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SIPES-HOUSTON CHAPTER NEWSLETTER
SEPTEMBER 2015
September Luncheon
$50/BO Not Sustainable
Prospect For Sale
UBS N. American Energy Report
The Saudis Gambled, Texas Won
End The U.S. Export Ban
SIPES CES 2015
Assessing The Eagle Ford
SIPES-Houston Newsletter | Sept 2015
SIPES HOUSTON CHAPTER 5535 Memorial Drive Suite F 654 Houston, Texas 77007 Tel: 713-651-1639 Fax: 713-951-9659 www.sipeshouston.org email: [email protected]
Chapter Officers 2015
Chapter Chair Jay Moffitt (713) -750-9485 x 104 [email protected]
Chair Elect James Mertz (281) 205-8140 [email protected]
Past Chair Jory Pacht (832) 338-5928 [email protected]
Secretary Russell Hamman (713) 526-7417 [email protected]
Treasurer William Smith (713) 650-3060 [email protected]
Website Chair James Allen (713) 871-2350 [email protected]
Technical Program Chair Grant Fergeson (832) 613-4009 [email protected]
Continuing Education Chair Kenneth Mallon (713) 705-7955 [email protected]
Hospitality Chair Chris Atherton
Public Relations Chair Jeff Lund (713) 275-1664 [email protected]
Membership Chair(s) Chip Betz (713) 658-8096 x 17 [email protected] Patrick McCarthy (713) 650-0311 [email protected]
Newsletter Chair Jeff Allen (713) 871-2350 [email protected]
Deal Buyers List Chair Hans Sheline (281) 241-7271 [email protected]
Political Affairs Chair Ross Davis (713) 658-3131 [email protected]
Sponsor Coordinator Christine Milliner (562) 881-6326
National Directors Ralph Daigle (National Pres-ident) (281) 292-6859 [email protected] Mike Jones (713) 654-0080 [email protected] Jeff Lund (713) 275-1664 [email protected]
Office Manager B. K. Buongiorno (713) 651-1639 [email protected]
In This Issue Letter From The Editor 1 Jeff Allen
September Luncheon 2 Eric Potter
$50/BO Is Not Sustainable 3 Rystad Energy
Shale Production is not Growing 3 Rystad Energy
Prospect for Sale 4 Mike Jones
US Shale Plays Map 5
UBS N. American Energy Report 6&7
Saudis Gambled, Texas Won 8 Glen Hegar
News From The Board 10 Russell Hamman
Pop Quiz 11 Jeff Allen
New Members 12 Chip Betz
End US Export Ban 12
CES 2015 13
Assessing the Eagle Ford 14
R.I.P. Steve Murray 15
On the cover: In Eastern Russian, the Pugachevskiy mud volcano erupted creating an eye looking shape. This volcano releases mud, not lava. Photo taken by Mikhail Mikhailov.
Want to be on the cover? Email Jeff Allen, the editor, at [email protected]
1 SIPES-Houston Newsletter | Sept 2015
SIPES is the premier society for independent buyers, sellers, and con-
sultants. Within this society are many seasoned veterans of the inde-
pendent industry. Wouldn’t you want to meet as many as you could
and get your prospects in front of as many as possible? That is exactly
what the newsletter wants to do for you. If you are a SIPES member and
have a prospect to sell please contact me at
[email protected] to have your prospect highlighted just
like on page four of this months newsletter. Similarly, if you are a buyer
and would like to be highlighted in the Newsletter please provide a
short bio of your company, who to contact, and what specific criteria
you look for in prospects. Let the newsletter work for you.
If anyone would like to pick up the AAPG Bulletin volumes from 1941-
1985 please contact Jeff Allen. The bulletins are bound in green hard-
back books separated by volumes. These were owned by Charles E.
Trowbridge. This is free, you must pick them up.
IMPORTANT: the Petroleum Club has a new rule concerning food – if
you don’t specify your special-needs meal before the luncheon you will
be charged an extra $20. We don’t want anyone to be charged extra so
please take the time to contact BK for your special meal needs well
ahead of time.
Jeff Allen
L E T T E R F R O M T H E E D I T O R
*The meeting will be at the new Petroleum Club, 1201 Louisiana Street, on the top floor.
