This may be a downtime for some areas, when it comes to exploration and production, due to the lingering low price of oil, but that is definitely not the case in the arching strip across Texas and Louisiana known as the Austin Chalk Trend. From the Pearsall Field in South Texas to Louisiana's Masters Creek Field, and everywhere in between, gas is the driving element behind a full spectrum of exploration, development, and production activities.
The Austin Chalk play is not new. There has been production of oil and gas in the Trend since the discovery of the Giddings and Pearsall Fields, two of the largest in Texas, in the 1930s. What is new is the development of geophysical and drilling technologies that make exploring and tapping the Trend's vast gas reservoirs possible, since it was a marginal play that relied heavily on higher oil prices from the discovery days of the 1930s through the 1970s.
Origins and dimensions (back to top)
The Austin Chalk Trend is a self-sourcing carbonate reservoir, where both oil and gas were formed from organic matter in the chalk itself. Approximately 30-miles wide and about 650-miles long, it is a very fine grain limestone, with very small pores and little or no matrix permeability, but it has excellent porosity and is naturally fractured, often extensively, with considerable faulting and formation dip changes, and it is in the areas of dense fractures that the Trend is most permeable and productive.
In prior decades, these sweet spots were drilled to drain the shallow oil, but frequently, because boreholes were vertical, they would miss the paralleling vertical fractures and result in dry holes. During the 1980s, however, horizontal drilling was introduced, and with it, measurement-while-drilling (MWD) and logging-while-drilling (LWD), systems that provided realtime data on the direction of the bit and the strata through which it was drilling. As a consequence, the success rate in encountering the productive, northeast-trending vertical fractures increased exponentially, and the Austin Chalk play became the world's primary location for horizontal drilling, with more than half the horizontal wells in the world.
The 1990s have seen the focus of the Trend shift from emphasis on oil to development and production of the associated gas reservoirs. But the boom beyond 2000 is likely to be in exploitation of the deep gas reservoirs in those sections of the Austin Chalk located downdip toward the Gulf of Mexico, which are just now being discovered by the major players in the Trend. Deeper and more costly to drill and develop, this area of the Chalk is, nevertheless, more apt to be more productive than shallower formations and is sweeter, with a higher Btu content.
There are many companies that are now successfully exploiting the hydrocarbons of the Austin Chalk, from small independents to major operators. One of the most active is Union Pacific Resources, one of the largest independent oil and gas companies in the USA, and the nation's leading driller. UPR operates throughout the Austin Chalk Trend, exploring for and producing both oil and gas as well as natural gas liquids in South and East Texas and in the Louisiana extension of the trend. "UPR is enjoying great success in the Austin Chalk," Jack L. Messman, UPR's Chairman and CEO, said. "With our technical expertise, UPR has been able to achieve year-over-year production and reserve growth for the past eight years."
Union Pacific Resources told Oil & Gas Online that it now holds more than 1.5 million acres of the Austin Chalk Trend in Texas and Louisiana. In 1998, some 97,000 boe/d were produced from the Trend, 37,000 b/d oil, 322 MMcf/d gas, and 5,700 b/d of natural gas liquids. During 1997, the company had 26 drilling rigs operating in the Chalk, in 1998, 15, and this year, because of the current downturn in oil prices, it will only have about 9 rigs working there-eight in Texas, 1 in Louisiana. This due to a 50% reduction in the company's E&P budget, 20% of which is earmarked for the Chalk play, effectively cutting drilling.
Louisiana expansion (back to top)
Over the past several years, UPR's exploratory drilling program has appreciably extended the Louisiana segment of the Trend, as well as significantly increased the company's production volumes from the area. Production of both oil and gas in 1997, in fact, was doubled in the Louisiana extension and is expected to have doubled again in 1998, when final figures are available.
Recent Louisiana wells have proven the prospectivity of the additional acreage. Four wells completed in late 1997, for example, have a gross production capacity of 12,569 b/d oil and 40.1 MMcf/d of natural gas. One, the Harmon #1 well, is located approximately 21 miles east of the nearest significant commercial Austin Chalk completion and approximately 75 miles east of the prolific Masters Creek area. The well, located in Point Coupee Parish, was completed on acreage jointly owned by UPR and BP Amoco. On a gross basis, the well had an initial production rate of 4,569 b/d oil and 8.1 MMcf/d of natural gas. Estimated reserves from this well are believed to be in excess of one and a half million barrels of oil equivalent.
UPR and BP Amoco jointly own or control over 100,000 acres surrounding the Harmon #1 well, and the companies believe that this well could set up as many as eight additional drilling locations. UPR owns a 69.5 percent working interest in the Harmon well, while Amoco owns a 22.8 percent working interest.
