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Comment by L Davis on June 19, 2011 at 4:36

The following ad was in the El Dorado paper 06/19/11.  Is anyone familiar with this type meeting and what might be discussed?

 

NOTICE OF
INFORMATIONAL MEETING

The Arkansas Oil and Gas Commission (AOGC) will host informational panel discussions regarding the recent oil and gas leasing activity in Union and Columbia Counties.

The first panel discussion will be held at a public meeting beginning at 6:30 pm on June 22, 2011 at the El Dorado Conference Center, 311 South West Avenue El Dorado, AR 71730.

The second panel discussion will be held at a public meeting beginning at 6:30 pm on July 6, 2011 at Magnolia Junior High School Auditorium, 540 East North Street, Magnolia, AR 71753

ARKANSAS OIL AND GAS COMMISSION
Lawrence E. Bengal, Director

Comment by L Davis on June 13, 2011 at 5:33

The article 'Oil in Smackover Formation' has been posted on Forbes.com

 

http://www.forbes.com/feeds/ap/2011/06/13/business-energy-us-smacko...

Comment by L Davis on June 13, 2011 at 2:52

This is an expanded version of the Ch 7 article that was in the El Dorado Paper today.

Oil in Smackover Formation

Can it be tapped? That’s the ‘million-dollar’ question

By: - -

Published: 06/13/2011

Oil-soaked well crews were a common sight around El Dorado and Smackover in the early 1920s.

By CHUCK BARTELS

Associated Press

SMACKOVER (AP) — Oil companies have been furiously buying leases in south Arkansas in hope of getting a share of oil trapped in limestone almost two miles beneath the ground.

Whether that oil can be tapped affordably remains to be seen.

“That’s the million-dollar question,” said David M. Schoeffler, senior project manager for Schoeffler Energy Group in Lafayette, La.

Schoeffler said the firm was “very much involved” in buying leases for a client, despite the uncertainty of the find.

The oil is in what’s known as the Smackover Formation, which is different from the shallower Smackover Field, a source of oil in Union County since the boomtown days of the 1920s.

The town of Smackover, population 2,000, is home to the Arkansas Natural Resources Museum, formerly known as the Oil and Gas Museum. An introductory display explains the various layers of rock and oil deposits beneath the ground, but it only goes down to 8,000 feet.

The oil that’s creating the excitement is trapped in limestone between 9,000 and 10,000 feet deep. It has been tapped by one exploratory well, which only pumped out about 45 barrels per day, said Lawrence Bengal, director of the Arkansas Oil and Gas Commission.

Even at prices near $100 per barrel, that’s hardly enough to pay for an investment of more than $10 million, especially considering that oil wells produce a diminishing return as the supply is tapped out.

Another firm has applied for a permit to drill a second exploratory well.

Bengal and others say drillers need time to perfect the method, just as natural gas drillers in the Fayetteville Shale play needed time to work out the technique of using water and chemicals pumped in to the ground at high pressure to fracture rock and extract the fuel.

One difference is that the oil drillers will be trying to penetrate limestone, not shale, which is much less dense.

Rob Reynolds, president of Shuler Drilling Co. in El Dorado, said initial costs will be high for companies that want a piece of the action.

“Rocks are more complicated than people think,” Reynolds said. “To give up their contents, it may take a while to figure out how to do it.”

Technology continues to advance, yet even with improved methods, Reynolds said the formation is not guaranteed to lead to an oil boom.

“There is no way to predict the success of this venture,” Reynolds said.

There is plenty of evidence around Smackover and the rest of Union County, near the Louisiana border, of the cycles of the oil business. Oil pumps bob up and down in farm fields while elsewhere abandoned equipment rusts amid high weeds.

Bengal said the most intense leasing is taking place between Magnolia in Columbia County and El Dorado, but the activity stretches into Claiborne and Union parishes in Louisiana and as far west as Miller County and into Texas.

“Much like the Fayetteville Shale (in north-central Arkansas), where people started taking leases in east Arkansas, as far as Woodruff and Cross counties. Those areas were initially thought to be prospective though they turned out not to be,” Bengal said.

Firms involved in buying the leases often are working for oil companies, and neither group is too interested in talking about what they’re up to because of intense competition.

James Fugate, president of Pinebelt Energy Resources Corp. in Fairhope, Ala., said, like Schoeffler, his firm bought leases and the project is now on hold.

“It is certainly large,” Fugate said of the scope of the play. But he could say no more, explaining the work was “a very confidential project.”

Reynolds said his company doesn’t have a direct stake in the play, but the business is well situated if there is a rush to drill.

