Halliburton Unveils Latest Advancement in Horizontal Completions

- Halliburton Unveils Latest Advancement in Horizontal Completions

Monday, August 15, 2011
Halliburton Co.

Halliburton has deployed the most recent addition to its horizontal completion portfolio. The new RapidFrac™ completion system allows operators to set new standards for fracture completion efficiency and post-fracture production.

This innovative horizontal sliding sleeve completion system is a differentiating technology that allows for enhanced reservoir contact. In a changing landscape where operators are drilling longer laterals that require increasingly complex completions, the RapidFrac system delivers several unique differences from the "plug and perforate" system and other similar techniques.

The RapidFrac system uses a metering process that enables a single ball to open multiple sleeves isolated within an interval by swellable packers. Each RapidFrac sleeve can be tailored to specific fracture requirements along a horizontal wellbore so as to enhance post-frack production. Up to 90 sleeves can be incorporated into any one horizontal completion, ensuring maximized stimulated reservoir volume. By facilitating continuous pumping, the RapidFrac system reduces stimulation cycle time from days to hours and reduces the volume of water consumed.

"The RapidFrac system allows operators to optimize completion design, reduce operational risk, and materially reduce the time to first hydrocarbons," said Marc Edwards, senior vice president, Halliburton Completion and Production Division. "This technology also enables Halliburton to increase the utilization of its unconventional asset fleet."

Although initial system deployments have occurred in the Bakken Shale with Brigham Exploration and Williams Production Company, this technology has application for shale developments on a global basis.

"Brigham's success in the Bakken has been driven by its early adoption of game-changing technologies," said Lance Langford, executive vice president, Brigham Exploration. "We believe our industry is in the very early stage of developing tools and techniques to optimally exploit the Bakken and working with Halliburton to successfully launch its RapidFrac system is an example of what can be done in this world class resource."

In order to prove this technology with Halliburton, Williams drilled two comparable offset wells. The first was completed with the traditional "plug and perforate" method and the second utilized the RapidFrac system.

"The new RapidFrac completion system delivered significant performance benefits," said William Stenzel, vice president, Williams Williston. "(The) RapidFrac (system) enabled us to complete the well in less than half the time of a "plug and perforate" system, while delivering a stronger early time production performance. This is a major step forward in completion efficiency."

Halliburton continues to develop technical innovations designed to address the efficiency and effectiveness of unconventional hydrocarbon development, while meeting the highest environmental and safety standards.

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American Petro-Hunter Plans 11 Horizontal Wells for Okla. Project

- American Petro-Hunter Plans 11 Horizontal Wells for Okla. Project

Monday, July 18, 2011
American Petro-Hunter

American Petro-Hunter is pleased to announce updated plans regarding the Company's continued participation in a proposed field development horizontal drilling program of the Mississippi formation at the North Oklahoma Project.

Based on the commercial success of the recent NOM-1H horizontal well, the Company and working interest partners have determined that the development plan for this newly defined Mississippi oil and gas reservoir can accommodate the drilling of a minimum of 11 horizontal wells.

The drilling schedule, which includes direct offsets to the producing NOM-1H, will involve the drilling of approximately one horizontal Mississippi well every 30 to 60 days with plans to commence the program in early September. The schedule allows for a predictable time frame to drill, complete and put in requisite production facilities for both oil sales plus a gas line hook up every other month.

This aggressive drilling schedule signifies there will be well drilling, completion and potential production activity on the Ripley project leases for the remainder of 2011 and throughout 2012. In total, 12 production wells are targeted for the full development of the project.

The operator has further advised the Company that the same group of professional oil and gas contractors and engineers will be involved in all aspects of the engineering design, vertical and directional drilling of the proposed program as the group performed well above expectations on the drilling and completion of the NOM-1H well.

Company President Robert McIntosh states, "We couldn't be more pleased with the proposed engineering plans to drill 11 more horizontal wells on the Ripley leases. Our commitment to this project is indicative of how this area has become a core asset and means we aim to be very busy drilling wells in this area for the foreseeable future. The continued success of this project is poised to dictate our growth and will prove instrumental in meeting our long range production targets."

