Barnett Shale Play Going Strong

The 17-Year Overnight Sensation

Production just keeps going gangbusters in the Barnett shale play in the Fort Worth Basin in north-central Texas.

In fact, the buzz in the oil patch likens the play's huge production volumes to printing money in the field.

The current frenetic leasing and drilling activity is a world removed from the early 1980s when Mitchell Energy -- intrigued by widespread gas shows and a trickle of unexpected production while drilling other targets -- kicked off the initial effort to unlock the secrets of the Barnett and determine its potential.

Close to two decades elapsed before the play proved to be solidly economical for Mitchell, prompting many of today's veteran players to dub it the "17-year overnight sensation."

The current undisputed kingpin of the Barnett is Devon Energy, which snapped up Mitchell Energy in 2001, laying claim to Mitchell's already-substantial holdings in the shale.

"There are more than 100 companies and a lot more individuals currently active," said Patrick J.F. Gratton, independent geologist and AAPG president, "and there are well more than 60 operators."

Gratton, who has been an active participant in the play for several years, is on the lecture circuit with his presentation "Barnett Shale Play: Big and Getting Bigger," which has drawn audiences at numerous domestic geological society gatherings as well as the University of Scotland at Aberdeen.

Not surprisingly, there's no dearth of folks wanting to gain entry into this unconventional shale gas bonanza.

AAPG member Kent Bowker, consulting geologist and a seasoned Barnett player and alumnus of Mitchell Energy, agrees with Gratton's assessment and says "the number grows daily."

"I get at least two calls each week from people wanting to meet with me to talk about getting into the Barnett," Bowker said. "Both small and mid-size independents are interested, and even the majors are starting to look now.

"It's like a shale revolution going on -- everyone's gotta have some."

It's easy to understand why when you look at the numbers he ticked off:

  • More than one Tcf already produced.
  • Field producing more than one Bcf/day and growing.
  • Well completions at a rate of 1.5/day.
  • Likely several Tcf of booked reserves.

The Barnett, in fact, kicks out more than one-half of the total shale gas produced in the United States, Gratton noted.

Image Caption

Looking for black gold, deep in the heart of Texas: A vibroseis crew prepares to acquire data in eastern Wise County, one of several Texas counties where Barnett production is plentiful. Two producing Barnett wells can be seen in the background. Photo courtesy of Jon Huggins.

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Production just keeps going gangbusters in the Barnett shale play in the Fort Worth Basin in north-central Texas.

In fact, the buzz in the oil patch likens the play's huge production volumes to printing money in the field.

The current frenetic leasing and drilling activity is a world removed from the early 1980s when Mitchell Energy -- intrigued by widespread gas shows and a trickle of unexpected production while drilling other targets -- kicked off the initial effort to unlock the secrets of the Barnett and determine its potential.

Close to two decades elapsed before the play proved to be solidly economical for Mitchell, prompting many of today's veteran players to dub it the "17-year overnight sensation."

The current undisputed kingpin of the Barnett is Devon Energy, which snapped up Mitchell Energy in 2001, laying claim to Mitchell's already-substantial holdings in the shale.

"There are more than 100 companies and a lot more individuals currently active," said Patrick J.F. Gratton, independent geologist and AAPG president, "and there are well more than 60 operators."

Gratton, who has been an active participant in the play for several years, is on the lecture circuit with his presentation "Barnett Shale Play: Big and Getting Bigger," which has drawn audiences at numerous domestic geological society gatherings as well as the University of Scotland at Aberdeen.

Not surprisingly, there's no dearth of folks wanting to gain entry into this unconventional shale gas bonanza.

AAPG member Kent Bowker, consulting geologist and a seasoned Barnett player and alumnus of Mitchell Energy, agrees with Gratton's assessment and says "the number grows daily."

"I get at least two calls each week from people wanting to meet with me to talk about getting into the Barnett," Bowker said. "Both small and mid-size independents are interested, and even the majors are starting to look now.

"It's like a shale revolution going on -- everyone's gotta have some."

It's easy to understand why when you look at the numbers he ticked off:

  • More than one Tcf already produced.
  • Field producing more than one Bcf/day and growing.
  • Well completions at a rate of 1.5/day.
  • Likely several Tcf of booked reserves.

The Barnett, in fact, kicks out more than one-half of the total shale gas produced in the United States, Gratton noted.

"All other Texas gas fields are either flat or declining," Bowker said, "but the Barnett shale is like a perpetual motion machine -- and there's no prospect of the end."

Get Ready ...

The heart of the play is the Newark East Field with more than 2,340 wells producing from the Barnett at depths as shallow as 6,500 feet. The consensus among many of the veteran players is the field could ultimately surpass the giant Hugoton Field to become the largest gas field in the United States.

The core area of the Newark East lies in southeast Wise, southwest Denton and north-central Tarrant counties. Production continues to expand geographically, however, with the best well in the field currently to the south in Johnson County.

"Best well" is a record that usually falls every two months as operators refine their completion techniques, Bowker noted.

"At Mitchell, we did some estimates of the extent of the gas-prone area of the Barnett (some areas of the shale are still oily), and I've done a couple since then," said Mitchell alum and consulting geologist Dan Steward, who works with Republic Energy, one of the play's earliest operators. "I believe the gas-prone area occupies between 6,000 and 7,000 square miles, which includes areas underneath the Ouachita overthrust."

Before you rush out the door to stake a claim in this amazing play, gather up a bushel basket of money. Also, be aware there are reasons why the Barnett caused years of frustration and sleepless nights for the pioneering Mitchell crew before they turned it into the next big thing.

