3D seismic propels Cotton Valley reef play

East Texas leasing action has been heavy because of the successful wells being drilled, and 3D survey activity continues to build as operator interest in the play mounts.

Marathon Oil Co., which recently disclosed several additional successful wells in the main play area covering Robertson, Leon, and Freestone counties, plans more drilling this year (see map, OGJ, Mar. 3, 1997, p. 25).

Meanwhile, companies are waiting and watching to see if the play may extend into North Louisiana.

While any extension of the play remains in question at this time, operators and companies now involved see the play as a potential "company-maker," with significant potential reserves to be had, if the upper Jurassic reef wells can be drilled and completed successfully.

Broughton's experience

Houston-based Brough- ton Associates JV, an active player, continues to gain better understanding of the play because of 3D and its participation in the three successful Riley Trust wells with Marathon and one with American Cometra Inc., Fort Worth.

"You're getting a good reflection character (on seismic), and the reefs are fairly obvious." said Keith Hatch, exploration vice-president for Brough- ton Associates JV/SK Resources Inc. (SK Resources is the general partner for the Broughton JV).

"We've had a couple of tight reefs, but we've done a lot of geologic work that makes us believe we have understandingellipsewhy these reefs may have lacked some of the porosities that some of the other reefs enjoy," Hatch said.

The JV sees the benefit of using vertical seismic profiling (VSP) as a drilling aid in identifying where reef bases and tops may be in areas where there is little velocity control on seismic. Said Hatch, "We want to try and pin down as closely as possible where we need to anticipate the top of the reef in particular wells."

The JV has successfully used VSP in a well where it had no velocity control at all, other than seeing some porosity streaks within the reef. VSP gave the JV greater ability to tie data together to better locate the reef's base.

The JV, through its Zackson Resources operating company, is using VSP in the 1 Verna Rachui, being drilled in Robertson County, about 400 ft south and west of Marathon's original 1 Rachui dry hole. So far, Zackson has penetrated about 400 ft of reef, "and we're looking to see how much deeper it may go," Hatch said.

Use of 3D allowed the JV to achieve a high rate of success drilling reef objectives, except for the 1 Camp Cooley, "which we got back-reef facies in," said Hatch. "It was part of the reefal complex, but back-reef. The rest of our wells have all hit directly on top of reefs."

The 1 Camp Cooley has been temporarily abandoned. The 2 Camp Cooley, a 16,000-ft test, hit a large reef during drilling but was experiencing mechanical problems late in February.

The JV has rights to about 430 sq miles of high-resolution 3D data and is acquiring another 200 sq miles of data. In partnership with Tulsa's Williams Exploration, it will obtain 60 additional sq miles of 3D data.

Recent successes

In February, Marathon completed two more pinnacle reef wells, 3 Riley Trust, classified as an exploration well in its Bohlwhite field area of Robertson County, and 2 Poth, a Pearwood field step-out, in Leon County (OGJ, Feb. 17, 1997, p. 66).

The 2 Poth, which flowed 31.7 MMcfd on test with 3,700 psi flowing tubing pressure, is in the largest reef accumulation that the company has encountered to date. The well was placed on production in mid-January. It is Marathon's highest deliverability well in the play.

Marathon's 1 Brounkow- ski, a 1995 Robertson County strike, at one time held the distinction as the trend's highest flowing well at about 30 MMcfd (OGJ, Aug. 5, 1996, p. 58). The 1 Brounkowski, a 14,760-ft well, opened Eichelson field.

Because it got in early via its acqusition of TXO, Marathon benefited initially from being able to selectively acquire acreage at relatively low costs. That is no longer the case, with lease costs in hot areas reportedly topping $1,500/acre last year and said to be climbing.

"The leasing has been very heavy, the leases are quite expensive, and any suggestion of a direction (of the play) really raises the price," said Ron Keisler, Marathon's vice-president, exploration.

Marathon has identified about 50 prospects, and it has about 350-400 square miles of 3D data in inventory. It holds interests in more than 90,000 net acres.

Gross production from 10 Mara- thon-interest wells totals almost 140 MMcfd currently.

Marathon plans to drill five Cotton Valley pinnacle reef wells this year, about the same number as in 1996.