“You always hope to,” Reynolds said. “It can always develop in a manner different than we had in mind.”

The method of using millions of gallons of fluid to fracture rock, known as hydraulic fracturing or fracking, has caused environmental concerns over disposal of waste water and possible contamination of drinking water wells. The Oil and Gas Commission has ordered a halt to work at two natural gas wells north of Conway, where fracking is suspected of triggering small earthquakes.

The Sparta Aquifer, which is Union County’s only source of drinking water, is only several hundred feet deep. Bengal said drillers don’t need a water permit as there is no indication the drilling would impact the aquifer.

The first exploratory well was drilled horizontally, rather than straight down as wells were commonly drilled to reach oil that’s closer to the surface.

“The (horizontal) wells are more costly than a shallow, vertical hole,” Bengal said. But the expense doesn’t mean only very large oil companies, such as Exxon Mobil Corp. or Royal Dutch Shell, are the only ones that could afford to make the investment.

“You can have smaller independents in this type (of exploration),” Bengal said.

Reynolds said there is a significant risk for investors, large or small.

“There’s no substitute for judgment,” he said.

Comment by L Davis on June 12, 2011 at 12:34

This short reprot was on the June 12 Ch 7 news out of Little Rock. 

 

'Million dollar question' looms over Smackover oil

Posted:
Jun 12, 2011 2:35 PM CDT Updated: Jun 12, 2011 2:35 PM CDT

Arkansas Headlines More>>

'Million dollar question' looms over Smackover oil

 

By CHUCK BARTELS Associated Press

SMACKOVER, Ark. (AP) - County clerks in south Arkansas are busy keeping up with oil leases changing hands because there might be a new oil source in the region.

The area with the most intense speculation is between El Dorado and Magnolia, but speculators and agents are buying leases as far west as Texarkana.

They're gambling that oil trapped in limestone about 10,000 feet below ground can be tapped using a method of fracturing rock similar to the one being used to extract natural gas in the Fayetteville Shale play in central Arkansas.

One test well pumped only 45 barrels per day, but people involved in the industry say it'll take time to perfect the method. Even so, it remains to be seen whether the finds will bring an oil boom to the area.

Copyright 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

 

 

 

Comment by North LA on June 7, 2011 at 6:27

L. Davis,

 

From what I've read, I understand the Tuscaloosa to be the equivalent to the Eagleford in Louisiana both are crestaceous whereas the smk is jurassic. I have read some papers that describe an Austin chalk/eagle ford/smackover source rock. Maps I've looked at show the Smackover below the eagleford until eastern texas at which point the smk turns north and then straightens east along the LA/Ark border until it gets to miss at which point it turns southeast. I've also read that the characteristics of the eagleford are similar to the smackover but they are not the same formation.

Comment by Paul M. Hess on June 7, 2011 at 5:46

Under Atlanta field, I doubt fracs would need to be done to that extent.  If any, initially!

Comment by L Davis on June 7, 2011 at 5:17

North La

Last year,  Murphy E&P completed the Drees A-79 1-H well in the Eagle Ford in Karnes County, TX.  The well had a 15 stage  fracture treatment along a lateral section of 4,985 feet.  The initial flow rate was 1,462 barrels of oil and 1.25 million cubic feet of gas.  I have no idea if there is any correlation between the Eagle Ford and the brown dense but wonder if this many frac stages will be required to do anything with the brown dense?

Comment by Paul M. Hess on June 7, 2011 at 4:51

Whenever the drilling gets started, it is the well proposed in section 14 within Atlanta Field which will have my attention. I have no interest in the well other than it is a test I have wanted to see done since my days with TXO Production in the 80's. I wish them well and much success.

Comment by Skip Peel - Mineral Consultant on June 7, 2011 at 4:02

Well permits and unit apps are welcome but when will J-W or Triad actually drill a well?  It's now 4 months since the permit was issued for the J-W horizontal in Union County and 3 months from the date they set in their application for the commencement of work and still no spud date shown in the AOGC database.  Anyone got a report of activity at the drill site? 

 

 

Comment by North LA on June 7, 2011 at 3:54

Thanks L. Davis for the story. Drum beats are increasing in frequency but it looks like we'll still have to be patient for a while longer. My suspicion is that this Triad well is another test and not part of a breakout so getting accurate data after the well is drilled may be next to impossible. The good news is that Triad is drilling after the Brammer well and that this well will have a 4,000 foot lateral as opposed to a 2000 ft lateral. Maybe they'll frak it more than 3 times also. The O&G companies are taking their time on this play but I guess the formations aren't going anywhere so there is no need to get in a hurry. 

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