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Permalink Reply by Skip Peel - Mineral Consultant on January 11, 2015 at 4:09

Helis addresses questions on drill plans

Permit sought for fracking

By Faimon A. Roberts III

froberts@theadvocate.com

Helis Oil & Gas Co.’s proposed St. Tammany Parish well would tap a previously unexplored rock formation that is limited to the southern part of the parish, according to documents submitted to the U.S. Army Corps of Engineers.

If the formation proves to be a viable source of commercial oil and gas production, it could increase the known fossil fuel reserves in the state and help the United States gain energy independence, Helis contends in the documents.

Though the formation is part of the Tuscaloosa Marine Shale, it has not been explored to date, and Helis wants first to drill an exploratory vertical well on the site to see whether the formation could be commercially profitable.

Helis identified the formation only recently by studying available but “limited” data from old vertical wells, according to documents filed with the Corps of Engineers, which needs to grant Helis a permit to drill in wetlands before the project can proceed.

The uncertainty means the rock formation has only a 50 percent chance of being commercially viable, a figure previously cited by a geologist who reviewed the plans for the Corps and with which Helis agreed, the documents say.

“It is far from certain that any drilling operations will be conducted after the completion of Phase I,” Helis says in its most recent filing, a 500-page response to questions raised by the Corps in December. Despite the uncertainty, Helis is willing to take what some have estimated is a $16 million to $20 million gamble on the well, even with oil prices at their lowest point in years.

The low price of oil has driven some companies out of production activity in the Tuscaloosa Shale, but Helis spokespeople have steadfastly insisted that the current price will have no impact on the company’s plans.

A spokesman reinforced that sentiment Friday.

“Helis remains committed to this project and to the established processes for permitting the well, regardless of oil prices or the period of time this particular process will take,” Greg Beuerman wrote in an email.

Data from old wells show that a swath of the underground formation roughly parallel with Interstate 12 is thick enough to accommodate a horizontal well needed for fracking, Helis said. The formation thins out the farther north one goes in St. Tammany Parish, though the formation’s exact boundaries remain unclear pending further data, Helis said in the letter.

Helis said it chose the site of the proposed well — a 960-acre tract about a mile north of I-12 and about a mile from Lakeshore High School — in an effort to avoid the coastal zone south of I-12 and to isolate the well as much as possible from residential areas to the west and sensitive environmental areas such as Bayou Lacombe and the Pearl River Wildlife Management Area.

Because the formation it is eyeing is specific to the local area, Helis emphasizes in the letter that it would be impossible to move the project northward to another part of the Tuscaloosa Marine Shale where drilling is already underway.

“Helis’ proposed project cannot be conducted and its purpose cannot be fulfilled by simply drilling a well anywhere within the established Tuscaloosa Marine Shale Play that is being actively produced to the north of St. Tammany Parish,” the letter says.

Some experts have estimated that the TMS contains as much as 7 billion barrels of oil. If the new formation is a viable commercial source of oil, “it will increase the known oil and gas reserves within the state available for potential production and contribute to achieving the national policy goal of energy independence in the United States,” the letter says.

Helis is prepared in case the formation proves able to produce commercially viable amounts of oil. The company has leases or options on about 60,000 acres in St. Tammany Parish.

Helis’ description of St. Tammany’s unique geological formation is part of a voluminous response to a December letter from the Corps. That letter detailed several concerns of the Corps and the U.S. Environmental Protection Agency.

The EPA urged the Corps to reject Helis’ application for a wetlands permit until the company can show that the well would have minimal environmental impact. Issues raised in that letter and a similar one sent two days earlier — such as storm contingency plans, traffic impacts, water sources and legal entanglements — are all addressed in Helis’ response.

Helis’ proposal has generated considerable public heat, including lawsuits filed by the Parish Council and the town of Abita Springs. Most of the opposition has centered on Helis’ plans to use horizontal drilling and hydraulic fracturing, or fracking, to extract oil from the St. Tammany site.

Fracking is a process by which water, sand and other chemicals are injected into the ground at high pressure. The chemicals crack the rock, the sand or other ceramic material props the cracks open and oil or natural gas then can be extracted.

Helis has proposed drilling the well in two phases: an initial phase, in which a vertical well would be drilled and samples collected for testing, and then a second phase in which a mile-long horizontal shaft would be drilled and fracking would be employed. The company has promised to plug the well and not move on to phase two if the samples collected in the first phase are not promising.

But in St. Tammany, as in some other communities around the country, the prospect of fracking has created a backlash. The Parish Council filed a suit in Baton Rouge to block the plan, and a hearing on that suit is scheduled for Feb. 2.

This weekend, two activists who led a campaign in Denton, Texas, to get an anti-fracking measure on the ballot are appearing in St. Tammany to share what they learned. That measure passed in Denton but is now being challenged in court.

Fighting back against the vocal opposition, business groups such as the Northshore Business Council and the St. Tammany West Chamber of Commerce have come out in support of the Helis plan. They point to potential economic benefits to local businesses and say fracking can help reduce U.S. dependence on oil imports.

Winning a wetlands permit is the only remaining regulatory obstacle before Helis can begin construction on the 3.2-acre drilling pad. Last month, the state’s commissioner of conservation issued a drilling permit for the project, though the permit came with a list of conditions to which Helis must adhere.

This wetlands permit application is Helis’ second. The company was forced to submit a revised application after geologists expressed concerns about whether a proposed 10-acre drilling pad — suitable for both the vertical and horizontal wells — was necessary for an exploratory vertical shaft.

