Gulf Coast Still Revealing Its Charms

Haynesville, Lower Tertiary the latest allures

America’s Gulf Coast long has been noted for its abundant oil and gas accumulations and prolific production.

In fact, the region’s role in the industry dates back to 1901, when Louisiana’s Jennings Field and the giant Spindletop Field near Beaumont, Texas, were discovered only months apart.

Lately, however, there’s talk aplenty that the extreme rate of drilling and production activity in the Rocky Mountain region will soon relegate the Gulf Coast to dinosaur status.

That remains to be seen – not because the Rockies are going to go away, but rather because this hydrocarbon-rich locale in the southern United States appears very much alive and vibrant.

A couple of stellar examples are the still-rockin’ Barnett Shale play in Texas and the near-frenzied action in the brand new Haynesville Shale gas play in north Louisiana.

“The Haynesville has been a game changer onshore,” said AAPG member Art Donovan, senior project adviser of North American gas at BP and technical program co-chair of the upcoming GCAGS-GSA annual meeting in Houston. “It’s an order of magnitude more than anything else in terms of size.”

One Haynesville operator, in fact, estimates between 7.5 Tcf and 20 Tcf resource potential for its company, depending on the ultimate size of its leasehold.

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America’s Gulf Coast long has been noted for its abundant oil and gas accumulations and prolific production.

In fact, the region’s role in the industry dates back to 1901, when Louisiana’s Jennings Field and the giant Spindletop Field near Beaumont, Texas, were discovered only months apart.

Lately, however, there’s talk aplenty that the extreme rate of drilling and production activity in the Rocky Mountain region will soon relegate the Gulf Coast to dinosaur status.

That remains to be seen – not because the Rockies are going to go away, but rather because this hydrocarbon-rich locale in the southern United States appears very much alive and vibrant.

A couple of stellar examples are the still-rockin’ Barnett Shale play in Texas and the near-frenzied action in the brand new Haynesville Shale gas play in north Louisiana.

“The Haynesville has been a game changer onshore,” said AAPG member Art Donovan, senior project adviser of North American gas at BP and technical program co-chair of the upcoming GCAGS-GSA annual meeting in Houston. “It’s an order of magnitude more than anything else in terms of size.”

One Haynesville operator, in fact, estimates between 7.5 Tcf and 20 Tcf resource potential for its company, depending on the ultimate size of its leasehold.

“For the Gulf Coast, the two 90-pound gorillas in the room are the Haynesville onshore and the Lower Tertiary play in the deepwater Gulf of Mexico,” Donovan noted.

Room for the Little Guys

Much of the region between these disparate geographic locales also remains plenty attractive – especially to the smaller players who long have been a dominant force in Gulf Coast E&P.

“There’s still a lot of activity for small independent exploration companies and producers along the Gulf Coast,” said AAPG member Ken Nemeth, senior geoscientist at Schlumberger and current president of the GCAGS. “They’re always going to play their niche areas.”

Nemeth, who’s had plenty of experience not just participating but also observing regional trends and activities, knows there is and always will be an ebb and flow factor.

“They (small independents) can go into the coastal waters and buy fields that others have to write off because they’re not profitable for them,” Nemeth said. “But someone new comes in and starts off with a new scheme, and away they go.

“Given the high prices we have, the companies want to drill more,” he noted.

Technology plays a role, too. It’s better, it’s more affordable and it’s available.

“They have the utility of 3-D, the workstation capability to evaluate the seismic more quickly and find better prospects,” he said.

But there are problems in the region, and they have nothing to do with the geology.

“The potential limitation in the Gulf Coast is on the drilling side, from the standpoint of the number of rigs available and the crews to populate those rigs,” according to Nemeth, who noted that pipe also looms as a problem.

“I talked to people last year who bought pipe months ahead of when they would need it, predicated on being able to get a rig and drill a well,” Nemeth said. “But they hadn’t been able to get a rig, and the pipe condition had deteriorated.”

Future Potential

Nemeth noted there are so many industry folks headquartered in the Gulf Coast – especially in Houston, New Orleans, Lafayette, San Antonio and Corpus Christi – that he envisions there will continue to be a lot of action in this region.

“In the digital age the world has shrunk so much that people can explore anywhere,” Nemeth said. “But if you can’t get into plays because of acreage, you’re always going to come back to your favorite playground – and the Gulf Coast has been the independents’ playground for decades; I don’t think that’s going to change.”

The Gulf Coast has been picked over many times, e.g., the Austin Chalk has had five reincarnations, according to Nemeth.

“As tools for the geologist and geophysicist become more efficient and less costly – whether workstations or PCs,” Nemeth said, “the software is available to help explore larger areas more quickly.

“There’s going to be someone who’s always going to revisit an area and find something someone may have missed or by-passed.”

Nemeth noted the seismic companies are looking at the transition zone once again with modern acquisition tools to determine if they can re-acquire or re-process data through this region and open up a somewhat obscured area for exploration.

“If you look at that kind of area that’s been by-passed as much for lack of quality seismic as anything else, that could be another impetus to exploration,” Nemeth said.

“The Gulf Coast is not going to go away.”

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