Abstract
Energy research continues to be the mainstay
of the Bureau’s efforts, with 66 full-time re-
searchers currently dedicated to oil and gas
topics and one person working on geothermal
energy in Texas. Our funding comes from indus-
try, state and federal governments, the Jackson
School of Geosciences, and foundations. Indus-
try-funded research consortia are thriving and
include dedicated groups for nano-sensors in
the subsurface; salt tectonics; natural fractures;
mudrock, carbonate and sandstone reservoirs;
deep sandstone reservoir quality; multicompo-
nent seismic; computational seismology, and
energy economics.
The state-funded State of Texas Advanced Re-
source Recovery (STARR) program continues to
work directly with operators to assist them in
reducing risk and enhancing hydrocarbon re-
covery. The Jackson School has recently invest-
ed heavily in upgrading our laboratories, pri-
marily because of the need for a new genera-
tion of instruments for modern mudrocks re-
search.
The Bureau just completed a large multiyear
project assessing resources in the top four U.S.
shale gas plays, and has created a complex
model for 30-year production-rate scenarios
using various price and technology assump-
tions.
A similar project is underway on the Eagle Ford
and Bakken shale oil plays. Anticipating the
“Great Crew Change”, we have made a number
of significant junior-level hires to ensure the
Bureau’s success in the coming decades.
We collaborate extensively with the Environ-
mental Division at the Bureau in the areas of
carbon sequestration, aquifer characterization,
impacts of shale development, and earthquake
monitoring. We’ll look at some examples of the
research listed above, covering as much ground
as we can in the time available.
Biography Mr. Eric Potter is a geologist, and Program Di-
rector for Energy Research at the Bureau of
Economic Geology at UT. Since 2001 he has
been responsible for coordinating the oil and
gas energy research programs at the Bureau,
where he directs a staff of 65 researchers. From
1975 to 2000, he was with Marathon Oil Compa-
ny, engaged in oil and gas exploration across
much of the U.S. He was Associate Director of
Marathon’s Petroleum Technology Center in
Littleton, Colorado in the early 1990s. He earned
a bachelor’s degree in Earth Sciences at Dart-
mouth College in 1972, and a master’s degree in
geology at Oregon State University in 1975. He
is a registered professional geoscientist in the
state of Texas. In his spare time, he is the chief
of trail-maintenance volunteers at Great Hills
Park in Northwest Austin.
ONGOING ENERGY RESERARCH AT THE BUREAU OF ECONOMIC GEOLOGY ERIC POTTER
S E P T E M B E R S I P E S L U N C H E O N
Date: Thursday, Sept 17th
Place: Petroleum Club
1201 Louisiana St.
Time: Social 11:15
Luncheon registration deadline
is Noon, Tuesday Sept 15th
$30 for Members and Affiliates
$35 for guests and non-
members
Additional $5 for walk-ups
No-shows will be billed.
Call, fax, or e-mail your reserva-
tion to the SIPES-Houston Office.
You can sign up online at
www.sipeshouston.org, but
payment is still required at the
luncheon or by mail.
2 SIPES-Houston Newsletter | Sept 2015
$50/BO IS NOT SUSTAINABLE BEYOND 2016 U.S. SHALE PRODUCTION IS NOT GROWING
3 SIPES-Houston Newsletter | Sept 2015
Due to a lack of growth in North American shale production and increased decline in mature fields, a Brent price as low as 50 USD/bbl is not sustainable beyond 2016, shows recent oil market re-search undertaken by Rystad Energy.
Around ten thousand shale wells would need to be drilled each year in order to keep North American shale production flat. As-suming balanced cash flows, costs would need to be decreased by 20% in 2015 vs 2014 at a price of 50 USD/bbl to drill those wells according to conducted well-by-well breakeven modelling. While 70 USD/bbl is likely too high an average price for 2016, it is too low an average price beyond 2017 as the additional effect of non-sanctioning of projects reduces the global supply potential longer term.
“Our current market view is neutral to bearish in the short-term as we see a production floor at 30 USD/bbl. At such a low price, the supply response in US shale production coupled with already visi-ble drops in infill drilling in the Gulf of Mexico and North Sea will be so severe that the price cannot remain that low for long,” says Nadia Martin, Senior Analyst at Rystad Energy. Although the oil market is currently well-supplied and oil stocks remain high, Rystad Energy remains bullish in the longer term, with foreseeable price spikes for Brent already in 2016. The current futures curve is trading too low for marginal producers to hedge their future pro-duction.