If the wetlands permit is issued and Helis later decides to drill the horizontal well, it will have to apply for another wetlands permit from the Corps to expand the drilling pad.

Follow Faimon A. Roberts III on Twitter, @faimon.

Permalink Reply by Joe Aldridge on January 11, 2015 at 13:36

Skip,

If you read the article closely it says they are looking at something different than what is seen in the northern part of the TMS. That's the same thing the landowners are being told in the Deerford area. The leasing here is characterized as the Louisiana EF. The Southern 1/3 of the play as stated in the dissertation listed on Kirk's site makes it very different than the Northern part of the play. So the area along the shelf and below it, looks like it is gas with condensate. That would make it very different than the oil play to the North. So just tying what we see in this article and what the landowners are being told here opens everything from the Helis well along the shelf to Vernon Parish. This could be a new frontier in the game.

I think we need to look at opening a new Thread on the forum that could be called the "The Louisiana Eagleford". This looks like it extends over a great area and one parish's forum really does not cover the subject and enlighten the area beyond a local area. Just my concern that people with interest in other areas may not find the information because its listed in a local parish and not State wide.

Permalink Reply by Skip Peel - Mineral Consultant on January 11, 2015 at 13:44

I read the article and the correspondence  in the well file before I posted them, Joe.  The Poitevent well is a TMS well and the permit is to the Lower Tuscaloosa Sand in order for Helis to drill completely through the TMS section for testing purposes.  We'll have to wait to see if the formation that far south is wet gas or dry gas if it is commercial at all.  The Zap Minerals well in far south Sabine and the EOG Indigo 25H well in Vernon failed to find commercial pay.  I wouldn't get too far ahead of the facts.

Permalink Reply by Skip Peel - Mineral Consultant on July 1, 2016 at 16:14

Rapad Drilling Rig #38 spud the Eads Poitevent Et Al #1 on 6/3016 and reported 2 days Drilling Ahead @ 797' on 7/1/16.

Permalink Reply by Skip Peel - Mineral Consultant on July 8, 2016 at 14:35

Rapad #38 reported Drilling Ahead @ 4079', 7/8/16

Permalink Reply by Skip Peel - Mineral Consultant on July 15, 2016 at 14:46

Rapad #38 reported Drilling Ahead @ 7695', 7/15/16

Permalink Reply by Skip Peel - Mineral Consultant on July 26, 2016 at 10:46

Rapad #38 reported Drilling Ahead @ 12318', 7/22/16

Permalink Reply by Skip Peel - Mineral Consultant on August 1, 2016 at 16:37

Rapad #38 reported Drilling Ahead @ 12932', 7/29/16

Permalink Reply by Skip Peel - Mineral Consultant on September 13, 2016 at 1:43

Helis was issued Work Permit L#0569-16 on 8/31/16 to plugback to a shallower depth.  I am hearing that this was done in preparation for amending the permit to drill and drilling a lateral in the TMS.

Permalink Reply by Skip Peel - Mineral Consultant on September 20, 2016 at 10:30

Helis Oil abandons fracking project in St. Tammany Parish

By Robert Rhoden, NOLA.com | The Times-Picayune

on September 20, 2016 at 10:32 AM, updated September 20, 2016 at 12:29 PM

Helis Oil & Gas Co. is throwing in the towel on its controversial drilling operation in St. Tammany Parish. The company said Tuesday (Sept. 20) that after a lengthy review of geologic, engineering and other data from its exploratory well northeast of Mandeville, it will not proceed with a second phase involving the controversial hydraulic fracturing, or fracking process.

"Helis has determined that the prospect lacks appropriate commercial viability, so the company will not pursue the project any further," the company said in a statement. "Helis intends to permanently abandon the well and secure the site in accordance with regulatory requirements and its leases." 

St. Tammany Parish Councilman Jake Groby, who strongly opposed the drilling project, reacted to the decision, saying, "I'm having a great morning. I think it's very good news for the citizens of St. Tammany who were concerned about their water quality, their land quality and air quality.

"Helis could never guarantee that they would not have an industrial accident. This is an inherently dangerous business. "

Groby called on Helis and the Poitevent family, which owns the land, to replant trees to restore the approximately three-acre well pad to its previous natural state.

In a statement, Parish President Pat Brister said, "There were times fracking became a very emotional issue with many public meetings. Unfortunately, it cost the taxpayers several hundred thousand dollars in legal bills to confirm that the oil exploration permitting process is, and will continue to be, a state issue."

She thanked Helis Oil, calling the company "a responsible corporate citizen" during the permitting process and exploratory drilling. 

Tuesday's decision brought an abrupt end to 2 1/2 years of controversy over the project, including numerous court hearings and passionate public meetings that left some citizens in tears.

Many in St. Tammany opposed the project due to environmental concerns and fears that a successful oil well would lead to many more and the unwanted industrialization of the parish.

In its announcement, Helis said it has suspended the air, water quality and noise monitoring that it instituted before beginning work on the site. The results of that monitoring will still be available to the public through the Louisiana Office of Conservation.

Had the recent exploratory drilling shown more promise, Helis would now be working with regulating agencies, parish officials and contractors to move the project toward completion and production later this fall, the company said. At the inception of the project Helis estimated the potential for commercial success at 30 percent to 35 percent.

Helis President David Kerstein personally notified parish officials of the company's decision.  

"While we are disappointed the well was unsuccessful, exploratory projects such as this one involve a substantial risk of failure which we accept as part of our business," Kerstein said in the statement. "We can terminate this project knowing that we conducted our operations without a single complaint regarding noise, traffic or environmental impacts."