ConocoPhillips disappointed in Louisiana Austin Chalk
By Jordan Blum Updated 9:00 am CDT, Wednesday, July 31, 2019 chron.com
Hoping that the Louisiana Austin Chalk could be a next big onshore oil play, ConocoPhillips said the exploratory well results have proven disappointing thus far.
With South Texas' Eagle Ford shale aging and West Texas' thriving Permian Basin increasingly dominated by supermajors such as Exxon Mobil and Chevron, Houston's top operators have explored the Louisiana chalk as they seek the next big find in the nation's shale revolution.
ConocoPhillips, EOG Resources and Marathon Oil all bought up big acreage blocks in Louisiana during the last couple of years hoping to strike strong oil production.
"The results to date are disappointing," said ConocoPhillips Chief Operating Officer Matt Fox. "The oil rates have been about a 100 barrels a day. It's just unlikely to be enough to justify a development in that part of the play."
Three out of ConocoPhillips' four test well thus far in Louisiana have produced more than 90 percent water and not enough oil to justify big investments, he said. The Austin Chalk stretches from South Texas through Louisiana and into Mississippi.
However, ConocoPhillips will keep examining the region and explore more with the overlaying Tuscaloosa Marine shale in the same area in Louisiana, Fox added.
"There are targets in the Tuscaloosa Marine shale," he said "So the acreage is not condemned, but that primary target in the Austin Chalk doesn't look encouraging just now."
Instead, ConocoPhillips will focus more on ramping up its modest activity in the Permian Basin.
(Note - I Posted this on another thread before seeing this new thread)
That's a pretty condemning news article for the play - at least in the areas where CP has been active and drilling. Discussing the TMS as an alternative here doesn't make me feel any better either considering the difficulties with that play.
CP's comment about focusing on the Permian Basin makes sense considering their position - there they have "proven reserves" and just need to put capital into those areas to exploit it.
In saying all this, a major spending several millions of $$$ for acreage and drilling / evaluation in a new play area is typical. I have seen it across the USA and overseas in many different plays.
Now the questions is - What about the other operators in the La Hz AC play??
PS - Expect an update from Kirk on his site about CP's position.
Kirk has posted an update on his blog July 31
Quicker than I thought / he is on top of things
Kirk has a reason to rush to damage control. He has a lot invested in the LA MS Stack Play as he so optimistically calls it. This area is his baby but it is hard to believe that the companies exploring the LA AC don't know what he knows and haven't taken into account all the known variables.
Correction to the Houston Chronicle release - the TMS "underlies" the AC section. Not "overlaying" as noted in the article.
What does DHC/CC mean? And MMBO EUR?
MMBO EUR is million barrels of oil and EUR is Estimated Ultimate Recoverable, a projection of total cumulative production over the lifetime of a well. Got any context for DHC/CC?
Dry Hole Costs/Completion Costs
check Kirk's last paragraph on his recent blog post for DHC/CC . . . and thanks for your response.
Point to keep in mind as to CP recent actions - they have been a very active player in the Eagle Ford / Austin Chalk trend in S Tex (Live Oak / Karnes / McMullen County area) for over 10 years. They have played it like they should (in my opinion) with lots of tech effort (logs, core, analysis, engineering work, etc. to understand the reservoir and its pros and cons).
Very similar to EOG's approach to these types of plays.
For them to publically "pull the plug" on La AC Hz Frac play at this time should be not be construed as a knee jerk decision but one that was well thought out based on the integration of the new info that they obtained via their recent drilling and completion efforts with the regional mapping of the historial info in this area.
And this includes comparing those results / observations to their analogous S Tx efforts.
Some companies may have gone stealth on their efforts in Louisiana chasing the AC - and if things didn't work, that effort would have been swept under the rug and no one would know any better about what they ha done. But early on, CP posted about this play and therefore had to "respond to the analysts" and Wall Street as to their results and future plans.
A good and responsible move by the CP managers (in my opinion).
This decision is probably a "non event" as to the CP stock. Those in the know will just chalk it up to a major operator checking out another new play area and then not having it "work:.
There are still several players in the trend and it is a LARGE trend. It will be interesting to see what transpires here in the next 12-18 months.