North American shale production has stopped growing, as a result of lower activity. Preliminary capital budgets for the year indicated total shale expenditure of ~100 BUSD, down from ~155 BUSD in 2014. As of the second quarter, several major companies have further reduced their capital budget, including the top three producers: Chesapeake, Devon, and EOG. Consid-ering the budget revisions as well as short term cost reductions, the current estimate of 2015 expenditure is now ~$95 BUSD. The decline in the expected capital expenditure for the year also impacts the 2015 production outlook. Figure 1 shows the updat-ed month-by-month US light oil production and forecast first shown in the May edition. The forecast is split by the life cycle of the well. Drilled, not yet producing represents the production from wells drilled but not completed. Not yet drilled consists of the production coming from wells expected to be drilled based on company reported activity. Compared to Q1 2015 the main difference is the timing of the slowdown in pro-duction. The backlog of completed wells has grown faster than predicted, especially for the Permian plays, therefore the slow-
down took place in June/July, rather than late summer. Predicting the 2015 production and spending level is difficult, as we still need to see how companies will react to the lower unit prices. Will operators continue to cut total spending, such as EOG, Devon and Chesapeake, or will they increase spending such as Bill Barrett and Pioneer have reported?
Click on the image to see the full article
Click on the image to see the full article
P R O S P E C T F O R S A L E
4 SIPES-Houston Newsletter | Sept 2015
SCOUT PETROLEUM, LLC 2509 CR 318
YOAKUM, TEXAS 77995 (361) 772-8589
_____________________________________________________________________________
CAPTAIN LUCEY PROSPECT JIM WELLS COUNTY, TEXAS
LOCATION: 8 miles NE of Alice in Jim Wells Co., TX.
OBJECTIVES: Five Frio sands. (4 Oil +1 Gas)
WELL DEPTH: 5800'
PROSPECT RESERVES: 234 MBO + 450 MMCFG
LAND: 320.0 Acres, 75.0% NRI, exp. 12-13-2015
OPERATOR: Harper Hefte Inc.
GEOLOGIC SUMMARY: This normal pressured development well is designed to establish production in four new oil sands and one new gas
sand which have been missed in the previous development of Captain Lucey Field. Every sand on the Captain Lucey
Field downside rollover structure between the depths of 3200’ to 5800’ accumulates oil and or gas at each respective
sand’s optimal trapping position. This test well is expected to be on the structural axis of the Field and to be at the
optimal trapping position of all five objective reservoirs which have not yet been exploited. All five objective reser-
voirs are stratigraphic in nature, consisting of east-west trending sands draped across the north-south trending struc-
tural axis of the Captain Lucey Field structure. All five objective reservoirs have oil and gas shows associated with
them and all five are expected to be at original reservoir pressure. Frio oil completions in this area are completed
naturally and commonly have Initial Potential test rates of 50-90 BOPD flowing.
TRADE TERMS: (to the 100%)
Leasehold and Geology $100K, DHC $283K (cost), COMP. $200K (cost).
Deliver 75% NRI, no Back-In or Carry. (i.e. 1% WI = $3,830 Dry Hole or $5,830 Completed)
CONTACT: Mike Jones, Geologist 713-398-3091 [email protected]
Thomas Jones, Geologist (361) 772-8589 [email protected]
THIS OFFERING IS SUBJECT TO PRIOR SALE, WITHDRAWAL OR CHANGE WITHOUT NOTICE
AS OF SEPTEMBER 1, 2015: 45% WORKING INTEREST IS AVAILABLE
Are you a member of SIPES? Do you have a prospect to sell? If so, please talk to Jeff Allen, the newsletter editor, to in-quire about being published in the newsletter on this page.
5 SIPES-Houston Newsletter | Sept 2015
U.S. SHALE PLAYS
6 SIPES-Houston Newsletter | Sept 2015
UBS NORTH AMERICAN ENERGY INDEPENDENCE REPORT AUG 2015 The UBS report on North American Energy Independence was released in August 2015. Below are some highlights of the report. The data is from the EIA and the report is put together by Nicole Decker of UBS.
PHASE ONE
Seasonally weaker demand because of moderation in winter and refinery mainte-nance season.