Petroleum Information Corp. (PI) recently reported the company staked the 1 Taylor C, a 17,000-ft test on a 40-acre lease, about 15 miles southwest of Bohlwhite field in northeastern Robertson County. The 1 Taylor C spots about 51/2 miles west of Marathon's 1 Rachui, a 15,725-ft test, abandoned in July 1995.

Louisiana extension?

There's speculation the play could end up as far east as North Louisiana, sparked by reports of upcoming activity by Snyder Oil Corp., Fort Worth.

PI recently reported that exploratory work planned by Snyder could result in a significant eastward extension. Snyder officials, however, will only confirm details as reported by PI as "generally correct," noting that the company has yet to drill its first well.

PI reported Snyder is conducting its second 3D survey, totaling 110 sq miles. Snyder acquired 50 sq miles of data last year, according to PI, which also said Snyder could drill a well in Louisiana during fourth quarter 1997.

PI reported Snyder controls more than 600,000 gross acres in North Louisiana and said field sources indicated that Snyder's acreage is in Sabine, Natchitoches, and Winn parishes.

In addition, in disclosing Snyder's yearend 1996 reserves, Chairman John Snyder said the company's "exploration activity in the Cotton Valley reef play of North Louisiana...should progress significantly."

Fingers crossed

Tom Brown Inc., Midland, Tex., which started out playing the Spraberry trend in West Texas and has been a Rocky Mountain player for many years, first began studying the play in December 1995 and brought in Houston's American Exploration Co. (Amex) as a joint-venture partner. Interests are operator Tom Brown 60% and Amex 40%.

Tom Brown started leasing in January 1996 and had as many as 22 landmen at various times scouring East Texas to secure reef leases during a 6-month period in 1996.

Bill Granberry, Tom Brown president and chief executive officer, said, "It is an 'impact' play. The reserves and rates are big enough to truly have a big impact on a company our size."

Amex hopes the JV, which has grown to where it now covers 55,000 gross acres from 50,000 acres initially, will add a major new focus area to its exploration/development program. Current Amex focus areas include the Yoakum Gorge area of South Texas, onshore Texas and state waters of the Gulf of Mexico, and the Smackover trend in southern Arkansas.

Mark Andrews, Amex's chairman and chief executive officer, said, "If it works...we will have a multi-year, multi-prospect project, which could be hugely meaningful. We could be exposed to reserves that could double the size of our company."

Survey action

Seismic survey activity has been and continues to be intense. Late in 1996, PI reported more than 15 3D surveys had been shot along the reef trend.

"We're probably just in the early stages of the play," said Jim Paquin, American Cometra's chief operating officer. "I know that there's over 1,000 square miles of seismic being shot-or have been shot-and are being interpreted.

"Essentially, the entire basin is being leased and laid out to be shot. Ultimately...I expect the entire East Texas basin is going to be shot in 3D," Paquin predicted.

Western Geophysical recently wrapped up a 77-sq mile 3D shoot in northeastern Anderson County for the Tom Brown/Amex JV. Objective of the survey was to define a significant number of anomalies spotted on 2D over the JV's Lost Prairie prospect, situated on a 44,000-gross acre (36,000 net) block east of Palestine, Tex.

Participating in the shoot was another early entrant, Energy Arrow Exploration, which has operated and participated in about a dozen surveys, according to PI.

The JV has one other prospect, Lake Tyler, totaling about 11,000 gross acres (8,400 net) southeast of Tyler in Smith and northeastern Cherokee counties. The JV is considering a 55-sq mile 3D survey, and discussions are under way with Apache Corp. to participate.

Separately, in its own portfolio, Tom Brown has another pinnacle reef prospect known as Mount Selman. It covers 8,000 net acres in western Cherokee County. A 70-sq mile 3D survey is planned at a later date.

Sonat advancing drilling

Last November, Sonat Exploration completed the 1 Blanton in southwestern Freestone County, said to be the company's most significant well in the trend at that time.

The well, producing about 24 MMcfd, tested 40.2 MMcfd from perforations at 14,166-14,686 ft at 5,250 psi flowing wellhead pressure (OGJ, Nov. 18, 1996, p. 26).

The 1 Blanton spots about 1 mile northwest of its 1 Scurlock, a 14,372-ft discovery completed in fall 1996, which tapped a pinnacle reef at 14,330 ft (OGJ, Sept. 16, 1996, p. 57).

