More Unconventional News

TAX INCENTIVES SPUR DEVELOPMENT OF COALBED METHANE

Jun 10, 1991 Peet M. Soot Northwest Fuel Development Inc. Portland, Ore. With new wells continually being put on-line, estimates show that the nonconventional fuel tax credit is attaining the role which Congress had intended in encouraging unconventional gas production. A large number of wells have been drilled to produce coalbed methane in various coal basins in the U.S. The highest activity has been in the Black Warrior and San Juan basins. Each of these basins has reports of over 1,000 wells in

CLARKSVILLE FIELD, RED RIVER COUNTY, TEX.: PRODUCTION AND FACIES INTERPRETATION

Jun 10, 1991 Chris H. Reed Petroleum Geologist Tyler, Tex. Clarksville field was discovered in December 1985 by a well targeting a deeper Paleozoic horizon. Since production began in 1986, this field has produced more than 1 million bbl of oil with the appearance of a considerably longer and more lucrative life. The producing horizon is a Jurassic age lithic conglomerate sitting unconformably on the Paleozoic and Triassic structural front of the buried Ouachita range. Facies correlation out of the basin

U. S. BRIEFS

Jun 17, 1991 U.S. SUPREME COURT declined to block a lawsuit in which four western states claim seven major oil companies conspired to fix prices and create a gasoline shortage during the 1973-74 Arab oil embargo. In 1986, a federal judge dismissed the suit by Arizona, California, Oregon, and Washington, saying the states failed to prove a conspiracy. But an appeals court reinstated the suit and ordered a trial. Defendants are ARCO, Chevron Corp., Exxon Corp., Mobil Corp., Shell Oil Co., Texaco Inc., and

TEXAS' LIGHTLY DRILLED DALHART BASIN GETTING MORE OIL EXPLORATION

Jun 24, 1991 G. Alan Petzet Exploration Editor The Dalhart basin of the northwestern Texas Panhandle, the state's least drilled prospective area, is showing signs of another round of exploratory drilling. Horizon Oil & Gas Co., Dallas, opened ERT (Granite Wash) field in Potter County at 102 Bivins Ranch 9 miles north of Amarillo in early June. The discovery well pumped 105 b/d of 37.7 gravity oil and 48 b/d of water with gas too small to measure from perforations at 5,820-5,913 ft. Total depth is

U.S. BRIEFS

Jun 24, 1991 SOUTHWESTERN ENERGY CO., Fayetteville, Ark., will hike 1991 capital spending to $48.1 million from an original budget of $32.2 million. The revised amount in-cludes $37.9 million for exploration and production, $9.5 million for utility system expenses, and $700,000 for other expenses. EXXON CO. U.S.A. let a contract to Jacobs Engineering Group Inc., Pasadena, Calif., for construction and engineering services for a 7,000 b/sd methyl tertiary butyl ether unit at its Baton Rouge, La., refinery.

TIGHT GAS SAND TAX CREDIT YIELDS OPPORTUNITIES

Jun 24, 1991 Frank W. Lewis Petroleum Management Systems Del City, Okla. Ann S. Osburn Certified public accountant Norman, Okla. The U.S. Internal Revenue Service on Apr. 1, 1991, released the inflation adjustments used in the calculations of Non-Conventional Fuel Tax Credits for 1990.1 The inflation adjustment, 1.6730, when applied to the base price of $3/bbl of oil equivalent, adjusts the tax credit to $5.019/bbl for oil and 86.53/MMBTU for gas. The conversion factor for equivalent fuels is 5.8 MMBTU/bbl.

OGJ NEWSLETTER

Jul 1, 1991 Have U.S. gas prices finally touched bottom? While international trade in natural gas continues to grow (see story, p. 21), the U.S. gas industry continues to languish. Low gas prices and flat-demand are squeezing producers and pipelines alike. Nymex gas futures hit a record low of $1.118/Mcf at closing June 24, down more than 20 on the month and more than 40 from a year ago. Nymex gas rebounded slightly the next 2 days, settling at $1.142 June 26. Natural gas is often referred to as "the

U.S. BRIEFS

Jul 1, 1991 ENVIRONMENTAL PROTECTION AGENCY seeks $525,000 in penalties from Mobil Oil Corp. for allegedly failing to notify appropriate agencies after three releases of hazardous materials from its Paulsboro, N.J., refinery during 1989 and 1990. EPA said Mobil didn't immediately notify them of a 2,900 lb release of sulfur dioxide Sept. 26, 1989, 2,200 lb of hydrogen sulfide Dec. 4, 1989, and 450 lb Of SO2 Mar. 12, 1990. Mobil plans to meet with EPA July 3 to point out errors in the complaint.

U. S. BRIEFS

Jul 8, 1991 MOBIL CORP. settled lawsuits with six states over its advertising for Hefty degradable trash bags. The suits alleged Mobil misled the public in its environmental claims for the bags. Under the settlement, Mobil admitted no wrongdoing and paid each of the states $25,000 for consumer education programs or for cooperative efforts with the Federal Trade Commission to develop environmental advertising guidelines.