No evidence of a supply response yet.
Production continues to rise.
Oil inventories build at a rapid pace.
Downward pressure on oil prices.
PHASE TWO
Demand picks up in 2H 2015.
Seasonal Demand.
Demand stimulus from lower prices.
Supply response begins.
Prices will stabilize and then begin to rise.
7 SIPES-Houston Newsletter | Sept 2015
UBS NORTH AMERICAN ENERGY INDEPENDENCE REPORT AUG 2015
INVESTMENT CONCLUSIONS
Oil prices still vulnerable to downside, but recovery a matter of WHEN, not IF.
Buy energy equities prior to the onset of the fundamental recovery phase.
Focus on high-quality E&P and oil services names.
Natural gas opportunities will come.
SIPESHOUSTON.ORG If you are not yet registered as a member on the site please do so
ASAP.
You can now pay your national and local dues online. If you have not paid them please do so ASAP.
For events and announcements please visit the website.
Attendance confirmation and payment for luncheons can be done
through the website.
Many growing pains with the website have now been resolved and will continue to be fixed.
Any questions or issues with the website can be directed to [email protected]
8 SIPES-Houston Newsletter | Sept 2015
9 SIPES-Houston Newsletter | Sept 2015
THE SAUDIS GAMBLED AND TEXAS WON In November 2014, the lead-ers of Saudi Arabia made one of the biggest bets in history. Their strategy was flawed, and they’ve already lost.
In an OPEC meeting that month, Saudi Arabia an-nounced it would maintain high oil-production levels de-spite falling prices. The Saudis were betting that by keeping prices low they could protect their market share and kill
America’s energy renaissance—a rebirth driven largely by Texas, which produces 37% of America’s oil and 28% of its marketed natu-ral gas. The Saudi strategy seemed to make sense. The conventional wisdom was that energy producers working in “tight” shale formations would be squeezed by low prices, since their extraction methods—hydraulic fracturing and horizontal drilling—are more expensive than conventional drilling. So, surely, once that happened Texas would be in serious trouble.
Columnists at the New York Times and elsewhere said the “Texas miracle” was fading, or even dead . . . and some of them seemed happy about it.
But an interesting thing happened on the way to the collapse of the Texas economy—it didn’t collapse. First, many people still don’t seem to realize how diversified the state economy has become. In 1981 oil and gas production and its support services accounted for nearly 20% of Texas’ gross state product. To-day, after years of incredible growth in the industry, it contributes less than 14%.
Dallas and Austin are booming today, but not because of oil and gas. Even in the 1990s when oil spent much of the decade at less than $30 a barrel, the state economy grew steadily.
And despite the slump in energy prices, oil and gas production in Texas and the U.S. has continued to rise. In fiscal 2015 oil prices were lower than my office had predicted, but revenues from Texas’ oil-production tax came in higher than expected, at nearly $2.9 billion. What the Saudis and the naysayers closer to home seem to have forgotten is that the free market is the greatest incubator of techno-logical innovation. Energy producers in this country have gauged the challenges of lower prices, are working to tackle them, and it’s pay-ing off. The technology behind shale production is advancing rapidly, and its costs are falling. Today the industry can tap multiple separate oil pools from a single vertical hole, drilling horizontally through miles of rock with computer-guided, steerable drill bits. Some of these “octopus” wells can feature as many as 18 horizontal shafts.
Articles about falling rig counts don’t take this into account. We’re seeing additional innovations such as the use of re-cycled “fracking” water, carbon dioxide and other substanc-es to break formations, reducing the use of precious fresh water in drilling.
But if history is any guide, oil and gas prices won’t remain low forever. And the technology, the talent and the infra-structure associated with America’s energy renaissance aren’t going away. They’re new facts in the global land-scape. When prices rise, American capital will flow back to the oil patch and production will ramp up again.
OPEC’s gamble to kill American innovation was a short-term strategy without an endgame, and no appreciation of how the strategy would spur greater efficiencies and inno-vation in the U.S. Call this a gentle reminder: It is never wise to bet against capitalism, especially in Texas.
An extended period of below-$40 prices—if that’s what’s ahead—will have an effect on the industry and many fami-lies will have to endure consolidation and layoffs. Weaker and overleveraged players will go out of business. The oil industry as we knew it before prices dropped may never be the same. Article by Mr. Glenn Hegar of The Wall Street Journal.
