Gas sales starting from Indiana's fractured New Albany shale

Edward D. Minihan, Ray D. Buzzard
Minihan/Buzzard Consulting Geologists
Fort Worth

The Indiana Department of Natural Resources, Division of Oil and Gas issued 138 drilling permits from Dec. 1, 1994, through July 31, 1996, in 17 counties in a growing play for gas in Devonian New Albany shale in southern Indiana.

The permits are active in the form of locations, drilling wells, wells in the completion process, and wells producing gas in the dewatering stage.

At the time of writing the authors knew of no well that has been abandoned as unproductive from New Albany in this current exploration effort.

Harrison County on the Ohio River, where gas production from New Albany shale was established by 1912, has had the most activity. We count 63 active operations in the county, mostly in and around the old abandoned producing New Albany shale fields (Fig. 1 [49352 bytes]).

Jet/Hunting, Traverse City, Mich., is the most active operator in the county with 32 permits. Mercury Exploration Co., Fort Worth, has 26 permits. Mercury is redrilling Laconia field.

Other counties and numbers of permits issued are Orange 15, Greene 13, Crawford nine, Washington seven, Sullivan seven, Lawrence five, Vigo three, Daviess, Clay, Warrick, Jackson, and Pike two each, and Owen, Floyd, and Dubois one each.

The most active players with permits in the trend are Jet/Hunting 40, Jet/La Vanway five, both of Traverse City, Mich., Mercury 25, Minihan Oil & Gas (Seminole Land & Cattle Co.), Seminole, Okla., 11, Four Sevens Oil Co. Ltd., Fort Worth, 11, Cabot Oil & Gas Corp., Coraopolis, Pa., 10, Vista Resources, Pittsburgh, Pa., seven, Dart Oil & Gas Corp., Mason, Mich., six, Kestrel Resources Inc., Dallas, five, Deka Exploration Co., Oklahoma City, four, and nine other companies with one or two permits each.

Two companies were selling gas from New Albany in mid-August. Mercury is selling gas from Laconia field to local utilities, and Minihan Oil & Gas is selling gas from Simpson Chapel field in Greene County to Citizens Gas & Coke Utility, Indianapolis. Jet/Hunting is planning a gathering system for its wells.

Other operators with acreage positions in the play with New Albany drilling plans this year include Wilco Properties Inc., Dallas; Texas Crude Inc., Fort Worth; T.G. Shaw Oil Co., Fort Worth, Basin Fuels Ltd., Weatherford, Tex., GAR Oil Co., and Minihan/Buzzard, Fort Worth, and Bergstein Oil & Gas, Cincinnati.

New Albany geology

Geologically in southwestern Indiana the New Albany shale exploration play is found in three provinces. These are the Wabash platform, the Terre Haute reef bank, and the Vincennes basin.

Exploration permits issued on each of these geologic provinces are as follows: Wabash platform 103, Terra Haute reef bank 33, and Vincennes basin two.

New Albany shale production was found in Harrison County on the southern end of the Wabash platform in 1895, and development drilling outlined several shallow fields. Recent drilling in Big Sandy field in Kentucky has shown that a bore hole does not deplete a wide area around the well. This is one of the reasons for the heavy new drilling in Harrison County.

The authors use Loogootee North gas field in Martin County, Ind., 5 miles northeast of Loogootee, as a type field for the Terra Haute reef bank. Harold Sorgenfrai Jr. wrote an excellent history of New Albany shale gas production in Indiana as a master's thesis in 1952. He wrote that Loogootee field had nine producers and nine dry holes. The dry holes occurred because the operators could not handle water production.

New Albany operators now rig up to handle water during the dewatering phase, knowing that no gas/water contact will be encountered. Several wells in Loogootee field had initial production rates of 2 MMcfd. In an effort to keep from producing large volumes of water early, operators in Loogootee field began to penetrate only the upper portion of the Clegg Creek member of New Albany and stimulated the wells with nitroglycerin in an open hole.

Minihan Oil & Gas (Seminole Land & Cattle) is selling gas from its wells at Simpson Chapel field in Greene County, which are being dewatered (OGJ, Apr. 29, 1996, p. 69). The wells use gas produced on the lease for the pumps and compressor because of the lack of three phase electricity. Three phase service is being installed shortly, but its absence last winter made operations extremely difficult because of inherent problems with gas engines in cold weather.

The authors feel that the quantity and effectiveness of communication of fracturing in the shale will control gas production and water production. A rule of thumb in a desorption reservoir is that the more water a shale well makes in the beginning the more gas it will make when dewatered.

Structure and stratigraphy do not seem to have much influence on a well's ability to produce. In the final analysis structurally high wells may prove to be more fractured than wells in structural lows, but at time time that does not seem to be the case based on the paucity of well control.

Play status

Exploration and development of the New Albany shale in southwestern Indiana offers an oil company an opportunity, one not readily available in many projects, to put reserves from other formations behind pipe.

Four and possibly five potential producing zones that produce from stratigraphic or combination structural/ stratigraphic traps in the Illinois basin must be penetrated while drilling New Albany shale wells. This additional information provides an exploration department with a great amount of stratigraphic information that would not be possible to obtain in normal drilling operations.

Most companies are not releasing completion information on individual wells. Minihan (Seminole) used nitrogen foam as an agent, 60,000 lb. of sand, injecting at the average rate of 50 bbl/min at 950 psi.

Water production rates from the Minihan wells have little meaning until electricity is installed because the wells cannot be pulled at maximum rate. Fig. 2 [21205 bytes] is an expanded gamma ray curve on a 0-400 API unit scale of the New Albany shale from the Minihan 2 Cochrane in Simpson Chapel field, 20-6n-4w.

Because of the shallow depth, the omnipresent shale, good system of available fractures, steady and available market, longevity of production, reasonable development cost, and the serendipity of finding worthwhile shallow reserves while drilling development wells, the authors feel that for an exploration company the search for New Albany shale gas is a winner.