Last April, Sonat completed 1 Fountain, a 14,379-ft new field discovery in northwestern Leon County between McSwane and Branton gas fields (OGJ, May 6, 1996, p. 124). The strike tested 30.3 MMcfd with 5,060 psi flowing wellhead pressure.

Pat Clifford, Sonat's southern region E&P operations senior vice-president, said, "We believe that the significant recoverable natural gas reserves discovered by the Fountain, Scurlock, and Blanton wells make the Cotton Valley pinnacle reef trend of East Texas one of the most notable exploration successes that the company has had."

The 1 Fountain's reserves have been pegged at 70-80 bcf, the 1 Blanton's about 80 bcf, and the 1 Scurlock's about 40-50 bcf.

Sonat has more than 300,000 gross acres of leases in the Jurassic shelf areas of the East Texas basin, including some 240,000 gross acres of reef leases. Its net interest in reef trend acreage is about 60%.

Last November, Sonat disclosed a 50-50 joint-venture agreement with Amoco covering two pinnacle reef prospects south of the Beargrass area. Sonat, as operator, plans two ex- ploratory tests, the first early in 1997.

UMC also has a 30% working interest in a JV with Sonat.

Sonat plans to drill 19 Cotton Valley pinnacle reef wells this year and increase the number of rigs running to five from three by midyear.

More drilling

American Cometra's exploration effort got a boost from the sale of certain producing properties for $400 million in cash and stock to Lomak Petroleum Inc., Fort Worth, (OGJ, Feb. 17, 1997, p. 30). The sale recently closed.

The Cotton Valley pinnacle reef play is essentially American Cometra's total program for at least the next 1-2 years, officials say. It approached the play initially by looking for 2D leads on the shelf margin and bought acreage based on what it found using 2D.

American Cometra did not buy speculative data or take part in large-trend lease buying. Its leasehold now totals more than 100,000 gross acres. It has completed three 3D seismic surveys, acquiring more than 200 sq miles of data.

Veritas shot the first survey covering 60 sq miles on the prospect, dubbed Godzilla. Data processed from subsequent shoots continue to add to the company's prospect inventory.

"We're basically drilling for 20-50 bcf plus targets," said American Cometra's Paquin.

So far, the company has drilled five wells, including one dry hole, 1 Harcrow, which Apache sidetracked and recently plugged. American Cometra has completed three significant producers, 2 Watson in Leon County and the 2 Frost and 1 Pearlstone in Freestone County.

On extended test, 2 Watson flowed 10 MMcfd; 2 Frost, 25 MMcfd; and 1 Pearlstone, 12-13 MMcfd.

American Cometra is currently drilling the 3 Vann Unit, 2 Carbalan, and 1 HL&P in Leon County, all projected to about 16,000 ft.

Gas is being sold on an interim basis to Delhi while American Cometra completes its own processing/treatment plant in Freestone County. The complex, north of Buffalo, Tex., will have an 80 MMcfd capacity, expandable to 140 MMcfd.

Late in 1996, Tejas units Tejas Gas Marketing and Tejas Gas Pipeline Co. agreed to purchase and transport as much as 140 MMcfd of American Cometra's dedicated reserves in a deal with American Cometra affiliate Rockland Pipeline Co., a unit of Electrafina SA, Belgium, American Cometra's parent. First deliveries are scheduled to begin in May.

What's ahead

Some companies believe the most likely extension of the play is along the margin of the basin in a similar geologic setting, as indicated by the movement of operators into the Henderson County area and further north.

Key wells to be drilled this summer on farmouts from Amoco in Leon County, downdip from the Marathon 1 Poth and the initial TXO Marshall discovery, could dramatically expand the current play area.

"Those are strategically very important, because if they can demonstrate the presence of good porous reefs downdip, then that whole portion of the play will expand," said Broughton Associates' Hatch.

If exploration is successful on the east side of the embayment and also in Louisiana, essentially rimming the whole basin, "who knows how far the trend can go," said Amex's Elliott Pew, vice-president of exploration.

"In a way it's almost like moving into the deepwater Gulf of Mexico," said Pew. "There's a whole new area in an old basin with a new set of targets that had never really been explored before and drilled for, which industry is going after. You don't see that onshore very often."

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