OPERATORS PLAN U.S. DRILLING INCREASE IN 1990

Jan. 29, 1990
John C. McCaslin Exploration Editor Operators expect to drill more wells in the U.S. this year than they did in 1989, when crude oil prices increased nearly 21%. The oil industry last year drilled more. wells than the 27,935 completions forecast at midyear but not as many as the 36,500 predicted at the year's start. The average Baker Hughes rig count last year sagged to a modern record low of 869.

John C. McCaslin
Exploration Editor

Operators expect to drill more wells in the U.S. this year than they did in 1989, when crude oil prices increased nearly 21%.

The oil industry last year drilled more. wells than the 27,935 completions forecast at midyear but not as many as the 36,500 predicted at the year's start.

The average Baker Hughes rig count last year sagged to a modern record low of 869.

In contrast to crude prices, natural gas prices remained low most of the year. Unusually cold weather in November and December, however, raised gas demand and hampered production along the Gulf Coast.

The resulting gas price strength continued into this month, when temperatures rose, indicating the demand spurt may have shrunk the deliverability surplus that has been depressing gas prices and drilling.

Here are highlights of Oil & Gas Journal's early year U.S. drilling forecast for 1990:

  • The active rotary rig count will average 950, up 9% from 1989.

  • Operators will drill about 31,700 wells, compared with 29,800 completions in 1989.

  • They will drill more than 6,300 wildcats, compared with 5,333 in 1989.

  • They will drill 141 million ft of hole; well depths will average 4,461 ft.

  • Major operators will drill 5,470 wells in 1990 vs. 4,818 completions in 1989 and 6,103 in 1988.

  • Drilling in western Canada will total 5,620 wells in 1990, compared with 5,363 in 1989.

INCREASES COVER NATION

This year's slight drilling increase will be spread across the country.

In Alabama, for example, coalbed gas development has stimulated drilling. The industry plans to drill 725 wells this year.

North Dakota's Williston basin will see 180 wells drilled in 1990. Most of this action is horizontal drilling of the Mississippian Bakken play in the western part of the state. Through November last year, operators of Bakken horizontal wells had completed 25 wells without a dry hole.

Other North Dakota interest centers around Plaza oil field in southeastern Mountrail County. Turtle Mountain Gas & Oil Co. completed its second well in the field flowing 468 b/d of oil from the Bluell member of the Madison Mission Canyon of Mississippian age. A northeast offset has been staked. The discovery well flowed 272 b/d of oil. There are five producers in the field, four operated by HPC and one by Turtle Mountain.

Another busy area this year will be the Black Warrior basin of northeastern Mississippi and northwestern Alabama. Ladd Petroleum Corp. recently completed 1 Sanders 18-6, SE NW 18-17s12w, Fayette County, Ala., flowing 396 Mcfd of gas and 260 b/d of oil from Carter sand. And Pacific Enterprises Oil Co. 1 Grace in Pickens County, Ala., flowed 1.356 MMcfd of gas and 49 b/d of oil from the Lewis sand.

There will be 300 wells drilled in Mississippi this year.

Cretaceous Hosston gas-condensate production is a key objective in the state. Oryx Energy Co. recently reported a discovery in Jones County. Its 1 Smith flowed was 4.4 MMcfd of gas and 1,224 b/d of condendsate from 15,906-938 ft. The well is on the south flank of the Centerville salt dome. There continue to be Cretaceous Rodessa gas-condensate discoveries in Mississippi as well as lower Tuscaloosa oil finds in Wilkinson County.

OKLAHOMA REVIVES

Oklahoma activity has revived with exploration of the Cambro-Ordovician Arbuckle limestone and Pennsylvanian gas sands in southeastern parts of the state. An Arbuckle trend is shaping up from Mayfield on the northwest, through the Alden field area, then into Cottonwood Creek oil field in the Ardmore-Marietta basin of Carter County.

There is a brisk gas campaign in southeastern Oklahoma's Arkoma basin where ARCO just completed the 12th Arbuckle gas well under Wilburton field. Flow was 34.7 MMcfd of gas from 13,900 ft. This is part of a play that eclipses anything yet in the Arkoma basin. Another big find was Amoco 1 Scott Unit in Southwest Haileyville field, Pittsburg County, where flow was 18 MMcfd of gas from an unidentified zone below 6,100 ft, certainly Pennsylvanian in age.

