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Wildcatters rush Spindletop in return to East Texas oil
sunherald ^ | March 20, 2014 | BRADLEY OLSON and DAVID WETHE

Posted on 03/21/2014 11:44:38 AM PDT by ckilmer

Wildcatters rush Spindletop in return to East Texas oil

Wildcatters rush Spindletop in return to East Texas in search of oil

By BRADLEY OLSON and DAVID WETHE

 

 

David Wethe/Bloomberg News'I never thought I'd go back to East Texas,' says Mark Plummer, a third-generation oilman who grew up hearing stories about his grandfather's days in the oil patch, fields thought to be long played out by the time Plummer arrived in 2000 with his own company, Chestnut Exploration & Production. DAVID WETHE — BLOOMBERG

 

HOUSTON -- From the storied King Ranch near the Mexican border to the 1901 Spindletop well in East Texas -- the most famous gusher of all time -- oil companies are returning to their old stamping grounds in search of the next big find.

All over East Texas, producers such as Anadarko Petroleum and EOG Resources are flocking back to areas that helped fuel America's rise as a superpower after World War II. They're applying new techniques to layers of rock stacked like playing cards underground that oil companies have drilled for decades. And, as fields from Louisiana to North Dakota are starting to show signs of fatigue, drillers are targeting areas that have long gone overlooked or barely tapped.

"I never thought I'd go back to East Texas," said Mark Plummer, a third-generation oil man who grew up hearing stories about his grandfather's days in the oil patch "living the roughneck dream." Those fields were thought to be long-played out by the time Plummer arrived in 2000 with his own company, Chestnut Exploration & Production. The basin was "dead as a door nail," he said. Now he's betting his East Texas play will be his "Jed Clampett moment," referring to the television character who struck it rich in the 1960s sitcom "The Beverly Hillbillies."

East Texas' oil and gas prospects are springing to life again. Plummer's closely held production company just drilled a successful natural-gas well in Rusk, Texas, and is preparing to drill horizontally for oil near the same formation that helped build H.L. Hunt's energy empire in the 1930s. He plans to drill another three dozen wells over the more than 10,000 acres he's leased 150 miles north of Houston. "Now, it's a hot area," he said. "East Texas is a great place to play."

Horizontal drilling and hydraulic fracturing, which cracks rocks to release oil and gas, are allowing the industry a fresh start in old hot spots, said Jordan Marye, a managing director for oil and gas at Denham Capital Management, which has invested in East Texas. "What we've been able to do is essentially have another full pass at these same resources."

Oil companies are racing to establish new fields capable of sustaining a drilling campaign that has upended world markets and pushed the U.S. past Saudi Arabia and Russia last year as the world's top producer of oil and natural gas. Fueling the renewed search is a fear that shale wells are petering out too quickly, raising the stakes for a new find to replace rapidly declining production in some areas. North Dakota, one of two states at the heart of the U.S. oil renaissance, saw the sharpest output decline in the state's history in December.

Not everyone is sure there is another big oil find out there. In 2011, former Chesapeake Energy founder Aubrey McClendon said all of the largest untapped U.S. fields have been discovered. So far, about 80 percent of the growth has come from just two areas: North Dakota's Bakken shale and South Texas' Eagle Ford formations.

Last year saw the slowest rate of oil production growth, at 40 percent, in those two areas since the onset of the boom. That compares to 2011 when oil production nearly doubled in the fields.

Some producers have touted Ohio's Utica or the Tuscaloosa Marine shale in Louisiana as the fields most likely to see a flurry of development next. Others have focused instead on wringing more out of every well. As the industry moves to dispel fears of falling prices or wells that fizzle too quickly, many have begun to look to well-worn regions of East Texas.

The prolific Frio sands, the rock layer that gave birth to much of Texas's booming production from 1930 to the 1980s, runs from the King Ranch south of Corpus Christi up along the Gulf Coast to Spindletop. The East Texas field mostly bought and developed by Hunt, a larger-than-life character who was among the world's richest men in the 1950s, allowed his company to exceed all of German output with its oil sales to the Allies in World War II.