N E W S F R O M T H E B O A R D R u s s e l l H a m m a n B u d g e t s D e c l i n e i n 2 0 1 6 ?
10 SIPES-Houston Newsletter | Sept 2015
Obviously there is no luncheon speaker review this month since we did not have an August luncheon. I’ll be brief in describing the high points of the Board of Directors meeting. Our principal focus was the upcoming Continuing Education Seminar sched-uled for September 25
th. This years’ topic is “Old Field Revitaliza-
tion.” The technical program is complete with 11 speakers sched-uled. One of those speakers is an ethics talk that will count to-wards maintaining your certification as a geoscientist. Given the present mood in the industry, fundraising has been difficult to say the least. As a result, we are counting on attend-ance to make the seminar a success. At meeting time, registra-tion was low but hopefully now that summer travel is waning and the fall activities come into focus, you have had a chance to reg-ister. There is more CES information elsewhere in this newsletter. Our annual Independent’s Day Celebration took place on August 6
th. We all enjoyed the food and camaraderie and some lucky
winners walked away with great door prizes. There were 146 in attendance this year including over 30 potential new members. There are also a host of other people somewhere in the applica-tion process. Please help out our Membership Chairmen by helping to sponsor any applicants you can. There will be another update to the website in the coming weeks.
You can now register and pay for everything online. The online
payment is a great way to skip the line and go straight to net-
working at the luncheons. Another looming update is the mod-
ernization of the deal buyers and sellers list. When completed
shortly, these resources will be centralized repositories of inter-
ested parties for potential transactions. Please stay tuned for
more updates.
Experts on oil and natural
gas at the Pipeline and
Energy Expo in Tulsa said
they think production
budgets will decrease
again in 2016. A professor
at Oklahoma State univer-
sity thinks prices may not
rebound until 2017.
"We've been thinking for
three or four months that
2016 budgets would be
smaller than 2015. Now
we think they will be even
smaller," said Skip York,
vice president of integrat-
ed energy at Wood Mac-
kenzie. "Companies start-
ed planning for 2016 in
June when we were in a
$60 world that people thought might be $70 or $75 (by the end
of the year). In October, they have to finalize their plans, but now
we're in a $40 world. That will mean an even steeper cut."
"We've been thinking for three or four months that 2016 budgets
would be smaller than 2015. Now we think they will be even
smaller," said Skip York, vice president of integrated energy at
Wood Mackenzie. "Companies started planning for 2016 in June
when we were in a $60 world that people thought might be $70
or $75 (by the end of the year). In October, they have to finalize
their plans, but now we're in a $40 world. That will mean an even
steeper cut."
Oklahoma State University professor Betty Simkins said compa-nies in the industry should have been better prepared, noting that the price drop over the past year has been the 13th time since 1983 that oil prices have fallen by more than 40 percent. Too much debt. “That’s roughly once every four years,” said Sim-kins, Williams Cos. Chair of Business and a finance professor at OSU. “A lot of companies in Oklahoma have too much debt on their balance sheets, knowing the nature of the industry. Then they get into financial distress and possibly file Chapter 11. It (the price downturn) shouldn’t have been a surprise.”
“I’m thinking it will be 2017 before prices recover,” she said. “A lot of the price is driven by OPEC, and their economies can only stand it (low prices) for so long. After two years, I think they will not want to destabilize their own treasury.” York agreed that the Organization of Petroleum Exporting Countries eventually will allow oil prices to strengthen, but only after production declines in the United States and other non-OPEC countries. “OPEC has a vested interest in letting that happen,” York said. “None of the OPEC countries can survive forever on $50 oil.”
Article by Adam Wilmoth; click on the image for the full article.
11 SIPES-Houston Newsletter | Sept 2015
P O P Q U I Z !
Both questions must be answered correctly. The Henry Hub in Erath, LA, is the interconnect for how many interstate and intrastate pipelines that provide access to major markets throughout the country? True or False: Henry Hub is used as the pricing point for natural gas futures trading on the New York Mercantile Exchange.
Send answers to the Newsletter Editor,
Last Months Answer: Petroquest found two fields, Thunder Bayou and La Cantera. Both fields produce from the lower Chris R Sands. The gross thickness of the reservoir in La Cantera field is 500 feet. The EUR of La Cantera field is 200 BCF and Thunder Bayou is 150 BCF.
