Title: Gas Drilling Dominates Rockies Activity in 2000 and 2001; Majors Return to Stake Claims in Rockies Gas Hunt
Authors: Mark Caldwell and Jim Mullarkey
Publication: The Outcrop, January 2002, p. 1, 6-8
In spite of dramatic world turmoil and extreme price volatility, exploration and development geologists working the Rocky Mountains in 2001 contributed greatly to the emergence of the region as “The Persian Gulf of Gas.” While conventional Rockies gas plays continue to be the exploration focus of many geologists, unconventional plays including coal bed methane (CBM), shale gas, and basin-center gas accumulations (BCGA) continue to receive significant exploration emphasis. The return of major oil companies, including Phillips and Shell, to Rockies gas exploration is a clear indication that “big money” believes in the enormous gas potential of the region. Alberta Energy Co., the largest gas producer in Canada, purchased McMurry’s interest in Jonah Field and appears poised to aggressively ramp up exploration in the Rockies. Other large mergers and acquisitions in 2000 and 2001 will directly impact the future course of Rockies exploration.
Review of IHS Energy data for wells that had initial production after January I, 2000, and had cumulative production greater than 200 MMCF gas through mid-2001, show some informative trends. The total production from the 434 wells that meet these criteria is 211.2 BCFG, 2.0 MMBO, and 11.3 MMBW. TWenty five percent of this gas production, 52.6 BCE, came from 81 wells producing from the Lance Formation in the Greater Green River Basin. The locations of these 434 wells are shown on the accompanying map (Fig. 1; page 7).
To look for significant oil wells, the IHS data for the 102 entities that had initial production after January 1, 2000, and had cumulative production greater than 33.5 MBO (200 MIMCF gas on a 6:1 equivalence basis), were examined. The total production from 98 of these wells is 17.8 BCFG, 6.6 MMBO, and 17.7 MMBW, through mid-2001 (a total of 57.4 BCFGE for these 98 wells compared to the 223.2 BCFGE produced by the 434 “gas wells”). Activity is summarized by state below.
Wyoming–Development drilling continued successfully at Jonah Field and in the near vicinity for the Cretaceous Lance Formation. The Wyoming Oil and Gas Conservation Commission has approved 40-acre drilling and spacing units in some cases. The production statistics cited above show how dominant this play has become in the Rocky Mountain region. Per well reserves in Jonah Field range from less than 2 BCF to over 15 BCF.
Gas production on the Pinedale Anticline northwest of Jonah Field is being expanded by operators Questar, Ultra Petroleum, and Anschutz Exploration Company on the northern portion of the structure and by McMurry Energy (now Shell), Alberta Energy Company (some as a non-operator), Ultra, BP/Amoco, and Yates on the southern portion. Questar drilled and completed 5 new producers on the Pinedale Anticline in 1999 with post-stimulation flow rates of 7.5 to 10 MMCFD. Questar estimates reserve potential of 5 to 6 BCFG/well with the potential for up to 150 new wells to be drilled on the anticline based on 80-acre spacing. Where fracturing, apparently due to cross faulting, enhances production, per well reserves can be more than 10 BCF, up to 20 BCF in at least one case.
Combined production from the Jonah-Pinedale area is about 339 MMCFD, from 311 wells, and is forecast to exceed 500 MMCFD by the end of 2001 as new wells are brought on line. Jonah itself is producing 333 MMCFD from 289 wells.
Drilling for Lewis gas in deepwater turbidite reservoirs expanded in 2001 with new discoveries in the eastern Green River Basin. Westport Oil and Gas completed a new Lewis producer in the Triton Unit of the western Washakie Basin of Wyoming, reported to have tested at rates of up to 3 MMCFD commingled from three perforated intervals. This well reported an IP of 1.3 MMCFD. About 25 miles west of the Westport well, Yates was drilling a wildcat in the third quarter of 2001, and was reportedly flaring gas at the Wrangler Federal well in section 19, T14N, R98W, which is slated as a 14,500′ Jurrassic Nugget test. In the same area, Stone Energy, L.L.C. operates a Fox Hills producer in the Powder Mountain Unit which has produced 1,938 MMCF (6/2001) since completion in June 1999 and is still producing at average daily rates in the 2.6 MMCFD range. Alberta Energy has recently reached TD on a deep wildcat in the Blue Haystack Unit in the southern Washakie Basin.
