Alan Petzet
Chief Editor-Exploration
The underexplored Miocene Monterey formation is easily the largest shale oil play in the US with more than 3 billion bbl proved so far, said Timothy Marquez, chairman and chief executive officer, Venoco Inc., Denver.
Venoco doesn't expect the Miocene to be as good onshore as it has been offshore in the Santa Barbara Channel South Ellwood field, for example, where estimated ultimate recoveries range as high as 12 million bbl/well and average 5 million bbl/well. About 11,000 wells have tested the Monterey onshore in the last 50 years, Marquez said.
The undeserved reputation of California as a difficult place to do business may have kept many exploration and production companies from entering the state, but that appears to be changing, Marquez said. Most drilling has been to shallower zones, more than 200,000 wells have been drilled, and major oil companies control 78% of the production in California, he added.
Characteristics of the naturally fractured Monterey formation compare favorably with those of most other US shale plays, he noted. Even in North Shafter field in the San Joaquin basin, where Monterey quality isn't as good, Venoco drew encouragement because numerous wells have cumulative production of 400,000 bbl of oil 20 years after completion with older technology.
Venoco drilled 11 Monterey wells last year. It plans to drill 22 development and 11 evaluation wells in 2011, focusing on the San Joaquin and Santa Maria basins and the Salinas Valley, and 50 wells in 2012.
Venoco and Occidental Petroleum Corp. should receive final data in the third quarter of 2011 from a 520,000-acre 3D seismic survey shot last year in the San Joaquin basin, the state's largest 3D shoot ever. The data will help in planning horizontal wells, Marquez said.
The company has drilled its first two Monterey horizontal wells in the Santa Maria basin and awaits four-stage fracs expected in a few weeks to test that technology vs. acid treatments that have worked well in the Monterey elsewhere. It is also drilling a horizontal Monterey well in the Salinas Valley. Most of the company's leases have 10-year primary terms.
Marquez urged the industry to focus on EURs rather than initial potential flow rates in reporting Monterey results.
Venoco, without an announcement, sold its small interest in Cat Canyon field in the Santa Maria basin in the 2010 fourth quarter as being fairly depleted in the Monterey, Marquez said.
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