12 SIPES-Houston Newsletter | Sept 2015
NEW MEMBERS END THE U.S. EXPORT BAN David (Dave) Stevens is a Geologist and
founding partner of Blackrock/Bluerock Energy
Capital. He is originally from Lafayette but
now lives in The Woodlands. Previously, he
was at Tenneco Gas and Tenneco Ventures
and then Domain Energy and Range Re-
sources. He is on the Board of Directors of the
LOGA (Louisiana Oil &Gas Association).
Ronald (Ron) Crockett has a degree in Geology from the University of Texas and has formerly worked at Goldking/Dune Energy, Domain Ener-gy/Range Resources, Pennzoil, Pogo, C&K, and Pelto. He has worked as both a Geologist and Geophysicist mainly in the Gulf of Mexico and Gulf Coast but has also worked in the Rockies, West Texas, Arkansas and Nigeria.
Cheryl Desforges is an Independent Geologist originally From New Orleans who has worked with Randall & Dewey, Sabco Oil and Gas and Eagle Hy-drocarbons to name a few. She has worked on many committees and offices within HGS and AAPG including vice president of HGS(2015-16), AAPG Governmental Affairs Com-mittee, and AAPG House of Delegates (2007-15). She has received many honors and awards including the HGS distinguished ser-vice award in 2008. Cheryl has worked in exploration and exploitation but also SEC reserve preparation, and acquisition evalua-tions in many areas including onshore and
offshore Texas and Louisiana and the Mid-Continent area. Richard (Rick) Nagy was born in New Jersey but obtained his
B.S. in Geology from San Diego State Uni-versity and then began his career with Fina Oil and Gas working exploration in Alaska and offshore California. Later he worked with Phillips Petroleum, Devon Energy, and Noble Energy in mainly the Gulf of Mexico but also the Eastern Mediterranean and West Africa Offshore. He has recently re-tired and now an independent Geologist active with AAPG and DPA.
The Houston Chapter of SIPES is one of the largest with 364
members. It is important that each member pays his dues to
maintain his membership if you have not yet done so. The
deadline for paying dues without a late fee is July 1st, 2015.
Congress will vote soon on whether American oil producers
get the same deal as Iranians. Is it really fair for Iran to be
able to export oil but the U.S. can’t?
Tell your members of Congress to lift the sanctions on U.S.
oil!
The United States is the only advanced nation in the world
that prohibits crude exports. Under the new deal with Iran,
even it is able to join the global market. But the U.S. oil ex-
port ban remains in place. This relic of the 1970s is holding
our economy back. It’s preventing jobs from being created.
It’s keeping prices higher for consumers. It’s hurting America.
Congress can fix these problems and end the export ban. Let
your member of Congress know that you want the U.S. to
end this outdated law and join the world energy market.
There is no reason that Iran should get a better deal than
America. Sincerely,
The Energy Citizens Team
13 SIPES-Houston Newsletter | Sept 2015
SIPES CONTINUED EDUCATION SEMINAR, SEPT 25TH
1. Leta Smith (IHS): Resource Potential in Mature Fields
2. Jeffrey Bayless (NUTECH): Identifying By-Passed Pay and New Reservoirs Using Rock Texture Petro-
physics Integrated with 3D Geologic Modeling
3. Ken Hooper (LaMesa Geophysical): Focused 3-D Surveys for Established Oil Fields
4. Mike Geffert (Greystone Oil & Gas LLP): The Revitalization of Sligo Field, Bossier Parish, Louisiana
5. Jory Pacht (Pintail Oil & Gas): Rejuvenating Keeran Field
6. Jeff Swanson & Ben Bahorish (Durango Resources): Simulation – Giving Life to a Marginal Field
7. Bob Shoup (Subsurface Consultants & Assoc): Nail Guns Do Not Build Houses, Carpenters Do (New
Reserves from Application of Best practices)
8. Rick Valdes (Texas Board of Professional Engineers): Professional Practice Update/Ethics 9. George E. King, PE (Distinguished Engineer Advisor, Apache Corp) Things to do BEORE you frac
that old well. 10. Michael R. Berry, PE (Mike Berry Consulting, LLC): Artificial L ift Systems 11. David Wilson (CEO, Unitex): Increasing Production & Lowering LOE: Case Study of the Sharon
Ridge Field, Scurry County, TX
14 SIPES-Houston Newsletter | July 2015
ASSESSING THE EAGLE FORD, DRILLINGINFO The Eagle Ford is located in South-Central Texas extending from the Maverick Basin, through the Central Texas Platform, across the San Marcos Arch and ending in the East Texas Basin. Overall the Eagle Ford is about 50 miles wide and over 400 miles long extend-ing beneath 15 counties. The Eagle Ford continues to be one of the top plays despite low oil prices. The image below shows the current rigs and permit activity in the last 30 days. The highest area of inter-est is in the eastern section of the play.