WATER-PACKING TECHNIQUES SUCCESSFUL IN GRAVEL PACKING HIGH-ANGLE WELLS

Jul 8, 1991 Douglas J. Wilson, Mark F. Barrilleaux Exxon Co. U.S.A. New Orleans Prepacking and waterpacking techniques were successful in gravel packing the long, highly deviated completion intervals (up to 445 ft at angles approaching 70) in the wells on the Lena guyed tower, located in the Gulf of Mexico. During 8 rig-years of operations, these techniques were used for both single and multizone completions. While some operators consider this technology antiquated, field experience at Lena demonstrates

COMPARTMENTATION, FLUID PRESSURE IMPORTANT IN ANADARKO EXPLORATION

Jul 8, 1991 Zuhair Al-Shaieb Oklahoma State University Stillwater, Okla. Basin compartmentation, introduced by Bradley1 and Powley,2 is an important concept in the exploration and production of hydrocarbons in deep sedimentary basins. Compartmentation can arise in a number of distinct ways through the interplay of sedimentological, mechanical, and chemical factors. These compartments are most easily recognized by their abnormal fluid pressures.

AOSTRA CLAIMS MAJOR OILSANDS BREAKTHROUGH

Jul 15, 1991 Alberta Oil Sands Technology and Research Authority (Aostra) has completed a horizontal well in situ steam injection project it calls a major breakthrough in commercially producing bitumen from the vast Athabasca oilsands deposit in Alberta. Aostra said its $71 million (Canadian) proof of concept pilot underground test facility (UTF) near Fort McMurray, achieved a 60% bitumen recovery rate, compared with less than 20% recovery typically achieved with Alberta bitumen. More than 100,000 bbl of

SECOND HALF WORK TO BOOST 1991 DRILLING IN THE U.S.

Jul 29, 1991 G. Alan Petzet Exploration Editor U.S. well completions in 1991 will increase about 8% compared with 1990 if operators stick with present spending plans during the second half. Operators are expected to realize $76.4 billion in wellhead revenues this year, 10.7% less than the 1990 estimate. However, they are expected to invest a larger share of those revenues in drilling this year than they did in 1990. With less than half the year remaining, here is Oil & Gas Journal's updated look at

CAPITAL FLIGHT FROM NORTH AMERICA

Jul 29, 1991 The outlook seems to darken daily for the North American exploration and production business. In a midyear look at oil company budgets for upstream operations, Salomon Bros. confirms the shift away from the U.S. and Canada. Companies surveyed by the New York financial firm plan to spend 13.9% more on worldwide exploration and production in 1991 than they did last year. But 24% of the companies in the survey are underspending their budgets in the U.S., and 20% report Canadian spending levels

U. S. BRIEFS

Aug 5, 1991 JAPANESE FLAGGED Tenyo Maru fishing vessel collided with the Chinese freighter Tuo Hai July 22 and sank off Washington's northwest tip, causing a spill extending 40-50 miles and reaching Shi Shi Beach in Olympic National Park. The Tenyo Maru carried 273,214 gal of bunker fuel and 91,071 gal of diesel fuel. The spill was estimated to be about 100,000 gal, killing scores of sea birds and threatening mammals in the area. Oil skimmers had collected about 21,000 gal of oil and water by July

OGJ NEWSLETTER

Aug 12, 1991 Just how bad will the natural gas bust get? More reports of reduced earnings, slashed budgets, and restructurings crop up in the wake of the lowest North American gas prices in years. John S. Herold Inc., Greenwich, Conn., expects U.S. gas prices to hit a 12 year low in 1991 and projects a bleaker outlook for Canadian gas prices. Its survey of 137 U.S. gas producers and 59 Canadian producers found 1990 U.S. gas prices rose 1% from 1989 with a weighted average of $1.76/Mcf. Average U.S. gas

U.S. BRIEFS

Aug 19, 1991 ATMOS ENERGY CORP., Dallas, let contract to CNG Services Inc., Midland, Tex., to build four public refueling sites for compressed natural gas vehicles in Texas and Louisiana at major oil company retail stations. Sites in Odessa, Lubbock, and Amarillo, Tex., will form the first U.S. network of CNG stations in a wide regional area. The station in Lafayette, La., will be that state's first public CNG refueling site.

MANAGEMENT PERSPECTIVE A VIEW OF GAS PRICE FORECASTS

Sep 2, 1991 Phillip A. Ellis Vice-President Booz*Allen & Hamilton Dallas This is the first of occasional articles on petroleum management issues. This is an anxious time for production and transportation of natural gas in North America. Prices have tumbled to a level that is causing serious stress in the industry. Columbia Gas is the most notable example of a player that has reached the breaking point, and other company crises are certain to occur upstream and downstream.

LOCATING NIOBRARA FRACTURES-1 USING RESISTIVITY TO ASSESS NIOBRARA FRACTURE PATTERNS FOR HORIZONTAL WELLS

Sep 2, 1991 Reed A.Johnson, R. Timothy Bartshe Energy Foundation Inc. Lakewood, Colo Recent interest in U.S. horizontal drilling has largely focused on vertically fractured plays such as the Bakken shale and Austin chalk. The Upper Cretaceous Niobrara formation, the chronological equivalent of the Austin chalk, has recently been targeted as a candidate for horizontal drilling in the Denver basin and other areas of the Rocky Mountains.

JOFREE SEES CONTINUED LOW U.S. GAS PRICES

Sep 2, 1991 U.S. wellhead gas prices will remain low through 1996, Jofree Corp., Houston, predicts. While U.S. demand for gas has increased about 2% since 1989, Jofree says gas supply has increased about 8-9%. "That abundance will dampen gas prices for at least the next couple of years," Jofree Principal Carol Freedenthal said. "Gas markets will improve during the next 3 years but only slightly. "New transportation projects in the Rocky Mountains, new import capability, and incentive driven coalbed methane
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