The Powder River Basin Fort Union CBM play continues to expand with initial production from the Montana portion of the basin initiated in early 2000 by Fidelity Exploration (Redstone Gas Partners). This 9-section pilot program on the C-X Ranch in Big Horn County is producing 400 MMCFG/month and 1 MMBW/month from 118 wells and appears to be dewatering nicely. In 2000, 147 BCE of CBM gas was produced from 4,200 wells in the Wyoming portion of the Powder River Basin Fort Union CBM play.
In Fremont County in Steamboat Butte Field, Marathon as operator has revitalized a field initially discovered in the mid 1940s. Eight new wells were brought on after January 2000 and these wells have produced 792 MBO, 88 MMCFG, and 11.3 MMBW from the Tensleep and Phosphoria reservoirs.
In the Wind River Basin, Phillips and Devon are drilling 3000′ coal strat tests 5 to 6 miles west of Beaver Creek Field in Fremont County, Wyoming.
Condor Exploration revived an old field in Lincoln County in the eastern part of the Overthrust Belt at Horse Trap Field with gas production from the Amsden at about 5700′ in two wells at rates of around 2 MMCFD. One of the wells has made about a quarter of a BCF of gas during its first six months on line and is still flowing at almost 900 MCFD.
On the northern Moxa Arch Enron Oil and Gas completed a new Almy oil well in Star Corral Field that has already made over 100 MBO, in 19 months, from perforations above 3000′. Texaco made a northwest extension of the Emigrant Springs Unit, IPF 4.9 MMCFD from the Frontier Formation at the Rimrock #11-13 (NW Sec. 11, T24N, R113W). In the third quarter of 2001, a recompletion in the Mowry at the north end of Henry Field flowed 1000 BO the first day after being perforated, and stabilized at a lower rate subsequently.
Texaco has completed the majority of development at Stage Coach Draw Field in Sweetwater Co., WY. Stage Coach Draw Field is productive from a stratigraphic trap contained within a marine facies in the Almond at a depth of 8000′ situated some 30 miles west of the Rock Springs Uplift. This field is highly significant in that it is found considerably west of where many geologists had mapped the regional Almond marine/non-marine contact, opening up a large potential area for exploration. The productive marine sand ranges up to 30′ thick with porosities of 10-18% with associated permeabilties of 0.08 – 10 md. IHS data showed the field cumulative production as of 3/2001 was 11.9 BCF from 24 active wells.
- Greater Green River Basin (including the Overthrust Belt) – Production from 170 new wells in six counties, five in Wyoming plus Summit County, Utah, a total of 103.5 BCF and 1.8 MMBO. 51% of the gas production and 32% of the oil production comes from 81 wells producing from the Lance. 5.6 BCF comes from a single Nugget well in East Painter Reservoir, and 19.6 BCF comes from 44 Almond and Mesaverde wells in Carbon County.
- Wind River Basin – 34 new wells in Fremont and Natrona Counties with 31.2 BCF of production, including 10.4 BCF from one Madison well in Madden Field.
- San Juan Basin – 21.8 BCF of natural gas produced from 53 new wells in Colorado and New Mexico, over 10 BCF of the 21.8 BCF from the Fruitland coal.
- Piceance Creek Basin – 14.1 BCF produced from 44 new Williams Fork-Cameo wells in Garfield County, Colorado.
- Uinta Basin (including Drunkard’s Wash Field area ) – 12.4 BCF from 44 new Wasatch and Mesaverde wells in Natural Buttes and Wonsits Valley Fields plus 6.2 BCF from 76 new wells producing from Ferron CBM.
- Powder River Basin – the Fort Union coalbed methane play, with 7.2 BCF produced from 29 wells; 16 Wyodak wells (4.0 BCF), 7 Anderson coal wells (1.6 BCF), and 6 wells completed in the Canyon coal interval (1.6 BCE).
- North Central Montana – 3.9 BCF produced from 12 new wells in the Eagle Sandstone play, producing from depths of 900′ to 2200′.
- Williston Basin – Nesson Anticline – mostly Madison production, 7 of 9 wells; total production from 9 new wells: 341 MBO and 3.7 BCF
- Denver Julesburg Basin – 7 new wells (2 Dakota, 1 D Sand and 4 J Sand) produced 2 BCF and 46 MBO in Weld County, Colorado.