About American Petro-Hunter, Inc. (OTC.BB:AAPH - News)
The Company is a goal-oriented exploration and production (E&P) Company aiming to become an intermediate level oil and gas producer within 12 months. The Company is in production at the Poston Project in Trego County, Kansas and the North Oklahoma Project. With the achievable target of becoming a 1,000 BOE producer as our goal, American Petro-Hunter is actively on the "hunt" for domestic petroleum assets. Visit us at: www.americanpetrohunter.com

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Laredo Finalizes Broad Oak Acquisition

- Laredo Finalizes Broad Oak Acquisition

Wednesday, July 06, 2011
Laredo Petroleum Inc.

Laredo Petroleum has now completed the previously announced acquisition of Broad Oak.

The aggregate consideration paid was approximately $1 billion and consisted of approximately 2/3 of newly issued units of Laredo equity and 1/3 cash. The cash portion of the transaction was funded under Laredo's amended and restated $1 billion bank credit facility led by Wells Fargo Securities, LLC, BofA Merrill Lynch and J.P. Morgan Securities LLC, as joint lead arrangers. The amended and restated bank credit facility has an initial borrowing base of $650 million, of which $500 million was borrowed and outstanding following the closing of the acquisition.

This acquisition increases Laredo's size and positions it for continued growth in the oil-rich Permian Basin and the liquids-rich Granite Wash play. On a pro forma basis giving effect to the acquisition, Laredo has:

• total proved reserves of 840 Bcfe, consisting of 49 million barrels of crude oil and 547 Bcf of natural gas, as of March 31, 2011;
• average daily combined production of 130 MMcfe for the three months ended March 31, 2011, consisting of 40% crude oil and 60% natural gas plus associated natural gas liquids;
• a land position consisting of approximately 489,000 gross acres (338,000 net acres); and
• a total of 12 operated drilling rigs running, with eight drilling vertical wells and four drilling horizontal wells. Ten of these rigs are working in the Permian Basin and two in the Granite Wash play located in the Anadarko Basin.

The Broad Oak properties are concentrated on a contiguous land position located in the Permian Basin of West Texas primarily in Reagan County. This acreage is immediately south of, and on trend with Laredo's existing Permian Basin properties in Howard and Glasscock Counties. The combined acreage position in the Permian Basin consists of approximately 166,000 gross acres (126,000 net acres).

Randy Foutch, Laredo's Founder, Chairman and CEO said, "We welcome the Broad Oak employees to the Laredo team and intend to continue the active development and exploration of the combined company's attractive property base."

Tudor, Pickering, Holt & Co. Securities, Inc. served as financial advisor to Laredo. J.P. Morgan Securities LLC served as financial advisor to Broad Oak.

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Property, Mineral Rights In Conflict

- Property, Mineral Rights In Conflict

Wednesday, July 06, 2011
Knight Ridder/Tribune Business News
by Ry Rivard, Charleston Daily Mail, W.Va.

In a case that may give West Virginia landowners a stronger bargaining chip in dealings with natural gas companies, a Marion County man is suing two of the state's largest gas producers to pay up or get off his land.

Richard Cain argues that gas producers don't have a right to put large Marcellus shale wells on his land in order to get at gas on his neighbors' property. If Cain prevails, it could become more difficult and expensive for gas companies to place multi-acre Marcellus well pads.

David McMahon, a lawyer who co-founded the West Virginia Surface Owners' Rights Organization, filed the lawsuit last week in Marion County Circuit Court. Cain is suing XTO Energy, a division of Exxon Mobil, and Glenville-based Waco Oil and Gas.

The lawsuit argues XTO can't take over up to 36 acres of Cain's 105-acre property just to put in Marcellus shale wells. The plans make Cain, a 61-year-old farmer and crane operator, "heart sick," McMahon said in a telephone interview last week.

Cain bought the land in 1989 to eventually give to his children. But he only owns the top of the land -- more than a century ago, the mineral rights had been sold off.

The law gives mineral owners the right to come on a surface owner's land to get at coal, gas or oil beneath. Cain doesn't dispute that companies can use his land to get gas from beneath his 105 acres or even from the other 33 acres near him that were part of an original 138-acre tract.

But Cain argues the law doesn't give XTO or Waco the right to use his land as staging area for several large well pads that will drain gas from hundreds and hundreds of acres around his property that the companies have the mineral rights to.

