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I attended the pre-application conference for a 1440 acre unit for Austin Chalk that was held Wed. March 23, 2011 at Liskow and Lewis's office in Lafayette for Anadarko. At the conference Anadarko's representative presented a proposed unit that was 1 1/2 x 1 1/2 miles square. Their reasoning was that they intend to drill a long lateral - 7000 ft. or so. Can't understand why the unit would be as wide as long and my question to that fact was not answered. The attorney and geologist seemed very concerned that the question was even asked. So My first concern since the hearing is: Will this increasing of the size of the units from the previously established 960 acre unit in the area discriminate against some land/royalty owners? Will their royalty be diluted for the company's purposes?
The next question is: Will drilling a very long lateral in a very "naturally" fractured area cause damage to the formation because of mud loss. This formation does not have a sand or shale matrix - it is simply a solid formation (Calcium Carbonate) that has been naturally fractured by geology and geological events and contains oil and gas in those fractures. It is truly a "horse of a different color" so to speak with natural fractures that can be filled with mud and cement while drilling and thus damage the formation and make it unproduceable or limit production on completion. We experienced this in the 70's and 80's when the Port Hudson area was drilled for Tusc. We had a number of wells that were dry holes in Tusc. and when the Austin Chalk was looked at as a second thought they found that the formation was so "mudded up" that it was unproduceable. Its my understanding that in some areas, roughly from St. Landry to Livingston Parish, the Chalk is so fractured on the South side of the Edward's Reef or Shelf that in these areas it is like a "gravel bed". In the past there was great difficulty maintaining circulation when this was encountered and to my knowledge no wells that had circulation problems of this type were able to be produced in Austin Chalk after drilling through to TUSC. So my last question for the experts here is: Has the mud engineering and drilling technology advanced to the point that the mud can be controlled, in a long lateral, to the point that it will not interfere with the natural fractures in a very fractured zone of the Austin Chalk formation?
Joe, I think that you are asking a valid question. The larger the units the less the folks within the unit get. If they want to make long laterals, then shrink the size of the width.
Very few landowners made any money from the chalk back in the mid 1990's where they formed these giant units. I feel that anything above 640 acres puts a screwing on the mineral owners.
Ken,
I almost did not go. The meeting was downtown at L&L's offices. We must have had between 35 and 50 people packed into a conference room. I had not been in the downtown area in 30 to 40 years so its a good thing I had GPS mapping. Lafayette is not easy to find an address in when you are not familiar with the city.
Jay,
One of the questions from the group to the Anadarko geologist was about fracking. He stated that Anadarko had no intention of fracking the chalk. According to him It was naturally fractured and that was sufficient. Again my concern is that the drilling of a long lateral would damage the formation due to mud loss. If you fill the voids with mud and/or cement as Nelson and Pryme did then you damage the formation. Also, Its interesting that Anadarko has had limited success in the wells in Vernon Parish - either they don't have good fractures in that area or they are "mudding" the formation up. The wells from St. Landry to Livingston Parish should come in at 1000+ bbls. per day with a short lateral of 4500 ft. or so if the formation is not "mudded" up. At that rate the well will pay out in 6-8 months. I think that is a pretty good deal for any operator.
Jay,
According to your post they are having problems. I don't think they know everything about drilling the AC.
Jay,
I'm sorry I must be a little dumb or something; I have no idea what EUR's means. The only think I can come up with is European Currency. I don't think that is what you are talking about here. So if you would please enlighting me I would appreciate it.
I think Anadarko has not only fallen off the turnip truck but is now pulling it. The GARS wells are all producing in the 100 bbls. range and they have just sited another. There are WX operators that are producing that for less than 1/10 the cost of a chalk well. Unless Anadarko can get the production up they need to find a cheaper play to play in.
Matt,
Anadarko is asking for a geographic unit to force pool the mineral leases in the area into a unit. Some operators like to unitize an area before drilling because they have expiration problems with some leases in the area and after unitization all of the property in the unit will be kept from expiring while under operations. They also may have other reasons to unitize before drilling the well. But, Me, I think its because they have leases that are tight and they want as large unit as they can get to hold as much land as they can.
There was no well site shown but one of the people stated that he had been told the well was going to be in the upper right corner of the unit. That agrees with what the geologist said about the direction that they wanted to drill the lateral. But to be specific: No, they did not site the well.
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