You beat me to posting, Ralph. This* is another article. I hope Rock Man weighs in on this development. I would like to know if the new tech to deal with the clay is hardware or software? Or maybe there really is no clay there--it was only assumed to be there and was not?!
(excerpt) "Although the area in question, Texas’ Reeves County, is heavily drilled, most producers are focused farther north. For years, it was assumed that the layers in Alpine High would be too full of clay, which impedes hydraulic fracturing, the process of blasting sand and water into brittle rock layers to make oil and gas flow out.
Prior explorers drilled more than 110 dry holes in the area. However, a team of explorers led by Steven Keenan, whom Apache hired from EOG in 2014, studied the geology and hydrocarbons in the region of the Alpine High acreage and concluded that it might have undiscovered potential.
“Every 10 years or so, there’s a so-called new discovery, and generally they confound the prevailing wisdom,” said Mr. Keenan, in an interview."
A few facts - companies have known about high oil in place content for the Woodford and Barnett in the Permian basin and this area specifically for years. But the Woodford and Barnett have essentially been "economic failures" in the Permian for various reasons (unlike areas where they work like in Oklahoma and DFW area).
Several operators (including Clayton Williams and I believe EOG) have drilling horizontals in this part of Reeves Co to test these sections (and especially the Barnett) with uneconomic success).
To say this is a discovery is press release "buzz" - this is a potential resource play that Apache feels may work out economically based on what they are seeing based on their work. Answer to what makes these zones economic is probably a matrix of landing zone and frac approach.
I wish Apache the best - this would be huge for them.
But I also hear a little bird on my shoulder saying "Remember the Cline Shale?"
I know - pessimistic attitude (or is it realistic?)
I tried to find production reports for the Apache wells in the chart you shared, even phoning the RRC. No luck. Did any of the Cline Shale wells match these on 24 hr IP?
Have to believe that APA has some concept on decline rates over time. These high 24 hour IP rates look great - but if there is a 90% decline in one year........................
Plus a concern about the down hole reservoir conditions - very rich (as to liquids) gas. If this is a retrograde condensate system, once pressure drops below bubble point, the liquids (condensate and NGl's) start dropping out in the reservoir and negatively impacting production rates and yields.
He said that several years ago Apache had announced the potential of large reserves in the Cline shale in the eastern portion of the Midland Basin.
“Apache made a splash (with that forecast) but didn’t have the opportunity to develop it before oil prices fell. That tells me it’s a higher-cost resource that hasn’t panned out — yet,” Ingham said.
“Assuming you can take what they say at face value -- and there’s no reason not to -- they’re a Permian operator out there on the frontier and they’ve bumped up their budget so they can go get more acreage. That tells you work can be done, companies can find a way to do business at these oil price levels,” he said.
Fresh perspective credited for Apache’s Permian find
"Other companies had discounted that shelf, believing that over millions of years it had sunk deep underground, where pressure and heat cracked the oil into natural gas and robbed the formation of the most valuable stuff. The shelf was later pushed back up to its current level, they concluded.
Alpine’s team, however, found evidence that the shelf never descended. And to them, that meant it still held a lot of crude."
I get frustrated reading articles by authors who don't either know or understand the facts about key O&G related issues.
The Alpine is a gas play - the test results that Apache has released prove that up. The historical test data from other operators proves that up. The geochem / thermal maturity data proves that up. This area has been "cooked" the point where oil prone organics have been converted to gas. There is associated condensate and NGL's associated with the gas so it is not "dry " gas - but it is a gas play.
With no very good pipeline infrastructure in place for most of the area.
This is NOT a crude oil play. Note the term "equivalent" when you see the numbers touting the volume of oil in place in this area - this is a conversion of gas to BOE (barrels of oil equivalent). And what conversion factor is being used? 6 to 1? 16 to 1?
Check out oil and gas and NGL prices and what it takes to make "x" cubic of feet of gas equivalent to one BO.
And Hydrocarbons in place do not equate to success - recovery factors and production decline rates is what will make this play work. As well as a good gas pipeline infrastructure with low take away costs. As well as good processing contracts to extract the NGL's (which are presently priced at single digit $$ per bbl) without charging high handling and processing costs.
I hope that this works for Apache - but it is not as simple as many people and writers what to believe.
The article leads me to believe that the reporter is repeating information he was given by Apache officials. I'm not saying there's not some hocus-pocus, mind you. The Fourth Estate is in shambles. Witness Trump's ascension.
Saudis See Oil-Freeze Deal Possible in November, Not This Week
From the article: "Saudi Arabia will suffer a fiscal deficit equal to 13.5 percent of gross domestic product this year, compared with one of less than 2.5 percent of GDP for Iran, the International Monetary Fund estimates. The IMF says the Saudis need oil close to $67 a barrel to square the books. For Iran, it’s lower, at $61.50. Brent crude, the global benchmark, fell below $46 a barrel in London on Tuesday" http://www.bloomberg.com/news/articles/2016-09-26/in-fight-over-oil...
I agree. Thanks AJ. And those who have stripper and low volume wells would love to see their wells come back online. As a layperson in this forum, that has to have an incredible impact on the margin of profitability and a dramatic economic impact on the price of some crude oil. (All comments are appreciated.)
You're welcome, Ralph. I will be on the watch for any updates on this new product. I saw an article on a 'new' Aquarius engine which is supposed to be dramatically more efficient.
John Christman, chief executive of Houston's Apache Corp., said this week that the company's top priority next year is the newly discovered Alpine High oilfield in West Texas...
"Foutch said the company learned that “the Cline is a little bit gassier and a little bit harder to drill.” Drilling and completion technologies have advanced significantly this decade, and Laredo hasn't written the Cline out as a desirable area for production. “We’re getting better at figuring out how to complete in the Cline,” he said, adding that Laredo will soon go back to its best Cline wells to test what it had learned."
From the article... "As consultant Morten Frisch tells me, drilling horizontal sidetracks from abandoned wells in the Permian Basin is yielding a 91 percent internal rate of return on a $7 million investment and delivering 1,500 barrels a day of crude. He predicts large production increases from vertical wells in previously produced areas in the Permian."