The companies "do not have any rights at all to use his surface to drill horizontal wells to, or to explore for or produce gas from, any neighboring mineral tracts," the lawsuit reads.

A spokesman for XTO said the company does not comment on pending litigation. Waco did not return a phone call Friday afternoon seeking comment.

Cain's case arises mostly because of a change in technologies. Traditionally, drillers were using vertical gas wells with a relatively small footprint. These vertical wells were like straws and didn't draw gas from very far away.

But now drillers are building pads with several acre footprints and wells that run horizontally underground for nearly a mile apiece. Cain's case is testing whether these horizontal wells should be treated differently in the eyes of the law.

According to the lawsuit, XTO has received approval for one 12-acre well pad on the southwest corner of Cain's land. From it, at least three and up to six horizontal wells will be drilled underground.

XTO plans to put two more pads on his land. If the two pads disturb the same 12 acres as the first one, nearly 40 percent of Cain's land will have been taken without his permission.

None of the underground wells on the first well pad will drain much of Cain's gas, according to the lawsuit. Instead, the three wells will travel underground away from the corner of his land for 5,500 feet, 4,600 feet and 3,300 feet.

Even though XTO may be getting little gas from Cain's property, there could be advantages to its putting wells there. Companies drill down nearly a mile before they turn horizontally through the shale formation from where they get gas. These vertical legs also need room, though, because they slope a bit before become horizontal and run through the shale -- so moving the well pad on the surface even slightly can hurt companies by giving them less access to the profitable gas.

McMahon alleges XTO is shifting the burden of the multi-acre well pads to Cain's property.

If Cain prevails, companies that don't own surface rights will have to spend more time negotiating.

Plus, there's the cost. Under state law, the companies have to pay surface owners for lost income, expenses and damages. But McMahon said the formula in law isn't enough for the loss Cain faces.

"I think that the value shouldn't just be what it's worth to the seller, but what it's worth to the buyer, who is the driller in this case, and I think it's $25,000 a well in this case to the buyer," McMahon said.

The lawsuit also gives a look at the dealings between reluctant surface owners and companies eager to drill.

XTO began efforts to use Cain's land in June 2010, according to the lawsuit.

Cain "delayed as much as he could" to see if lawmakers would pass new rules in Charleston that could clarify or even add to his rights. They didn't.

An XTO agent didn't give Cain any say on where the company would locate its wells or its access roads. But, according to the lawsuit, an agent suggested XTO could pay Cain several thousand dollars for each pad -- the highest offer being $12,000.

An XTO agent also told Cain, "We will leave you a little," the lawsuit said.

On April 5 of this year, Cain sent XTO a letter that read, "You do not have permission to enter this property" to develop horizontal wells that would primarily take his neighbor's gas.

On April 14, XTO replied that they didn't need his permission.

When Cain went to his land April 17, he found part of his property had been cleared and his timber had been cut down.

Copyright (c) 2011, Charleston Daily Mail, W.Va.

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Oilex Makes Progress at Cambay Well

- Oilex Makes Progress at Cambay Well

Wednesday, June 22, 2011
Oilex Ltd.

Oilex advised that the Cambay-76H horizontal well was directionally drilled as planned to casing point at 1,595 meters.

• Report date: June 21, 2011
• Status: Preparing to drill 8 ½" hole
• Past Week's Operations: 
  • Drilled 12 ¼" hole from 601 meters to 1,595 meters
  • Set 9 ⅝" casing to 1,594 meters
  • Tested BOP
• Objectives: Cambay Eocene "tight" reservoir Y Zone
• Kick off point for deviation: Approximately 1,100 meters
• Planned Total Depth (TD): Approximately 2,885 meters
• Days to TD: Approximately 35 days on a trouble free basis

Cambay Eocene Tight Reservoirs

The Company is making progress in unlocking the potential of the Cambay "tight" Eocene reservoirs that extend across the 161 km2 Cambay Production Sharing Contract ("PSC") area in onshore Gujarat, India. The Company intends to evaluate and exploit these reservoirs using horizontal drilling and fracture stimulation technology that has been developed and proven in North America.

