Monday, June 18, 2012 by Bevis Yeo

Grand Gulf Energy increases stake in Arkansas oil prospect, drilling to start soon

Grand Gulf Energy (ASX: GGE) has increased its stake in the Leduc Reef prospect in Lafayette County, Arkansas, to 22% from 14%, giving it increased exposure to a 1.2 million barrel of oil target.

The wildcat exploration well targeting the prospect is expected to spud in late July or early August and will be drilled to a total depth of 8600 feet (2621.3 metres).

Production is expected to range from 100 to 300 barrels of oil per day and there is potential upside for up to 12 million barrels of recoverable oil to be found.

The Leduc Reef prospect is a new play type for the area and its success will open up further opportunities for Grand Gulf Energy, which has the right to participate pro-rata in any new prospects generated in an upcoming 3D seismic survey.

The secondary objective lower Smackover Formation has its porosity development proven in the nearby Midway Field where over 60 million barrels of oil have been produced.

Grand Gulf Energy is paying US$280,000, or 26.66% of the initial well costs, to earn its 22% working interest in the prospect.

In a success case the company will have to pay a further US$168,000 as its share of completion and facilities costs.

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Replies to This Discussion

What is the latest information on this well?

Unless I have missed it, there has been no permit issued yet..

Someone from Lewisville told me today there is a well around Magnolia producing like gangbusters. Said everyone is very secretive about it and he couldn't tell me the operator name or any other info. Said it was a test well going down to 13,000. Sound like anything you have heard of?

Check the permits for the last 6 months.  I don't think you'll find a well permitted to 13,000' in S AR.  Also 13,000' True Vertical Depth would be awful deep for oil. And I doubt any company is drilling deep wells for gas.  Sounds like an unfounded rumor.

Skip, this isn't the Ludac Reef, but the AR permits today list a permit for the following:

03 091 10912 Mobley et al 1 Kiblah TVD: 6600' Pettet

Cypress Operating, Inc. SHL: 173' FSL & 2768' FWL Miller MD: 11,600'

330 Marshall St, Suite 930 17-20S-26W

Shreveport, LA 71101 PBHL: 448' FNL & 3032' FWL

Nabors Completion & Production Services 8-20S-26W

9/15/2013 Latitude: N 33.01950639º

Longitude: W -93.82295676º 

What do you think of that?  I don't recall a horizontal in South AR, outside of the LSBD.

There have been some Pettet horizontals on the LA side of the line.  Nothing to get excited about yet but several operators continue to permit and drill.  I have noticed Cypress Operating recording leases in far north Caddo lately.  It's plausible that their interests extend into AR.  Petro-Chem and SM Energy have drilled horizontal Pettet wells in N LA.  See S/N 245872 (Bossier) and 246702 (Claiborne) by Petro-Chem and S/N 232424 and 233114 in Bienville by SM Energy.  I have mentioned this interest and these wells in the past but no one seems to care about them.  The buzz over the LSBD appears to have made many blind to the other exploration going on in their back yards.  The Rodessa formation is also getting some attention in NW LA, SW AR and NE TX.  Liquids, especially oil, is what all operators large and small are after.

Here are the new AOGC applications and 2 are about the Pettet and one new SMK that SWN went non-consent. Interesting insight in the resume of efforts. Also a old CV reentry just above the stateline.

Will Drill SMK well

http://www.aogc2.state.ar.us/Hearing%20Applications%20Archive/2013/...

Weiser Brown CV reentry

http://www.aogc2.state.ar.us/Hearing%20Applications%20Archive/2013/...

4 R Operating horizontal Pettet

http://www.aogc2.state.ar.us/Hearing%20Applications%20Archive/2013/...

Cypress Operating horizontal Pettet

http://www.aogc2.state.ar.us/Hearing%20Applications%20Archive/2013/...

Some people do care and are not blinded by the LSBD

 

 

Tony,

Cypress should be watched closely due to possible ties they have to a larger operator. This larger operator is very interested in any play that has potential in the liquid plays of NE Texas, NW Louisiana and SW Arkansas. 

There is already enough information on an area of the lower smackover in extreme NE Caddo Parish to satisfy curiosity for it's potential. One such well was produced from approx. 10 ft. of vertical perforations and did extremely well before it was plugged back and produced from the CV.

The horizontal Pettet wells are still being evaluated by those putting their interest there. One problem that arises is that there are already several vertical wells drilled in very close proximity to one another and are currently producing from that zone and this can cause conflicts in not only mineral interests for all parties but, can also create co-mingling of production from the vertical and horizontal wells.

To do a long Pettet horizontal (or any other shallow formation where co-mingling could be a problem) all parties involved have to be together. In some cases they will even plug some vertical wells to make the horizontals possible. In North Caddo Parish this has and will take time to work through.

Some of the Pettet horizontal wells were drilled in areas not having high concentrations of active Pettet producing wells (except the one in Hosston, La. by Petro-Chem) and may increase activities where vertical Pettet wells weren't a target of old.

I'm not sure where to put this info and it may be already out there. SWN is moving Rig 20 onto new location today about 6 miles north of the Louisiana line into Arkansas off Highway 19 south of Magnolia. This is a LSBD.

I received an Lease offer tody for my minerals in T20S, R23W. $250 3yr/2yr-opt. 1/5.  Leasing by Mark O'Neal & associates (Baton Rouge). They are leasing in "Columbia and Lafayette counties" This property is just north and west of Springhill LA. and below Lake Erling.

Any Input would be appreciated.

Find out who Mark is leasing for, then way your deal out as to the company's reputation as to being straight up with the lessor. Some operators don't live up to their contracts.

Gatrpaw,

Cypress Operating has completed the Mobley well in the Miller County unit and it produced over 18,500 bbls. of oil in the first 4 months. It shows no water or gas.

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