A good place to post Cline Shale (now also known as Wolfcamp D and Lower Wolfcamp) news to keep us all informed.
Occidental Petroleum's (OXY) CEO Steve Chazen on Q2 2014 Results - Earnings Call Transcript
...We’ve been operating in the Permian Basin for more than 30 years and have considerable knowledge of the depositional history of geology.
With that base knowledge we have been and are continuing to make significant investments to assess the rock and fluid properties in our own conventional reservoirs across our acreage. This is helping us to develop a better understanding of the key geologic parameters that drive productivity, such as porosity, saturation, brittleness, total organic content, mineral and geochemical composition, rock and fluid compatibility, fracture distribution and stress regimes.
Our Permian resources and exploitation teams are applying this appraisal work to construct calibrated Petro-physical models to characterize perspective benches and target landing zones within each bench.
As a result of our work today, we have now identified over 7,000 drilling locations across our 2 million net perspective acres. This is an increase more than 2,500 since the beginning of this year. We expect to continue to grow the number of locations through our successful exploitation efforts....
Can someone translate the answer (below) as it relates to potential and drilling opportunities specific to Midland, Martin, and Howard counties? Where are the Cline Shale and other horizontal wells' long term production numbers and (revised?) EURs which seem to be absent from the conversation?
Q: "...and how are you looking at potential and drilling opportunities in your central Midland Basin position in Midland, Martin and Howard Counties?
Well, I mean what we laid out, we’re pretty much in line. We’ve run six to seven rigs at Barnhard. We’ve been taking those learnings and applying them. We’ve now got 18 rigs running horizontally in the Midland Basin. So we’re starting to announce some results in our Scottish rights and our pile area and so forth. So we’re taking those learnings that we’ve had in Barnhard.
In general, though, we’re still working. I mean, when you look at what we’re doing right now on the completion side, we’re looking at more clusters, more stages, more sand loading per linear foot, all of those things and I think it’s helping wells holdup longer and so forth. So we continue to take those learnings that we’ve had and progress them into other areas as well as into the Eagle Ford and those things.
Craig Wascom said:
Apache's (APA) CEO Steven Farris on Q2 2014 Results - Earnings Call Transcript
...And one additional note regarding our North American onshore portfolio, over the past year, we deepened our understanding of our North American properties. We’ve elevated our capabilities in advanced emerging plays and in that regard this fall we intend to hold an update presentation on North American onshore highlighting our $1.7 million net acres in the Permian basin...
http://seekingalpha.com/article/2368575-apaches-apa-ceo-steven-farr...
JC gave a good political answer here - and other operators will do the same. It is true that operators are still learning about the variabilties of the various targets across the Basin as well as how to drill and frac it most efficiently so as to optimize EUR's and ROR. And the learning curve is on a steep upgrade with no end in signt IMO. This is a very complicated situation with lots of moving parts and MASSIVE variability.
As for EUR's for drilled well in certain areas, I would recommend diving into the various investor presentations and reports that abound for the operators in the Permian. Lots of EUR info as per horizon in those publications.
As for Howard Co specifically, the "play" is isolated in the western part of county north of Interstate 20. Element / Tall City have drilled some excellent horizontals NW of Big Spring in the Upper Wolfcamp (A&B) with max EUR of up to 1 million BOE per well. But lots of variability as to their results so far - still "learning the play".
AJ said:
Can someone translate the answer (below) as it relates to potential and drilling opportunities specific to Midland, Martin, and Howard counties? Where are the Cline Shale and other horizontal wells' long term production numbers and (revised?) EURs which seem to be absent from the conversation?
Q: "...and how are you looking at potential and drilling opportunities in your central Midland Basin position in Midland, Martin and Howard Counties?
Well, I mean what we laid out, we’re pretty much in line. We’ve run six to seven rigs at Barnhard. We’ve been taking those learnings and applying them. We’ve now got 18 rigs running horizontally in the Midland Basin. So we’re starting to announce some results in our Scottish rights and our pile area and so forth. So we’re taking those learnings that we’ve had in Barnhard.
In general, though, we’re still working. I mean, when you look at what we’re doing right now on the completion side, we’re looking at more clusters, more stages, more sand loading per linear foot, all of those things and I think it’s helping wells holdup longer and so forth. So we continue to take those learnings that we’ve had and progress them into other areas as well as into the Eagle Ford and those things.
Craig Wascom said:Apache's (APA) CEO Steven Farris on Q2 2014 Results - Earnings Call Transcript
...And one additional note regarding our North American onshore portfolio, over the past year, we deepened our understanding of our North American properties. We’ve elevated our capabilities in advanced emerging plays and in that regard this fall we intend to hold an update presentation on North American onshore highlighting our $1.7 million net acres in the Permian basin...
http://seekingalpha.com/article/2368575-apaches-apa-ceo-steven-farr...
Rock man Tall City has also drilled around 3 wells in the Borden County with about 8 more drilling permits. Like Howard County they are targeting the Spraberry Trend with these horizontals. What are your feelings on this program by Tall City?