The Cambay-76H "proof of concept" horizontal well will evaluate the production potential of the Y Zone interval of these "tight" reservoirs. An 8 stage fracture stimulation program will be conducted and after well clean-up, it is anticipated that a long term production test will be performed to determine flow rates, quality of hydrocarbons and commercial viability.

The participating interests in the Cambay PSC are:

• Oilex Ltd (Operator) 30%
• Oilex NL Holdings (India) Limited 15%
• Gujarat State Petroleum Corporation Ltd 55%

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IHS: Niobrara Resource Potential Not Yet Proven

IHS: Niobrara Resource Potential Not Yet Proven

Friday, April 29, 2011
Rigzone Staff

Despite enthusiasm by exploration and production (E&P) companies and investors, successful development efforts to unlock the Niobrara horizontal oil play's resource potential has been limited, and more time is needed to further delineate its true potential as a resource play, according to a special report by IHS.

IHS studied the performance of a few modern horizontal oil wells present in the Niobrara and compared initial production rates of these wells against initial production rates for median-producing oil wells in the core of the Bakken/Three Forks shale play.

According to IHS, the median Bakken horizontal well completed since 2009 in the play's core averaged about 230 b/d of oil in its six month online. Two modern Niobrara horizontal wells matched or exceeded that oil production level, with the remaining 10 wells producing between 10 b/d and 190 b/d. In their sixth month, five of these wells produced 70 b/d of oil or less; three produced between 100 b/d and 125 b/d; and the remaining two wells produced approximately 185 b/d.

While enthusiasm for the Niobrara is likely tied to the success of the Bakken/Three Forks play, study author and IHS principal energy equity analyst Sven Del Pozzo noted that definitive conclusions of the Niobrara potential can't be made at this early stage, since fewer than 20 modern horizontal Niobrara wells in the DJ and North Park basins have 365 days of IHS production history, "and just 10 of those have a meaningful oil cut."

The author said he doesn't necessarily disagree with the expectations of E&P companies that experience will enhance both well performance and predictability in the Niobrara. However, Del Pozzo said those who have cited the Niobrara play's best wells as indicative of future results are being a bit premature due the variability and lack of production data.

"The Niobrara is situated at various depths and has diverse rock properties as it spans multiple basins, making it very risky to generalize about its prospectivity at this stage," Del Pozzo said. In comparison, the Bakken's production is predictable over a wide area, compared with the Niobrara, where well performance still varies considerably, even in the same field.

The Niobrara play extends from Wyoming and Colorado into Nebraska and Kansas.

Horizontal Drilling Boosts 2010 Oil Production

Horizontal drilling activity in the Bakken and other U.S. oil shale formations helped boost U.S. oil production. The U.S. Energy Information Administration (EIA) reported this week that U.S. oil production grew in 2009 and 2010 after experiencing declines in all but one year from 1986 to 2008.

While the 2009 production increase resulted from deepwater Gulf of Mexico activity, EIA attributed the 2010 growth to oil shale drilling. "Operators are combining horizontal wells and hydraulic fracturing – the same technologies used to significantly boost shale gas production – to do the same for oil," EIA said.

Total oil production in North Dakota has approximately tripled since 2005 thanks to development of the Bakken play, which extends into Montana and parts of Canada. North Dakota Bakken production has increased from less than 3,000 b/d in 2005 to over 230,000 b/d in 2010, and the Bakken's share of North Dakota oil production rose from about three percent to about 75 percent during the same period of time.

Shale plays known primarily for gas production also are seeing an acceleration of oil-focused drilling as strong oil prices has prompted producers to switch their focus from shale gas to shale oil. In Texas, oil production from the Barnett shale play has more than tripled from 2005 to 2010, while Woodford shale oil production in Oklahoma passed the 4,000 b/d mark in 2010, up 42 percent from 2009 and nearly three times 2008 volumes.

The Eagle Ford oil shale play in Texas, which had negligible production in 2005, approached 30,000 b/d in 2010. Oil production from Appalachia's Marcellus shale more than doubled in 2010 from a year earlier and has grown nearly thirteen-fold since 2007.

The Baker Hughes rig count currently shows more active oil-directed rigs than gas-directed rigs. Natural gas rigs generally accounted for between 80 percent and 90 percent of the total weekly rig count during most of the 2000s. However, the number of rigs targeting oil deposits climbing began climbing significantly in mid-2009.