In addition to the Harmon well, UPR has three others in the Masters Creek area that were completed in 1997, the Crosby #12, the Crosby #36, and the Johnson #24. In the aggregate, they tested at gross rates in excess of 8,000 b/d oil and 32 MMcf/d. UPR's working interest in the wells ranges from 54% to 95%. The gas production from the Crosby wells and the Johnson well is being processed in the new Masters Creek Processing Plant operated by UPR. (The plant, which became operational in August 1997, can process up to 100 MMcf/d gas. Currently, the plant is recovering approximately 5,000 b/d natural gas liquids (NGL). It became fully operational in the second quarter of 1998, at which time the NGL recoveries were in the 12,000 b/d range.) "Since UPR controls in excess of 575,000 net acres in the Louisiana extension of the Austin Chalk," says Messman. "We expect to be the significant player in this area for the foreseeable future."
Digging deep in Texas (back to top)
In the Texas sector of the Austin Chalk, UPR has likewise continued to find success with its record-breaking exploration and production program, which reaches beyond the shallow Austin Chalk formation to deeper and frequently more prolific horizons in the deep Giddings Austin Chalk area.
In 1997, UPR drilled the largest horizontal gas well ever drilled onshore in the United States based on initial flow rates. The Eberle #1 well, 100%-owned by UPR, flowed 84.7 MMcf/d natural gas in a 24-hour period, eclipsing the previous horizontal record, also held by UPR, based on sustained production of the Neumann #1 well, which was drilled in August 1996 and produced at an initial rate of 50 MMcf/d. The Neumann well continues to produce 48 MMcf/d and had cumulative production in excess of 11 bcf in its first seven months.
The Eberle #1 was an offset to the Neumann #1 and the UPR Emma Bell #1, owned 100% and 90% respectively. The Emma Bell well is currently flowing at a rate of 42 MMcf/d with cumulative production of four and one half BCF in four months of production. Earlier this month, UPR commenced drilling the Neumann #2 and expects to have it completed in May.
Another significant 1997 discovery for UPR in the deep Washington area was the Schwickert #1 well, which tested at a rate of 16 MMcf/d from the Austin Chalk formation. A three-mile stepout from the nearest commercial Chalk production, it gave UPR the opportunity for development of the 18,000 net undeveloped acres it controls in the immediate area.
Last year, however, UPR broke the Eberle #1 well's record with the multilateral Eller #1 well in Austin County, which is now producing 18 MMcf/d from a TD of 15,400 ft. But the company's even larger well, the Glaeser #1, completed in August 1998, has even exceeded that well's production, with total output to date of 7 bcf natural gas from annual production of 60 MMcf/d.
Of the more significant horizontal wells utilizing multilateral completions that were recently brought into production, the Bluebell Unit Well No. 2, located in Washington County, Texas, was drilled to 14,894 ft and originally completed in 1996 as a triple lateral with dual opposing laterals in the Georgetown formation and one lateral in the more shallow Austin Chalk formation. Recently recompleted, it is now producing from the Austin Chalk and Georgetown formations at a combined flowrate of 39 MMcf/d of for cumulative production of 2.7 bcf natural gas.
Another deep Washington County well, the 90%-owned Emma Bell No.1, was completed as a single lateral horizontal well and is now producing 40 MMcf/d of natural gas. The well was drilled to 14,642 ft and is a direct offset to UPR's prolific Neumann Unit #1, which has produced 5.8 billion cubic feet of natural gas since the well began producing in August 1996, and is currently producing 56 MMcf/d.
Including the Eberle #1, UPR is currently producing 239 MMcf/d of net gas production from 20 operated wells in Washington County, Texas. Latest figures indicate that UPR has drilled 295 horizontal wells deeper than 10,000 ft, more than twice the number of the next most active driller.
Union Pacific Resources has invested over US$2 billion in drilling over 1,500 wells and constructing the numerous plants and pipelines it operates in the Austin Chalk play. This year will not likely achieve the records UPR has chalked up over the past ten years, but there is an upside: cashflow from the area has surpassed the company's investment, and there still remains proved reserves yet to be produced of some 724 bcfe.
"These recent discoveries are world class wells and show the horizontal drilling expertise of UPR in the deep Giddings, Austin Chalk area," said Jack L. Messman, UPR's chairman and CEO. "By any method of measurement, UPR is the #1 driller of deep, horizontal, high deliverability gas wells in the Austin Chalk and we fully expect to maintain that distinction in the years ahead."
By Dev George