Talk City program in Borden County is playing Upper Wolfcamp - at least for now. Different animal than the Element /TC effort in Howard Co for a variety of reasons including impact of Horseshoe Still on overlying Wolfcamp quality plus perceived decrease in thermal maturity as one moves north. Will be interesting to see their results. Other operator (Chesapeake, Apache, red Willow) have not done very well in southern Borden so far. Northern Borden has seen success by SM and others chasing deeper Mississippian targets.
I believe the conference calls and presentations do not reveal enough material data. It seems as if they have a confirmation bias [duh] which precludes releasing information on marginal and worse wells. "X" many wells were drilled, and the results of 1/3 x are mentioned as encouraging with 24hr IPs of y without reporting the other 2/3 x 24hr IPs. What good is a 1,000,000 EUR well if the time frame to produce is 100 years?
Rock Man said:
JC gave a good political answer here - and other operators will do the same. It is true that operators are still learning about the variabilties of the various targets across the Basin as well as how to drill and frac it most efficiently so as to optimize EUR's and ROR. And the learning curve is on a steep upgrade with no end in signt IMO. This is a very complicated situation with lots of moving parts and MASSIVE variability.
As for EUR's for drilled well in certain areas, I would recommend diving into the various investor presentations and reports that abound for the operators in the Permian. Lots of EUR info as per horizon in those publications.
As for Howard Co specifically, the "play" is isolated in the western part of county north of Interstate 20. Element / Tall City have drilled some excellent horizontals NW of Big Spring in the Upper Wolfcamp (A&B) with max EUR of up to 1 million BOE per well. But lots of variability as to their results so far - still "learning the play".
Such is the way public companies need to report info when a analysts and investors are hanging in every word. The million boe Eur is tied to economic limit about 30 years out.
Ndhis is why people need to do their own research and look deep into the details - an approach I have continually advocated. Companies will not report bad news- we need to find it and not believe 100% of what is published as so many people do. To find the facts and details takes a lot if work-and many individuals either don’t have the time or desire to do this
Energen's (EGN) CEO on Q2 2014 Results - Earnings Call Transcript
...You mentioned in the press release that you and in your remarks you are testing multiple sections of the Cline well in Glasscock County. Can you just give a little bit of color as to what testing multiple sections entails in this case?James McManus - Chairman and CEO
Well, it just means that the Cline interval is extremely thick and we're testing a lot of pieces of that thick interval, we're not just -- we didn't just land the well in one particular interval within the Cline. That's what that means....
Looks like Energen is testing Cline intervals in vertical (perf/frac/flow back a produce/set plug to move to next zone up hole/repeat process. Will probably use these results to fund best zone in which to lay horizontal. Underscores fact that it is very difficult to grow a frac much distance upward or downward from horizontal target zone.
Does Energen consider Sterling county outside of the normal Cline play? If so, that seems like a fairly dramatic revelation. Listening to the actual recording of the conference call, I have corrected some of the Oatman-McManus exchange below. At this link http://ir.energen.com/phoenix.zhtml?c=94826&p=irol-EventDetails... , click on the "click here for webcast" under "Webcast Presentation" to listen. Oatman's question begins at 48:15.
http://seekingalpha.com/article/2371195-energens-egn-ceo-on-q2-2014...
"We currently are testing multiple sections of a Cline well drilled on the Eastern Shelf in Glasscock County"
Ryan Oatman - SunTrust
Very good. And then one final one for me, and realizing it is early can you speak to what you are seeing on the eastern shelf with your Cline tests there and remind us of your acreage position over there?
James McManus - Chairman and CEO
Yes we can, we have got nine contiguous sections over there so nine times 640 roughly… 5000 acres... I would say Ryan just to remind everybody that is sort of outside what is the normal Cline play. We had leases expiring up there and so we went up there tested, but we don’t have anything to share with you at this point.
It is a very sad state of affairs if professional equity analysts do not have the wherewithal/gumption to ask tough questions in search of material information to share with readers. Pump and dump? Soma? For the record, I am not remunerated for posting in this forum.
Rock Man said:
Ndhis is why people need to do their own research and look deep into the details - an approach I have continually advocated.
Companies will not report bad news- we need to find it and not believe 100% of what is published as so many people do.
To find the facts and details takes a lot if work-and many individuals either don't have the time or desire to do this
I have seen many occasions when analysts ask the questions that need to be asked- and answers are often ultra nebulous or avoided or “we are not ready to talk about that right now”
By the way, apologize for typos. Working off cell phone key pad leads to miss strokes
Although Sterling Co was reported as part of the "early" Cline Shale play area, subsequent drilling put this county in a low performing area.
I have to give Energen credit for what they are doing - instead of drilling horizontals to test the Cline on their acreage, they appear to be doing a vertical well where they are testing multiple Cline intervals individually to determine / evaluate the potential for each zone. And I figure that they are doing a lot of technical analysis (core, hi tech logs, frac / geomechanical data, etcc.) as part of this process.