The importance of horizontal drilling to increasing oil production is also underscored by the Baker Hughes rig count data, EIA noted. Horizontal rigs comprised less than one-third of oil-directed rigs in September 2008; since then, the number of horizontal oil rigs has tripled, increasing that share to about 46 percent.

The increase in crude oil prices relative to gas prices is one factor responsible for the shift towards oil-focused drilling. The crude oil-to-natural gas price ratio, which through mid-2009 averaged over eight from 2000 through mid-2009, has since risen considerably. EIA noted that, when the Brent crude spot price in dollars per barrel is divided by the Henry Hub spot price of gas in dollars per MMBtu, oil is five times more valuable than gas on an energy-equivalent basis.

Controversial 'Horizontal Fracking' Remains Legal in Idaho

Controversial 'Horizontal Fracking' Remains Legal in Idaho

Wednesday, April 20, 2011
Knight Ridder/Tribune Business News
by Rocky Barker, The Idaho Statesman, Boise

Though the only natural gas drilling company active in Idaho today has no plans to employ a method blamed around the country for polluting drinking water, industry officials say other companies could one day.

That was enough to keep Gov. Butch Otter and the other state elected officials who make up the Idaho Oil and Gas Conservation Commission from banning the practice Tuesday.

Bridge Resources, the Canadian-based exploratory company that has discovered natural gas in Payette County, said it only will use a "mini-fracking" procedure to stimulate flows of some of its wells.

But David Hawk, representing Snake River Oil and Gas, a subsidiary of Weiser-Brown, another exploration company, pointed to the Chainman Shale formation in Nevada, which has already gained interest from oil and gas explorers and may extend into Idaho.

"People are looking at southern Idaho," Hawk said. "I'd hate to forestall anything."

The commission approved temporary rules Tuesday that allow Bridge Resources to become the first natural gas driller in the state.

Idaho Conservation League Program Director Justin Hayes offered several amendments he said would protect groundwater. One would prohibit horizontal fracking, where fluids are pumped into shale formations at high pressure to allow natural gas to permeate through for recovery.

"Let's just keep those doors closed," Hayes said.

Bridge would inject only vertically, at high pressure, a mixture of gel and sand into the sandstone formation where the company has found gas to clean out the reservoir near the well bore. This process props open fractures and entices gas to flow more freely.

Hayes wanted drillers to ensure their liquids were not carcinogenic and were not a threat to children. Kim Parsons, Bridge Resources' explorations manager, said the rules as written and the company's own practices will ensure its very limited fracking poses no threat to groundwater.

An impermeable shale formation lies between the drill head area, where the fracking will take place thousands of feet below the surface, and the groundwater closer to the surface.

Parsons said other industries on the surface -- such as agriculture -- use far more dangerous compounds that have far more opportunities to leach into the groundwater.

"We invite the rest of industry to come up to our level of groundwater protection," Parsons said.

The commission, made up of Gov. Butch Otter, Secretary of State Ben Ysursa, Attorney General Lawrence Wasden, state schools chief Tom Luna and State Controller Donna Jones, voted unanimously for the temporary fracking rules. Over the summer, the Idaho Department of Lands will hold a series of meetings to develop permanent rules.

Bridge Resources and its partner, Paramax Resources Ltd., both of Canada, have drilled 11 wells in Payette County. Three of the 11 wells can produce at economic levels naturally. Four require stimulation through fracking, officials said. The other four were dry.

Bridge officials said they could go into production before the end of 2011. That could mean money for schools from state land royalties and for other programs from state severance taxes.

PetroChina Drills China's 1st HZ Shale Gas Well

PetroChina Drills China's 1st HZ Shale Gas Well

Thursday, March 31, 2011
Dow Jones Newswires

by  Jing Yang

PetroChina completed the drilling of China's first horizontal shale gas well last week in Sichuan province, parent China National Petroleum Corp. said Thursday in its in-house newsletter.

Horizontal shale gas wells are more productive and have proven to be more commercially viable, having made a marked contribution to the success of shale gas development in the U.S., industry officials said.

