Replies to This Discussion

Permalink Reply by Skip Peel - Mineral Consultant on February 24, 2013 at 12:13

We're still waiting ( 3+ years) for a commercial BD well.  Once that is done it will be a year or so to drill enough wells to define the limits of the economic fairway(s).  The good news is that the BD isn't the only target horizon in N LA.  And IMO the other formations have better prospects than the BD. 

Permalink Reply by tony allen on February 24, 2013 at 14:18

Skip, which formations do you think have the most potential and are the unconventional or not? Who do you think are the players involved in these plays since it seems SWN has BD blinders on?

Permalink Reply by Skip Peel - Mineral Consultant on February 24, 2013 at 14:47

Wet gas,NGLs, Condensate ..even a little oil may be found in multiple formations in NW LA and E TX.  The Cotton Valley has multiple sand members that are being produced now with others targeted for future development.  See Indigo in S Caddo and N DeSoto parishes.  Anadarko in Panola County coming soon to N Caddo and Bossier parishes.  Indigo and Wildhorse Resources in Lincoln Parish.  Check out the condensate in the Haynesville Sand wells drilled by AIX Energy.  XTO has been producing the Gray Sand (Upper Smackover member) for years and now has spud its first horizontal Gray Sand well.  These are not unconventional resource plays but they occur in areas where the formations are tight.  The key to producing these "wet" wells is access to NGL treating and transportation.  Although there was some existing infrastructure there has been a number of new pipelines and treating facilities extended into the areas where these plays are emerging.  Everyone following the BD seems to get excited at the idea of SWN bringing in a 500 bbl day well when Indigo has a CV well IP'ed at 3,019 boed.  Although you have to take into account unit production by LUW Code do a search for Wildhorse wells in Lincoln Parish.  I think you'll be impressed.  I think SWN will find portions of its BD leasehold prospective for these other formation.  And other operators will look to JV or farm in.  I think the Brown Dense will be overshadowed by these other formations.

Permalink Reply by tony allen on February 24, 2013 at 15:41

Thanks Skip, Do you see any of this activity spreading into S. AR and what do you think they are looking for on the 3D shoot? Multiple horizons? I ask a man about extending the shoot into the Chalybeat Springs Unit and he said they had plenty of well comtrol there. Since such a huge part of the shoot area is HBP would that not give them the well control they need or is the 3D vastly better?

Permalink Reply by Skip Peel - Mineral Consultant on February 24, 2013 at 16:00

Well control is a matter of depth.  Areas of large numbers of shallow wells provide no well control for deep horizons.  If you were to look at wells in NW LA for example there would be tens of thousands (some sections have 400 to 500) but when you take away those deeper than say 5,000' you eliminate 90%.  When you take away those deeper than say 7,500' you've now eliminated 99%.  Wells deeper than 9,000' are generally as rare as hen's teeth.  The Baron and I both commented on the lack of well control available to SWN for the Brown Dense in early discussions.  This was confirmed when they applied for their first LA drilling unit and one reference well was 30 miles or so West and one 8 or 9 miles East.  I'd never seen a reference well utilized in an application that was that far from the section being unitized.  3D seismic is cheaper than drilling test wells but can not replace actual well logs and cores for the science need to define a formation in a particular area.  Do a SONRIS well search by township for 23N - 19N - 13W - 9W.  You won't find many older L SMK wells but you will find plenty of Cotton Valley, Haynesville and Gray Sand completions.  All of those formations have relatively high levels of well control.  I'm not sufficiently familiar with AR to answer your question regarding likely liquid target horizons.

Permalink Reply by Big Little Oil on February 25, 2013 at 4:22

Could you direct us to the name of the Indigo CV well that IPed at 3000 boepd? When was it drilled and what parish?

 

Thanks so much.

Permalink Reply by Skip Peel - Mineral Consultant on February 25, 2013 at 4:31

Indigo Tests Horizontal Cotton Valley Well Flowing 3,019 BOE per Day
HOUSTON, June 29, 2012 – Indigo Minerals LLC (“Indigo”) today announced that it has tested a new horizontal well targeting the Cotton Valley formation in North Louisiana. The Berry 25H #1 located in the Caspiana Field, Caddo Parish, Louisiana flowed at a rate of 3,019 BOE per day (65% gas, 35% NGLs and condensate) during a 24 hour test period. This Cotton Valley well has a horizontal lateral length of 3,700’, a total measured depth of 14,175’ (9,981’ TVD), and was fracture stimulated utilizing 12 separate stages along the lateral. The production is flowing to sales via a new 20-mile DCP Midstream Partners pipeline that carries the full well stream to the DPM plant located near Carthage, Texas for further processing and NGL extraction.
Indigo has assembled 60,000 net acres in this immediate area and has drilled 24 horizontal Cotton Valley wells on this large acreage block to date. Several of the Indigo wells in this area have tested for over 1,500 BOE/D including one well that was over 3,300 BOE/D. These horizontal wells have set new company records as well as a new industry record for horizontal Cotton Valley wells in the overall Ark-La-Tex region. Indigo has identified over 500 additional Horizontal Cotton Valley proved locations in this area of North Louisiana and is currently running 3 horizontal rigs and will be adding a fourth rig in July to further exploit this particular acreage block.
In total, Indigo has 120,000 net acres in the Ark-La-Tex region with net production of approximately 70 Mmcfe/d, projected to reach 120 MMcfe per day (~20,000 BOE per day) by year end 2012. Including the Berry 25H #1, Indigo is currently flowing back 3 new wells at a combined rate of approximately 26 Mmcfe/d (5,786 BOE/D) gross and has another 7 new horizontal Cotton Valley wells drilled and waiting on completion.
Indigo was originally formed in October 2006. The company is backed by Yorktown Partners, the Martin Companies, Ridgemont Equity Partners and Indigo management. Through its relationship with the Martin Companies, Indigo owns the existing oil and gas leases and minerals of two of the largest private landowners in the state of Louisiana - Roy O. Martin Lumber and the Martin Timber Company.
Except for the historical information contained herein, the matters discussed in this news release are forward-looking statements within the meaning of the federal securities laws. Important factors that could cause our actual results to differ materially from those contained in the forward-looking statements include early initial production rates which may decline steeply over the early life of wells, our growth strategies, our ability to successfully and economically explore for and develop oil and gas resources, anticipated trends in our business, our liquidity and ability to finance our exploration and development activities, market conditions in the oil and gas industry, our ability to make and integrate acquisitions, the impact of governmental regulation and other risks.
Forward-looking statements are typically identified by use of terms such as "may," "will," "expect," "anticipate," "estimate" and similar words, although some forward-looking statements may be expressed differently. All forward-looking statements contained in this release, including any forecasts and estimates, are based on management's outlook only as of the date of this release, and we undertake no obligation to update or revise these forward-looking statements, whether as a result of subsequent developments or otherwise.