By spending much less than one horizontal well (drilled and completed), Energen will know if their 5000 acres is viable to pursue as a Cline Shale program. If it proves successful, they are looking at a minimum of 36-4- horizontals (and possibly double that if down spacing is viable).
And if they deem the Cline not prospective for Hz drilling, they are out the $5-$6 Million spent on this vertical well (plus the cost of the acreage). Odds are they will find some lower quality Wolfcamp and Spraberry as part of this process and can chose to either drill it themselves or turn the block to another party (farmout, sell asset, etc.).
Kudos to Energen for this approach - and talking about it during Q&A session.
AJ said:
Does Energen consider Sterling county outside of the normal Cline play? If so, that seems like a fairly dramatic revelation. Listening to the actual recording of the conference call, I have corrected some of the Oatman-McManus exchange below. At this link http://ir.energen.com/phoenix.zhtml?c=94826&p=irol-EventDetails... , click on the "click here for webcast" under "Webcast Presentation" to listen. Oatman's question begins at 48:15.
http://seekingalpha.com/article/2371195-energens-egn-ceo-on-q2-2014...
"We currently are testing multiple sections of a Cline well drilled on the Eastern Shelf in Glasscock County"
Ryan Oatman - SunTrust
Very good. And then one final one for me, and realizing it is early can you speak to what you are seeing on the eastern shelf with your Cline tests there and remind us of your acreage position over there?
James McManus - Chairman and CEO
Yes we can, we have got nine contiguous sections over there so nine times 640 roughly… 5000 acres... I would say Ryan just to remind everybody that is sort of outside what is the normal Cline play. We had leases expiring up there and so we went up there tested, but we don’t have anything to share with you at this point.
I recently learned of another company with plans for doing something like this. I had assumed that all companies evaluated core samples and the like from vertical wells before attempting horizontals. I imagine real time, in-ground experimentation and sampling is superior to historic and theoretical. How will Energen know a mediocre test well is not a mile removed from a Grant Canyon field? Did Energen choose to target average section instead of sweet spot?
Rock Man said:
Although Sterling Co was reported as part of the "early" Cline Shale play area, subsequent drilling put this county in a low performing area.
I have to give Energen credit for what they are doing - instead of drilling horizontals to test the Cline on their acreage, they appear to be doing a vertical well where they are testing multiple Cline intervals individually to determine / evaluate the potential for each zone. And I figure that they are doing a lot of technical analysis (core, hi tech logs, frac / geomechanical data, etcc.) as part of this process.
By spending much less than one horizontal well (drilled and completed), Energen will know if their 5000 acres is viable to pursue as a Cline Shale program. If it proves successful, they are looking at a minimum of 36-4- horizontals (and possibly double that if down spacing is viable).
And if they deem the Cline not prospective for Hz drilling, they are out the $5-$6 Million spent on this vertical well (plus the cost of the acreage). Odds are they will find some lower quality Wolfcamp and Spraberry as part of this process and can chose to either drill it themselves or turn the block to another party (farmout, sell asset, etc.).
Kudos to Energen for this approach - and talking about it during Q&A session.
AJ said:Does Energen consider Sterling county outside of the normal Cline play? If so, that seems like a fairly dramatic revelation. Listening to the actual recording of the conference call, I have corrected some of the Oatman-McManus exchange below. At this link http://ir.energen.com/phoenix.zhtml?c=94826&p=irol-EventDetails... , click on the "click here for webcast" under "Webcast Presentation" to listen. Oatman's question begins at 48:15.
http://seekingalpha.com/article/2371195-energens-egn-ceo-on-q2-2014...
"We currently are testing multiple sections of a Cline well drilled on the Eastern Shelf in Glasscock County"
Ryan Oatman - SunTrust
Very good. And then one final one for me, and realizing it is early can you speak to what you are seeing on the eastern shelf with your Cline tests there and remind us of your acreage position over there?
James McManus - Chairman and CEO
Yes we can, we have got nine contiguous sections over there so nine times 640 roughly… 5000 acres... I would say Ryan just to remind everybody that is sort of outside what is the normal Cline play. We had leases expiring up there and so we went up there tested, but we don’t have anything to share with you at this point.
Obviously don’t know what Energen is thinking but am sure they have used all historical vertical control to map key interval parameters like porosity and saturation. And are then taking core info to calibrate /adjust logs to core to get “true” response. Then tying vertical test results by zone to their mapping to determine where best sections are located- if anywhere. Key is detailed integration of loss, tests and core results. Which most companies should do in one way or another. Just rare to hear company talking about spending millions on wells that will never work economically. Investors or analysts could take this as a negative.
The Cline may work on investors, analysts, even corporate executives like some sort of Jedi mind trick. I have seen several videos and webpages which focus on actual drilling, but I have not seen anything similar on the particulars of finding a location to drill. To me, this would interesting reading.
I an not familiar with any site that gets into the process to evaluate and optimize plays like the Cline. This and other forums have touched on all the factors that need to be addressed as to this issue. Time, money, data, integration is the key- being done by experts who understand the key issues .