China is at an early stage in its cracking of shale gas, trapped in relatively impermeable rock, but it hopes to unlock its massive shale gas reserves to meet robust domestic demand for the cleaner-burning fuel.

The International Energy Agency estimates that China has reserves of 26 trillion cubic meters of shale gas, which it hasn't been able to access due to a lack of technical expertise.
China's Ministry of Land and Resources has identified 20 potentially shale-gas-rich blocks in the provinces of Sichuan and Guizhou and the city of Chonqing, the state-controlled China Energy News reported earlier this week.

Reef Reaches TD at Ausable Well

Reef Reaches TD at Ausable Well

Thursday, March 31, 2011
Reef Resources Ltd.

Reef Resources reported that drilling of its Ausable # 5 well reached total depth of 615 meters on March 29. A total of 4 cores were taken over a depth of 32 meters with overall good recoveries. Oil staining was observed on the core sample which is currently being analyzed with results to be released in the near future. Data from the core samples will provide information on cap rock integrity and will be utilized, in addition to existing 3D seismic data, to pinpoint further drilling targets for future horizontal wells in the Ausable pinnacle reef.

The Ausable # 5 wellbore is being logged to identify the intersected hydrocarbon zones in the Ausable reef at this location. Results will be analyzed and released as soon as it is available.

The Ausable reef is currently on production and is generating revenue from the initial Enhanced Oil Recovery Natural Gas Recycling program which commenced in 4th quarter 2010.

Executive Director of Solo, Neil Ritson commented, "The presence of oil on the cores is considerable encouragement that we will be able to commercially produce this well while we awaiting the further planned development of the EOR scheme by Reef later this year."

American Petro-Hunter Acquires Acreage in Ok.

American Petro-Hunter Acquires Acreage in Ok.

Friday, March 25, 2011
American Petro-Hunter Inc.

American Petro-Hunter has acquired a majority working interest in an additional 2,000 acres of lands located in Payne County, Oklahoma. The acreage augments the Company's holdings at the North Oklahoma Project to 3,400 total gross acres.

With this recent acquisition, the Company has designated the new lands as the "Ripley Prospect" and the original lands as the "Yale Prospect," with both areas held as regional components of the North Oklahoma Project. The newly acquired Ripley acreage is located in a key area of an emerging horizontal drilling play where over 100 foot thick sections of Mississippi Formation are currently being aggressively exploited by regional players deploying laterally drilled, horizontal wells.

Surrounding the Ripley Prospect, numerous lease holdings are under development by Tulsa-based Calyx Energy, a private company. To date, Calyx has drilled 3 horizontal wells on leases within a mile and a quarter (1¼ mile) south of the Ripley block and, of major significance to the Company, the nearby C&N 25-1H well has been speculated to have had initial production rates (I.P.) of 1,000 barrels per day (BPD). Calyx also has plans for further wells immediately north of our Ripley Prospect holdings and is currently exploiting prospects on over 40,000 acres in central and eastern Oklahoma.

The 2,000 acre Ripley Prospect block is now part of the central focus of the Company's 2011 development plan. A location for our first Mississippi horizontal has been engineered and proposed. The 1,500 to 4,000 foot lateral will drill down and along the Mississippi which sits directly over the Woodford Shale. The lease block would allow, if successful, for the drilling of 5 horizontals on 320 acre parcels. Further information will be released regarding potential spud dates and particulars on the play.

Company President Robert McIntosh stated, "We are very pleased to have added this encouraging and very interesting horizontal Mississippi play to the North Oklahoma Project. With the new drilling combined with our existing lands encompassing both Woodford and Mississippi prospects, we have secured sufficient acreage to drill many horizontal and vertical wells in 2011. If we are successful, we will rapidly move the Company forward to our stated production goals and targets."

Given the added expense of horizontal drilling, American Petro-Hunter has developed a prudent "watch & learn" approach based on the experiences of the well-funded major operators at the Yale Prospect area. As the drill programs currently under development by the major players adjacent to our Yale Prospect are not yet underway, the opportunity to quickly move into a proven and highly productive area less than 10 miles away at Ripley presented itself as a desirable near term opportunity.

The Company will continue to explore and develop vertical wells in the Yale area and plans to immediately follow up the NOS227 well dependent on completion results.