Exploration of Cline Shale moving forward

December 21, 2013

What kind of success are companies enjoying in drilling in the Cline Shale? Is the play moving east toward Sweetwater? When will the region experience the anticipated boom from the Cline Shale?
The answers to those questions are not as easily attainable as one might expect. First of all, one must realize that most of the drilling activity on the eastern shelf of the Permian Basin has nothing to do with the Cline Shale.
L.C.S. Production in Abilene is developing the White Flat Field between Trent and Sweetwater. That is a successful re-entry of a field that was first drilled in the 1950s. Houston-based Kinder Morgan operates the nation’s largest CO2-flood, which is using carbon dioxide injection in a tertiary recovery in the 49,000-acre SACROC Unit in Scurry County. There continues to be conventional vertical drilling in long-known formations in West Texas, too, activity that has long been a staple of the oil and gas industry in West Texas.
The potential of turning the drill bit on its side and drilling horizontally in the Cline Shale, however, is what has folks excited on the eastern side of the Permian Basin. But to get reading on how the exploration of the Cline Shale is going is not easy.
Gene Powell calls the effort to ascertain the development of the Cline Shale “very confusing and frustrating.” Powell is the owner of the Fort Worth-based “Powell Shale Digest,” a weekly online industry publication that tracks news from the nation’s shale plays, including the Barnett and Eagle Ford in Texas, the Utica and Marcellus in Pennsylvania, West Virginia and Ohio, the Bakken in North Dakota, the Haynesville in Louisiana and the Fayetteville in Arkansas, just to name a few.
He points out that the Texas Railroad Commission does not have a designation for horizontal wells in the Wolfcamp or the Cline Shale formations, which is sometimes also called the Lower Wolfcamp. So the drilling permits filed are listed under the last field name, so most of the Cline Shale or Wolfcamp horizontal wells are listed as either Spraberry (Trend Area) or Garden City, S. (Wolfcamp) fields.
In his latest report, Powell identified 87 “candidate” producing wells that he believes are horizontal Cline Shale or Wolfcamp wells. Of those 87 wells, 59 are located in Glasscock County, which continues to be a hotbed of activity on the eastern side of the Permian Basin. Powell also identified two “candidate” wells in Coke County, seven in Howard County, one in Nolan County, four in Fisher County, three in Mitchell County and 11 in Sterling County.
Experts have predicted the Cline Shale, considered the source rock for an area that includes parts of Fisher, Nolan, Sterling, Coke, Glasscock, Tom Green, Howard, Mitchell Borden and Scurry counties, could hold as much as 30 billion barrels of recoverable oil. It is located at 6,000 to 9,000 feet depth and lies below the Wolfcamp zone.
Without knowing what wells are specifically considered Cline Shale, the only other way to get an understanding is to read the third-quarter earnings reports of the companies involved in the region. That, however, didn’t reveal much, either.
Oklahoma City-based Devon Energy Corporation, which announced earlier that it has 500,000 acres prospective to the Cline Shale in a $1.4 billion joint venture agreement with Sumitomo, did not mention the Cline Shale in its third-quarter earning report. But it did report that “Also driving oil growth in the Permian was another strong performance from Devon’s Wolfcamp Shale position in the Southern Midland Basin. Devon brought 26 Wolfcamp Shale wells online during the third quarter, with initial 30-day rates average 400 barrels of oil equivalent per day, of which 73 percent was oil.”
Laredo Petroleum Holdings, Inc., in Tulsa, is the one company that mentioned the Cline Shale in its third-quarter earnings report. Laredo reported that the company recorded its best horizontal Cline 30-day average initial production from the Glass-Glass 10 #153H well in Glasscock County, producing 1,052 barrels of oil equivalent per day on a two-stream basis. The Glass-Glass 10 #153H well achieved a peak 24-hour rate of 1,455 barrels of oil equivalent per day.
Laredo has also drilled its first stacked lateral test of vertical spacing with three horizontal wells drilled on the same pad into the Upper, Middle and Lower Wolfcamp zones.
So while it is difficult, if not impossible to put exact numbers on Cline Shale production, the continued increase in associated activity in this part of West Texas in proof that the exploration of the Cline Shale is moving forward.

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