"If you're going to find it, you have to go back to where you were before," said Reed Van Valin, vice president of operations for Geomap Company, which tracks and maps the development of drilling across the U.S. "A lot of these lessons were all learned in the old conventional days. They're just reapplying it now."


Read more here: http://www.sunherald.com/2014/03/20/5432656/wildcatters-rush-spindletop-in.html#storylink=cpy


TOPICS: Business/Economy
KEYWORDS: fracking; gas; keystonexl; oil; opec; texas

1 posted on 03/21/2014 11:44:38 AM PDT by ckilmer
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To: thackney

Your thoughts?


2 posted on 03/21/2014 11:51:53 AM PDT by henkster (I don't like bossy women telling me what words I can't use.)
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To: ckilmer

I had read some years back, here on FR, that many capped wells in Texas, were starting to fill in with oil again.


3 posted on 03/21/2014 11:57:30 AM PDT by mountn man (The Pleasure You Get From Life Is Equal To The Attitude You Put Into It)
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To: mountn man

they’re drilling again not because the wells have refilled but because they have better drilling methods available to them.

What most people don’t understand is that all the drilling since the beginning of the oil age in 1850 or so has only depleted about 10% of the world’s oil—including all the oil in old american oil fields.

The new drilling methods will enable drillers to extract the next 10-20%. But that’s an enormous amount of oil.


4 posted on 03/21/2014 12:00:31 PM PDT by ckilmer
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To: ckilmer

Thanks for that info.


5 posted on 03/21/2014 12:02:56 PM PDT by mountn man (The Pleasure You Get From Life Is Equal To The Attitude You Put Into It)
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To: mountn man

I had read some years back, here on FR, that many capped wells in Texas, were starting to fill in with oil again.

The oil companies must have stuffed them full of dinosaurs again.


6 posted on 03/21/2014 12:03:42 PM PDT by mountainlion
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To: ckilmer
Actually, the whole idea of peak oil is offically now fried bologna sandwich, as I used to say. :-)

Thanks to better extraction methods, many supposedly tapped out oilfields are active again. We may be only scratching the surface of the world's known petroleum deposits.

7 posted on 03/21/2014 12:13:31 PM PDT by RayChuang88 (FairTax: America's economic cure)
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To: mountainlion

You realize that they are rethinking the whole ancient forest/dinosaur scenario explaining oil formation.


8 posted on 03/21/2014 12:16:31 PM PDT by txrefugee
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To: ckilmer
Oil companies are racing to establish new fields capable of sustaining a drilling campaign that has upended world markets and pushed the U.S. past Saudi Arabia and Russia last year as the world's top producer of oil and natural gas.

Then why is gasoline $3.50 a gallon?....................

9 posted on 03/21/2014 12:22:18 PM PDT by Red Badger (LIberal is an oxymoron......................)
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To: txrefugee

The old empty wells may have refilled over the years.....................


10 posted on 03/21/2014 12:22:58 PM PDT by Red Badger (LIberal is an oxymoron......................)
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To: txrefugee
You realize that they are rethinking the whole ancient forest/dinosaur scenario explaining oil formation.

Some have been way ahead for decades. The US is one of he last to do away with this old theory. Lots of others have adopted abiotic theory.

http://www.wnd.com/2008/02/45838/

11 posted on 03/21/2014 12:28:44 PM PDT by mountainlion
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To: ckilmer
Thousands of marginal, but still producing wells were P&A (plugged and abandoned) and a bunch of small independent companies went out of business when the Saudis artificially dropped the price of oil to $10 to $12 a barrel years ago (the big oilfield crunch).

Those zones are still there and at today's prices and with newer procedures, they would probably be decently to very profitable.

With the old well logs and historical data, exploration cost would be minimal, they would know from the *get go* what they're going after and where it's at.