There's a host of complex geological and engineering issues standing between the operator and first production.

For starters, shale is not supposed to be a reservoir rock, according to Bowker.

"It's astounding the most prolific reservoir rock in Texas is a shale," he noted. "You know it's working, but you look at the rock and it just doesn't make any sense how all that gas is coming out of that rock that's tight as a tabletop.

"It sounds like a gas factory," Bowker noted. "But there are geologic reasons why some parts of the basin are more prospective than others, and there's science and engineering behind all this -- you don't just drill a hole like Jed Clampett and have gas come out of the ground.

"Prices are up and everyone hears great things about the Barnett," he continued. "They don't understand it took a long time to figure out, and we're still trying to figure it out -- and not all are making money while they're doing it. At least 20 companies have drilled dry holes because they don't understand it.

"We're still writing the book on shale."

Get Set ...

If you're still determined to get in on the action, it's fairly easy to establish a presence -- if you're willing to pay the price.

Late last year, a lease sale in a part of the play's core area in northern Tarrant County, where the federal government holds mineral rights from a former Air Force base, captured a fee of $10,200 per acre, Bowker said.

If this makes you feel faint, go shopping in Bosque County to the south of the big action, where prices recently were in the $300 per acre range -- still up considerably from a couple of years ago when owners couldn't give leases away, according to Steward.

"There's essentially been no drilling yet," Steward said, "but the Barnett is gas-prone here with a thickness of 150 to 200 feet. People are taking leases with the idea the technology will catch up."

"People are also taking leases in areas where I question it will work," Bowker said. "But I don't say no, because there are very few places where I would guarantee the Barnett shale won't work."

Where it doesn't work, there can still be an upside in some instances, according to Gratton.

"In the westerly part of the play such as Parker County, there are shallower Pennsylvanian objectives -- fluvial deltaic sandstones, which come and go and are hard to predict -- which frequently are bail-out zones," Gratton said. "From an investor standpoint, if you're in one of the treacherous areas of the Barnett where it's difficult to make good completions, these overlying zones take away a lot of the financial risk.

"This adds a plus to where the play gets shallower and weaker to the southwest of the core area."

Fracture treatments and their containment within the formation have always been key to producing this tight low-permeability shale.

"In some places, if you don't have a relatively accommodating limestone bounding the Barnett to stop the artificial fracture from going on, then the fractures will continue in a way to lead you into a water-bearing formation or aquifer," Gratton said. "This has been a big problem."

The original gel fracs were highly expensive and a major drag on the economics of the play, even though Mitchell had extensive existing infrastructure in the area for its shallower production. In the late 1990s engineers began experimenting with water fracs, which proved to be comparable to gel fracs in performance while lowering stimulation costs dramatically.

Horizontal drilling provided another leap forward for the Barnett.

"You get much more efficient fracture stimulation with horizontals than with verticals," Bowker noted. "The hydraulics are more efficient in contacting more of the reservoir rock, and the more reservoir rock you can contact with the well and with the fracture stimulation, the better the well.

"You can get about three times the well for two times the cost of a vertical," he said, "maybe better."

Whoa! Uh ... Go!

A note of caution to newcomers: "A year-and-a-half ago, we saw a lot of unknowns, or mom 'n' pops, picking up acreage and drilling vertical wells," Steward said. "They basically found the probability of success was not high enough with vertical wells."

Steward and many of his peers predict major longevity for the Barnett.

"It's going to be producing for more than a hundred years, maybe several hundred," he predicted. "Technology will let us do a lot of things, and I have no idea what that technology will be.

"No one recognized way back that water frac technology would cause the Barnett to take off," Steward said, "and then horizontal drilling kicked it into another high gear. Some other technology will surpass that.

"The majority of the gas we're getting out is free gas," he added, "and until we start doing things to enhance the ability to get all the sorbed gas out, there's a tremendous amount of gas still down there locked up."

Steward anticipates one breakthrough will be the use of dual gathering systems, i.e., a low pressure system parallel to a high pressure one. The state of the well determines which gathering system it enters. For example, it's common to re-frac a well and get back into a high pressure regime, meaning the well must be switched to a corresponding gathering system.

Like so many oil and gas plays, the importance of 3-D seismic is not to be underestimated in the Barnett.

"Most companies who know what they're doing would not drill a well without a 3-D survey over it if they're smart," Bowker said. "It's not necessarily to tell where to drill but where not to drill. There are geologic hazards that can be imaged through seismic geophysics."

Jon Huggins, consulting geophysicist and another Mitchell alum, concurs.

"The purpose is to locate such things as faults and karst collapse features, and there are some large regional faults to be aware of, too," Huggins said. "History has shown when you get close to faults, you start having problems with fracs, or get underlying Ellenburger water, or any number of bad things happen to you."

It's particularly noteworthy that without geologist and now-legendary oilman George Mitchell's boundless optimism and undying belief early on in the unproven, perplexing Barnett shale the play likely would have never happened.

"We would not be talking about the Barnett shale if not for George Mitchell," Bowker said. "No other manager or owner of an independent or major company would have let his people work on something so marginally -- and sometimes sub-economic. He put his money into a play for 17 years that was barely economic, never backing down even when his managers said they didn't believe it.

"He's a wildcatter, and he knew there was something there," Bowker continued. "He knew the potential without really knowing why, and he kept pushing his people until they figured it out.

"This field is making billions of dollars for lots of people; they should erect a statue of George Mitchell and pay homage to it every day."

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