In the past year, Amoco Production Co. has completed important wildcats and outposts on the Ouachita Thrust Belt: the 1 Zipperer, Pittsburg County, the 1 Garrett Unit "A", Pittsburg County, and the 1 Patterson, Latimer County. These wells flow a combined 82 MMcfd of gas from Pennsylvanian sands as deep as 13,200 ft.

Oklahoma operators plan to drill 3,000 wells this year.

TEXAS, LOUISIANA

Operators, mainly on the basis of oil and natural gas price expectations, plan to steadily boost exploration and development in the Gulf of Mexico.

There was a big increase in leasing activity, particularly by independents, during the 1988-89 area-wide lease sales in the gulf. Companies say they plan to drill much of this new acreage as soon as possible. Operators plan 700 wells off Louisiana this year, 250 off Texas. Both are increases.

Gas prospects are receiving most of the near term action in the gulf. Also fueling activity are large volumes of speculative 3D seismic data shot by contractors and acquired by lessees.

BP Exploration will spend $250 million on a Gulf of Mexico project in near record water depths. It will develop Mississippi Canyon Blocks 109 and 110 in 1,030 ft of water.

Onshore, deep drilling is under way along the Texas Gulf Coast in Wharton County.

ARCO plans a 14,000 ft wildcat 2 miles northeast of Hungerford field at 1 Ansley.

Operators plan fewer wells in District 3 this year, but statewide the total will climb considerably from 1988 to 8,098 wells.

A new Mississippian oil discovery was completed in Stephens County, West Central Texas, at Tex-Ann 1 Clark, 4 miles west of Crystal Falls, flowing 148 b/d of oil. Operators plan 1,198 wells this year in District 7-B and 700 in District 7-C.

They plan 1,060 wells in District 8 and 600 in District 8-A in West Texas, where Texaco Inc. completed a southwest extension in Glasscock County, flowing 433 b/d of oil.

There's a new gas field in southeastern Louisiana's West Feliciana Parish. The Florida Parishes find is Griffin & Griffin 1 Spillman, 47-1s-2w. Flow was 1.598 MMcfd of gas and 246 b/d of condensate from Cretaceous lower Tuscaloosa at 13,928-932 ft.

The middle Eocene Sparta formation is an important wildcat target in South Central Louisiana's Eocene-Oligocene trend.

Cumulative production from 20 multiple pay fields in this trend exceeds 269 million bbl of oil, 50 million bbl of condensate, and 1.5 bcf of gas.

Operators in South Louisiana expect to drill 560 wells this year.

OTHER AREAS

Michigan, where industry plans to drill 800 wells this year, has another deep gas discovery.

PetroStar and Elf Aquitaine extended Cambro-Ordovician Prairie du Chien gas production to the northwest in Missaukee County.

The 1-15 Riverside flowed 2.7 MMcfd of gas and some water. Total depth is 11,972 ft, the fourth deep well in the county.

In the Rocky Mountains, Wyoming's Wamsutter Arch is the scene for an Amoco discovery in Sweetwater County in the Greater Green River basin. The 1 Frewen Deep Unit flowed from the lower Cretaceous Lakota.

The state's largest basin, the Powder River, continues to tag new oil finds. The industry plans to drill more than 600 wells in the state this year, many of them in this basin.

Latest oil producer in Nevada's Kate Spring oil field is David M. Evans 2 Taylor-Federal in 3-8n-57e, Nye County.

The well was pumped for 268 b/d of oil from Devonian pay at 4,519-33 ft. The state continues to be a popular place for the wildcatter. The industry plans 30 wells in the state this year, 28 of them exploratory.

Deeper Paleozoic exploration continues to expand along the Colorado-Kansas line where several oil fields have been opened in recent months. Important new action is expected to increase in the Stockholm area. Kansas operators plan 2,400 wells this year, while Colorado will see 860 wells drilled, some in this new area, others in the Denver basin and in northwestern parts of the state.

In Canada, drilling is increasing in British Columbia. The industry drilled 212 wells in the western Canadian province last year and plans 250 in 1990.

Canadians believe the U.S. gas market will fuel a gradual increase in drilling.

Scurry-Rainbow may drill 32 wildcats in British Columbia this winter. Canadian Hunter devoted about half its $180 million 1989 capital budget to the province and accounts for almost one fourth of all wells completed in the region in 1989.

More than 1,100 gas and oil pools have been opened in northeastern B.C. to date.

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