I personally know of many wells that were P&A'ed because a pay zone was found, but it was in a *tight streak* (in shale), that appears not to be that big of a problem anymore.
Also on some wells that were producers in other zones, the *tight streak* was ignored.

12 posted on 03/21/2014 12:45:48 PM PDT by The Cajun (Sarah Palin, Mark Levin, Ted Cruz, Mike Lee, Louie Gohmert......Nuff said.)
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To: The Cajun

when the Saudis artificially dropped the price of oil to $10 to $12 a barrel years ago (the big oilfield crunch).
.............
That was back in the 1980’s. imho that collapse in the price of oil not only killed the nascent alternative fuels program of the time — but it also was the cause of the great Reagan economic Renaissance—because while low oil prices kill the oil industry—they are pure oxygen to the rest of the economy—which in turn—over time— drives up demand for oil—which in turn—over time— drives up the price of oil—which in turn over time— makes more expensive oil deposits profitable to exploit.

This turning won’t last forever. Maybe another 15-20 years.

imho cheaper forms of energy are likely to become available in a couple decades.


13 posted on 03/21/2014 1:34:24 PM PDT by ckilmer
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To: ckilmer

http://www.amazon.com/Frackers-Outrageous-Inside-Billionaire-Wildcatters/dp/1591846455/ref=sr_1_1?s=books&ie=UTF8&qid=1395434328&sr=1-1&keywords=fracking+the+outrageous+inside+story+of+the+new+billionaire+wildcatters


14 posted on 03/21/2014 1:39:16 PM PDT by Hojczyk
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To: The Cajun
I personally know of many wells that were P&A'ed because a pay zone was found, but it was in a *tight streak* (in shale), that appears not to be that big of a problem anymore. Also on some wells that were producers in other zones, the *tight streak* was ignored.

Are these intervals geologically related to previously produced zones, or have they been largely identified by the prior drilling? In that case, what lead the industry to identify the Cline beneath the Wolfcamp in the Permian Basin?

15 posted on 03/21/2014 1:48:42 PM PDT by Kennard
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To: Hojczyk

http://www.amazon.com/The-Boom-Fracking-American-Revolution/dp/1451692285/ref=cm_cr_pr_sims_t


16 posted on 03/21/2014 2:25:28 PM PDT by Kennard
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To: ckilmer

Thanks for posting. I live in East Texas and would love a little oil money. We have been having more of our mineral rights leased for the last few years. I get a $125 royalty payment every year from Andarko Petroleum. I think I get .0006 percent or something like that of the total royalty for the well. Drill, baby drill.


17 posted on 03/21/2014 2:55:59 PM PDT by FoundinTexas
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To: ckilmer
This turning won’t last forever. Maybe another 15-20 years.
imho cheaper forms of energy are likely to become available in a couple decades.

I have no doubt about that, but the timing of when it will happen is the big unknown.

At least for the next 15 years, DRILL BABY, DRILL :)

18 posted on 03/21/2014 3:23:20 PM PDT by The Cajun (Sarah Palin, Mark Levin, Ted Cruz, Mike Lee, Louie Gohmert......Nuff said.)
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To: The Cajun

At least for the next 15 years, DRILL BABY, DRILL :)
...........
agree


19 posted on 03/21/2014 3:26:14 PM PDT by ckilmer
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To: Kennard
Are these intervals geologically related to previously produced zones, or have they been largely identified by the prior drilling?

Largely identified by prior drilling from *electric logs* by Schlumberger, Halliburton and other such oilfield service companies during drilling or in re-completion or work-over of older wells.

There are some previously produced zones which could probably be made profitable again with the new technology, imho.

Those are the areas of my knowledge, particularly in south and southeast Louisiana inland and inland lakes.

Worked in it for 30 years before retiring 15 years ago.
My knowledge is a little dated, but there is still *good stuff* in older wells and fields :)

20 posted on 03/21/2014 3:47:07 PM PDT by The Cajun (Sarah Palin, Mark Levin, Ted Cruz, Mike Lee, Louie Gohmert......Nuff said.)
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