The active rig count of 96 (8/27/15) in the Eagle Ford places it in second amongst the most popular shale plays in the US. Here is a typical production curve in the Eagle Ford.
Keeping this production curve in mind we can take a look at the total production from the Eagle Ford. Interestingly March through May 2015 is the only consecutive monthly decline in production. During this period production fell from 77,690 MBOE 6:1 to 71,116 MBOE 6:1. Each year the production increases compensate for the declines from older wells, however, production in 2015 appears to be insufficient to continue the production increases. We’ll be watch-ing next months production figures (and updates to previous months) closely.
The Eagle Ford formed in the Late Cretaceous from 82 to 97 mil-lion years ago. At this time there was a marine transgression, a point in time where the sea level rises relative to land. The trans-gression led to the formation of the Western Interior Seaway, a shallow ocean which extended from the Arctic Ocean to the Gulf of Mexico. The earth overall was much warmer during the creta-ceous than it is today, causing the temperatures between the poles and the equator to be mild, resulting in a decrease in ocean-ic currents. As ocean currents slowed and stagnated areas of anox-ic zones formed creating a favorable environment for organic shales to be deposited. The Eagle Ford formed in the southern portion of the Western Interior Seaway.
The geologic units thin moving from the Maverick Basin (west) to the San Marcos Arch (east). The large cross section beneath is flat-tened on the Buda Limestone. This cross section shows the relative thickness of the other units. The Lower Eagle Ford appears brown and changes in thickness going from west to east.
SIPES Houston Chapter, 5535 Memorial Drive, Suite F654, Houston, Texas 77007 Tel: 713-651-1639 Fax: 713-951-9659 www.sipeshouston.org e-mail: [email protected]
Upcoming SIPES Events
Sept 17th: Luncheon, Eric Potter, Petroleum Club
Science-Based Events in Houston Museum of Natural Science Lectures Sept 15th: Lecture, The Write Stuff, How Writing Began
Visit HGS.org for other events
Sept 14th: World Oil Supply in Transition, Richard Bishop, Westchase Hilton, 9999 Westheimer, 6:30pm
* * *
KEWANEE — Two Texas residents were killed when a small plane crashed Sunday morning in rural Kewanee.
Emergency crews were dispatched to the scene shortly after 9:30 a.m. when a local resident reported the accident.
Pronounced dead at the scene at 12:45 p.m. Sunday by Henry County Coroner Da-vid Johnson were Steven Murray, 67, and his son Mark Murray, 38, both of Houston, Texas.
A third victim, Samantha Murray, 40, was transported by ambulance to Kewanee’s OSF St. Luke Medical Center and then air-lifted to a Peoria hospital. Johnson said Samantha Murray, also of Houston, sus-
tained injuries to an arm.
The plane’s wreckage was in a soybean field two miles west of Kewanee Municipal Airport on 400N.
Johnson said the three victims had been in this area for a family gathering over the weekend and were returning home. The plane had taken off from Kewanee Municipal Airport before the crash. Illinois State Police Officer Steve Icenogle said a nearby farmer heard the crash and saw a cloud of smoke. He found the downed plane and called authorities.
Responding were the Henry County Sheriff’s Office, Illinois State Police, Bishop Hill and Galva fire depart-ments, Illinois Emergency Management Agency and the Stark County Ambulance Service.
Federal Aviation Administration officials from Chicago were expected to arrive later in the afternoon to assist with the investigation. Representatives of the National Transportation Safety Board in Colorado were due to arrive late Sunday night. Emergency personnel remained at the scene throughout the day and closed the area off to local traffic.
Steve Murray R.I.P.
