Woodford Shale - Natural Gas Field - Arkoma Basin Oklahoma
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What is the Woodford Shale Formation? The
Woodford Shale Natural Gas Field ( Oklahoma Shale ) is located in the Southeastern Oklahoma. To many oil and
gas companies, the Woodford Shale field holds a promising source of Natural Gas. This Natural Gas is trapped in the
shale rock thousands of feet below that ground. Companies first drill vertical wells, and then drill horizontally
with fracturing techniques which involves fracturing the shale rock deposits with high pressured water.
This then releases the trapped gas. The Woodford Shale find is the result of what has happened at the Barnett Shale find for the past 20 years. Companies have gained a vast amount of the experience drilling wells at Barnett and can
use this experience along with new technologies when they drill at the Woodford Shale Gas Field.
Over 1,500 wells
have already been drilled with many more to come. The sweet spots located in the Woodford Shale are McIntosh County
to Hughes, Coal, Pittsburg and Atoka counties. Companies are leasing land in order to explore for natural gas. In addition, these landholders often get up to 15% royalties on the Natural Gas found at Woodford Shale. Fresh news in 2009, Marathon Oil has announced they are drilling in Canadian County, OK.
Back to Horizontal Drilling. Many years ago companies
wouldn't be drilling this Woodford shale because of old technology's and the price of natural gas was low. Now
it makes economic sense. Although Horizontal wells at Woodford Shale cost alot more then vertical wells, soaring natural
gas prices have made these shale plays a gold mine. Its a huge frenzy similar to the gold rush. People are becoming
millionaires just for leasing their land to natural gas companies!
Geologists have know about woodford shale
for a long time but companies have only started exploring it ten years ago. Drilling only started several years ago.
This has boosted the average salary of the citizens from 26,000 to near 35,000-40,000 per year in McAlester. Some say
if you drive through Atoka, Coalgate, and McAlester, they are totally transformed. Great wealth is being created every
year.
- Devon Energy DVN - Also in the first quarter, Devon increased its lease position in the Cana-Woodford Shale to 180,000
net acres. The company added 16 new wells to production in the quarter, increasing average net production in the play to 73
million cubic feet of gas equivalent per day.
- Chesapeake Energy CHK- CHK sold their Arkoma Woodford
Shale assets to XTO and the British Petroleum for $2 billion or over $3 per share and at the time of the sale
less than 2% of our crude reserves were in the Arkoma, Woodford.
- Penn Virginia PVA- PVA announces that it has established a position in the Woodford Shale ( Caney ).
In the third quarter of 2008, we participated in three (0.5 net) non-operated horizontal Woodford
Shale wells in the Arkoma Basin, producing at initial rates of approximately 3.6, 4.6 and 2.7 MMcfe per day (working interests
of 11, 31 and 13 percent, respectively). Based on the encouraging results of the five Woodford Shale wells in which we have
participated to date, we plan to continue to participate in the drilling of additional wells in the near term in the Arkoma
Basin. Our internally generated Woodford Shale prospect in the Anadarko Basin will be tested during the fourth quarter of
2008. Update: One (1.0 net) Woodford Shale well is under evaluation and all of the remaining wells
were successfully drilled and completed. Production in the first quarter averaged 31.7 MMcfe per day, 98 percent higher than
the 16.1 MMcfe per day produced in the first quarter of 2008 and flat compared to the 31.8 MMcfe per day produced in the fourth
quarter of 2008.
- XTO Energy XTO - XTO Energy has exposure to Woodford/Caney Shale - 120,000 acres and counting. We currently have 5 rigs
in the Woodford shale. We have drilled some of
the best wells in this last quarter that we drilled since we've been in the play, two wells coming at 6 million a day that
were scattered across two different fields. And then we had our first well in the McAlister area in which we have a large
acreage position, came in at over 4 million a day. We think these kinds of wells are 4 to 5 Bcf wells. So there are areas
of the Woodford that don't pan out as well, we
believe our acreage is in the heart. And we will end up with better performance than lot of our peers.
- PetroQuest Energy PQ- PQ recently announced Woodford Shale Update. 1.1 TCFe proved,
probable and possible reserves as of 12/31/09 46,000 net acres 36 gross operated horizontal wells drilled
in the Woodford Shale - Typical horizontal well reserves – 4.6 Bcf - Completed well cost - $4.5MM - I.P. Rate
– 4 to 12 Mmcf/day
-
St Mary Land & Exploration SM - St. Mary recently completed drilling operations on the last well in a planned
simul-frac pilot. Four offset wells will be completed near an existing well in a 320 acre half section. This pilot and the
previously announced simul-frac pilot on 128-acre spacing are aimed at determining the optimal spacing for future development.
The Company expects to have the wells in the current pilot completed by the end of 2009.
- Quicksilver Resources KWK- Quicksilver KWK is exploring the Woodford and Barnett Shales: The company is beginning to test the Woodford formation out in our Delaware Basin project in West Texas. We will be drilling
several more wells in the next few months. Our plan is to commingle the Woodford with the overlying Barnett. The team will also evaluate additional formations up the hole. And we'll
talk about these results as we've said before, probably by year-end.
.
- Questar STR- Questar STR is active in the Woodford Shale Play. And
we're also pleased with early results in the emerging Anadarko Woodford shale play in Canadian and Blaine Counties in Western Oklahoma. With our revised capital program,
we plan to drill or participate in 20 Woodford
shale wells in '09.
