.

North Falkland basin

Separate operators have logged indicated discoveries of gas and oil in the remote North Falkland basin in the South Atlantic off the Falkland Islands.

Rockhopper Exploration Ltd., Swindon, UK, said the 14/10-2 exploratory well on the Sea Lion prospect reached a depth of 2,744 m and that initial data indicate it to be the first oil discovery in the North Falkland basin.

Early data from wireline logs indicate that the well encountered a 150-m gross interval of sand and shales. The data show that the well has 53 m of net pay distributed in multiple pay zones, the thickest of which has 25 m of net pay. Porosity in the pay zones averages 19%.

Rockhopper was running more logs to determine whether to plug and abandon the well or suspend it for future testing. It is also considering whether to drill an appraisal well at Sea Lion later during the current drilling campaign.

The company plans to drill the Ernest prospect in the fourth slot of the overall Falklands drilling program.

Meanwhile, Desire Petroleum PLC made a gas discovery in April 2010 at the Liz 14/19-1 well. It was the first well drilled in the basin in 12 years.

Desire plugged and abandoned the Liz 14/19-1 well at a total depth of 3,667 m as a gas discovery. It cut 17 m of net hydrocarbon pay at 2,961-3,031 m in a zone of overpressured, mainly sandstone, reservoir. It also recovered dry gas from an interval below 3,400 m and found good oil shows in the Liz fan and oil shows in the Beth fan.

"In each case, though, reservoir quality was poor, and further detailed work will be undertaken to assess the results," Desire said. It called the well complex yet highly encouraging.

"Hydrocarbons have been found in at least two separate intervals, the geological model for the basin has been confirmed, and at least two petroleum systems have been found to be present, with hydrocarbon shows recorded over a wide interval."

Desire had moved the Diamond Offshore Drilling (UK) Ltd. Ocean Guardian semisubmersible 8,000 miles from the North Sea in 70 towing days. Rockhopper subcontracted the rig to drill Sea Lion and Ernest, and BHP Billiton subcontracted it to drill the Toroa prospect in the East Falkland basin.

Desire let a contract to Senergy (GB) Ltd., which estimated mean, unrisked prospective recoverable resources in the top 10 North Falkland prospects–Liz, Ann, Alpha, Dawn, Jacinta, Beth, Ninky, Rachel, Helen, and Pam–of more than 4.6 billion bbl gross, of which 3 billion bbl would be net to Desire (Fig. 2).

The drilling targets are at 1,500-3,000 m in less than 450 m of water. Senergy also estimated that mean gross unrisked prospect recoverable volumes range from 122 million bbl at Ninky to 1.631 billion bbl at Alpha

Ownership interests in Fig. 2 are green outline, Desire 100%; yellow, Desire 57.5%, Arcadia 35%, Rockhopper 7.5%; dark red, Desire 92.5%, Rockhopper 7.5%; orange, Desire 50%, Arcadia 50%; pink, Arcadia 80%, Desire 20%; gray, Argos 100%; blue, Rockhopper 100%.

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