by RTDukes on January 31, 2012
U.S. oil production has experienced a more than 30% decline over the past 50 years. Compared to natural gas that has blossomed since the dawn of the boom in the Barnett Shale, that’s a stark difference. The primary reason for the delay is oil is just beginning to bear the fruit of technology application.
From a geology perspective, there is simply more gas in the ground and companies were chasing the prize of trillions of cubic feet of gas (Quadrillions have been mentioned!). Right now, it looks as if history will show the new shale gas education applied to oil plays. The Bakken Shale is the most advanced and the plays’ production has risen from essentially zero to over 500,000 b/d today. The disclaimer is the Bakken had been targeted before the most recent horizontal drilling revolution, but it wasn’t what it is today. Not close.
Bentek, a energy research firm, believes West Texas and the Eagle Ford will have production grow to 2 mmbbls/d by 2016. That’s double what the whole state produced per day in 2005. With almost 2/3′s of U.S. rigs active in oil plays, West Texas and the Eagle Ford will not be alone in boosting the countries oil production.
Read more on the NBER study at fuelfix.com
by RTDukes on January 26, 2012
Apache announced it is acquiring Cordillera Energy Partners III (the third built and sold Cordillera success story) for $2.85 billion. The acreage position covers 254,000 net acres in the panhandles of North Texas and Western Oklahoma. When backing out production, the deal equates to an acreage price between $7,000-9,000/acre. Cordillera has 18,000 boe/d of net production in the area, with almost 72 mmboe of proved reserves.
Apache - Cordillera Granite Wash Map
The motivation for the deal wasn’t current production or proved reserves. It was the potential of multiple stacked pay zones. 3P (possible) reserves are estimated to reach as high as 300-400 mmboe from more than 14,000 potential drilling locations. 50% of the acreage is already held by production, which will be a manageable number for a company the size of Apache.
Drilling in the area targets multiple zones of the Granite Wash play, but Apache will also target the Cleveland, Tonkawa, and Marmaton formations. Stack pay zones mean the area is prospective for gas, as well as oil, condensate, and NGLs. Cordillera’s current production is more than 50% liquids.
Apache’s strategy has long been that of acquire and exploit. The company has supplemented its onshore acreage significantly in the past couple of years with acquisitions in West Texas from BP and now Cordillera acquisition in the Granite Wash.