- Paradox Basin – Andy’s Mesa Field – 0.5 BCF produced from two new Cutler-Arkose wells in San Miguel County, Colorado
North Dakota–In an area generally between T142-148N and R102-103W the Nisku-Birdbear play has panned out in three counties, where there are five new wells, three operated by BTA, that have each produced over 100 MBO since 1/2000. Cumulative production from these five wells totals over 1 MMBO, 600 MMCFG, and 386 MBW. The play was initiated in 1997 in Beaver Creek Field, which is still undergoing exploitation as are Bicentennial and Boxcar Butte Fields. The Birdbear is the target of a horizontal drilling program by Aviara Energy Corp. in Beaver Creek Field.
Nebraska–In Dundy County, in TIN, R36W there is one well in Burntwood Field that has produced 550 MMCF in 10 months. In the same township, in Millenium Field, two new wells have combined to produce over 277 MBO from the Lansing Kansas City.
Utah–Development of reserves in the upper Cretaceous and Tertiary reservoirs continued with 12.4 BCF produced from 44 new Wasatch and Mesaverde wells in Natural Buttes and Wonsits Valley Fields. Drilling depths are 6000′ to 8000′ with some 11,000′ wells; completion intervals generally range from 5500′ to 8000′, with some as deep as 11,000′.
Production from the Ferron Formation CBM play in Utah has continued to increase with 51.67 BCF produced from 369 wells during 1999 increasing to 75.52 BCF from 486 wells in three fields: Drunkards Wash (66.55 BCF), Helper (7.19 BCF), and Buzzard Bench (1.78 BCF) in 2000. In 2000 and 2001 at least 10 wells were drilled or re-drilled in Castlegate field by J.M. Huber. Patina Oil and Gas Corporation purchased 50% of Castlegate Field in April of 2001, reportedly acquiring 27.5 BCF of proved reserves.
Colorado–In the Piceance Creek Basin the decrease of the minimum drilling and spacing unit to 10 acres in parts of the Rulison – Mam Creek – Grand Valley field areas has spurred the activity in these fields as evidenced by the 14 BCF produced by the 44 new completions.
In eastern Colorado, the Niobrara gas play was seeing new life and development with the increase in gas prices in late 2000 and early 2001, resulting in top bids for a Yuma County tract on the southwestern flank of Beecher Island field in the August state sale, which sold for up to $140 per acre.
In hindsight, the year of 2000 had significantly higher petroleum prices than the year of 2001. CIG natural gas spot prices started from a low of $2.21/MCF in January 2000 and climbed to a high of $7.94/MCF in December 2000, followed by the year 2001 high of $9.07/MCF in January, and falling to a low of $1.47/MCF in November 2001. Wyoming sweet crude oil prices hit a low of $22.25/Bbl in April 2000 and climbed to a high of $32.00/Bbl in November 2000. The 2001 high was $27.50/Bbl in February 2001 and the low was $ 14.25/Bbl in November 2001.
As the nation looks to the Rockies as a promising source for future energy needs, particularly for natural gas supplies, it is a little disconcerting that no new major gas plays are indicated despite increased exploration and drilling activity. While no “hot new Rockies plays” comparable to horizontal Bakken, Lodgepole mounds, Jonah tight gas, or Cave Gulch subthrust plays of years past emerged in the past two years, and while it appears that no new major CBM areas were brought online in 2000 and 2001, it is likely that one of several emerging CBM plays in the Rockies will be the next “hot” gas play.
In the Powder River Basin operators were busy expanding the existing play, with initial production in Montana from a pilot project, finding gas production at deeper drill depths, and trying as yet unproven coal beds. Most CBM operators are faced with regulatory policies regarding surface water discharge/disposal issues that have limited the pace of development.
Geologists working for both large and small companies will be challenged to generate many more “unconventional” plays and prospects while pushing the lowest limits of reservoir quality and obscure trapping mechanisms. Geologic workloads and productivity have increased, with many geologists making use of raster logs to generate multiple cross sections quickly. Developing economic plays will not be possible without improved land access in the west, reasonable environmental policies, risk-tolerant corporate leadership, and innovative geological thinking.
Information provided in this article was borrowed freely from The Rocky Mountain Oil Journal, IHS Energy, and the IPA/MS Wildcatter Weekly. Any misstatements or inaccuracies should be attributed to the authors. Please contact the RMAG office with comments.