- Cimarex Energy XEC - The hallmark of that asset is our Cana Woodford
Shale play here in Canadian County in Western Oklahoma. The insert shows where that sits for those of you who are unfamiliar
with it, we are sitting due west of Oklahoma City. In 2009 we drilled 46 gross and 20 net wells. We have 11 gross and 6.3
net wells waiting on completion at year-end. So we talked on previous calls we had a lull in our completions. We put a lot
of science behind studying optimum completion techniques. We made tremendous progress on that but we are still working our
way through that completion backlog. In 2010 we are expecting to drill 75 gross and 35 net wells in the Cana play. Our year-end
2009 proved reserves totaled 225 BCFE
- Marathon Oil MRO - Marathon holds approximately 30,000 net acres in the expanding Woodford Shale resource play with approximately 10,000 of
those net acres in the immediate Brickyard prospect area. The Company is currently drilling two additional company-operated
wells and is participating in two non-operated wells in the Brickyard prospect. Marathon also plans to participate in 15 to
25 gross wells in this area through 2010 with an anticipated 50 percent overall working interest.
- Newfield Exploration NFX - Woodford Shale - Production in April 2010 set a record of approximately 345 MMcfe/d gross operated (nearly
210 MMcfe/d net). The production growth is attributable to increased completions in early 2010 and the results of "super
extended laterals," or SXLs.
Newfield continues to focus its efforts on drilling SXLs, or wells with a horizontal
length greater than 5,000'. Newfield expects that its average Woodford lateral length in 2010 will be more than 6,000'. To
date, the Company has drilled 14 SXLs with an average lateral length of approximately 9,000,' with average gross initial production
(24-hour rate) of approximately 9 MMcfe/d. Three SXLs are in various stages of completion.
The Company is currently
running eight operated rigs in the Woodford. However, with the recent increase in capital allocated to oil projects, the operated
rig count is expected to be reduced to 4-5 rigs in the second half of 2010. Despite the reduction in planned development wells
and the re-allocation of capital to oil projects, Woodford production in 2010 is expected to increase approximately 20% in
2010 over 2009 levels (previous guidance, Feb. 2010, was 25% growth).
Continental Resources CLR - CLR is active in the Woodford Shale - the Anadarko Woodford shale of western Oklahoma, Continental is currently
completing two test wells, the Brown 1-2H (100% WI) in Dewey County. and the McCalla 1-11H (90% WI) in Grady County.
In Ellis County, OK, the Company completed its initial test well in the Atoka shale play, the Shrewder 1-22H (100%
WI), which flowed at 1.3 MMcfpd from a short, 1,300-foot lateral. The Jones-Trust 1-168H (100% WI), completed in Lipscomb
Co., TX in the western part of the play, flowed at 700 Mcf per day in its initial production period test.
2009 Latest Update: Production in the Arkoma Woodford shale play was 4,235 Boepd in the second quarter of 2009, which
was almost double that in the second quarter last year and which accounted for 11 percent of Continental's total production
in the most recent quarter. Arkoma production declined slightly in the second quarter compared with the first quarter of 2009,
reflecting reduced drilling activity since the beginning of the year in response to low commodity prices. The Company
participated in 14 gross wells (2.0 net) during the second quarter of 2009 and currently has one operated rig drilling in
the play in southeastern Oklahoma.
Evolution Petroleum EPM - EPM is active in the Woodford Shale - We began actively acquiring leases in these two projects in May
2007. At September 30, 2008, we had acquired approximately 18,000 net acres across the two projects. The northern
project targets the Woodford Shale at a depth of approximately 1500’ and has been offset by more than 50 wells drilled
to the Woodford by another operator. The southern project targets the Woodford Shale at depths from 4000’ to 5000’
and has been offset by at least one producing Woodford Shale well at an initial rate of approximately 1 MMCFD.
Unit Corp - UNT - Unit is active in the woodford shale but as natural gas prices continue to fall, they are not planning on drilling any
more wells in 2009. ( from seekingalpha ) - the Woodford
we drilled two horizontal wells out there that we have operated, the first well is online still, has been now for probably
four or five months. We just putting it on gas worth, we have not recovered all the load back at this point but the well is
making between 400 Mcf and 500 Mcf per day. When it stays unloaded, it will make as much as a million a day. So we are still
in the evaluating stage of that. The second well we drilled was a little bit deeper, horizontal Woodford well, we have one stage fraced [ph] here in the last two or three weeks and
we have two stages left to frac. So we will have something to report on that. And then for 2009, we are not planning to drill
any Woodford wells at this time.
Panhandle Oil & Gas PHX - During the most recent quarter, Panhandle participated with a 7.9% Net Revenue Interest (NRI) in a Southeastern Oklahoma
Woodford Shale well, which was producing 12,500 Mcf per day after being on sales for 15 days. As of April
30th, 2010 we have nine working interest wells drilling or completing in our three major shale plays, and there are
another 29 working interest wells, which we have approved to drill.
"We anticipate that the
first well in our Joiner City prospect in Southern Oklahoma will begin drilling this summer.
Panhandle will have an average NRI of 7% in this prospect, which will test a liquids-rich area of the Woodford Shale. If successful,
this test has the potential to add an additional shale resource play to the Company's portfolio.
"We
have also entered into an agreement to explore for and develop high potential oil prospects utilizing 36 square miles of modern,
high quality 3-D seismic in Oklahoma. The project utilizes existing 3-D seismic; therefore
the Company's cost of entry into the venture was very low. Panhandle will have a 50% interest in this project, and we
anticipate that our first well will spud during this fiscal year. This new area is an exploration prospect for Panhandle,
but, given the seismic data we have evaluated to date, we believe this project could develop into an exciting Mid-Continent
vertical oil play"
