Posted on 04/17/2014 2:57:59 PM PDT by ckilmer
Is This Oil Field the Next Bakken?
By Robert Baillieul - April 17, 2014
Over the past few years a handful of energy companies have been silently buying massive tracts of land in a little known area of Louisiana.
Early estimates suggest that this oil rich region could contain 7 billion barrels of recoverable oil… putting it on par with other prolific shale fields like the North Dakota Bakken and the Texas Eagle Ford.
And their bets are starting to pay off. Many of the area’s big oil producers have reported spectacular numbers from their drilling operations. And this could be just the beginning.
Is this North America’s next big shale play?
Shale drilling has been a game changer for the U.S. energy industry. Rapid production growth from a number of nearby fields have already handsomely rewarded investors. But there’s another play that’s catching the attention of oil explorers — the Tuscaloosa Marine Shale in Louisiana and Mississippi.
The Tuscaloosa has been referred to as the Eagle Ford of Louisiana, and it’s not hard to see why. According to a 1997 study by Louisiana State University’s Basin Research Institute, the Tuscaloosa measures 3.7 million acres in size — larger than the state of Connecticut. And the field is considered to be the source rock for the Lower Tuscaloosa Sandstone and the Austin Chalk formations that have been producing oil for decades.
Over the past few years a number of energy producers have been buying as many acres as they can get their hands on.
Early drilling results from Goodrich Petroleum (NYSE: GDP), which owns about 300,000 acres in the play, have been remarkable. Earlier this week the company reported that its Blades 33H-1 well achieved a peak 24-hour initial production rate of 1,270 barrels of oil equivalent per day, or boepd. Even better is the fact that 98% of this production was oil. That’s exactly what you want to see with today’s low natural gas prices.
To put these numbers in perspective, a well is considered a true ‘gusher’ if initial production rates exceed 1,000 barrels per day. So the numbers coming out of Goodrich’s Tuscaloosa acreage is truly spectacular.
Encana (TSX: ECA)(NYSE: ECA) is also betting big on the Tuscaloosa. Earlier this year the company highlighted the field as one of its five focus plays and has budgeted about $300 million to develop its acreage. The fact that Encana, which has a diverse portfolio of assets, is willing to go so aggressively after the region is a strong endorsement.
Devon Energy (NYSE: DVN) also likes what it sees in the Tuscaloosa Marine Shale. First-month initial production targets are between 1,000 boepd and 1,200 boepd and more than 90% of that production is oil. And the region’s favourable regulatory environment and established infrastructure has also put the play high on the company’s priority list.
Foolish bottom line
Almost every company operating out of the Tuscaloosa Marine Shale is reporting blowout numbers. And the three operators I mentioned here are going all-in, spending hundreds of millions of dollars to develop their acreage. While fields like the Bakken and the Eagle Ford steal all of the headlines, the Tuscaloosa is definitely a hidden play for investors to keep an eye on.
fyi
It’s the next BLM turtle grazing area!
Peak Oil. Riiiiiight!
liberals’ heads will explode!
Bump
But you have to be careful. So many guys were "the next Willie Mays."
OPEC is so screwed.
Thanks, 7 billion, niiice!
We are headed towards energy independence. Especially if we start encouraging liberals to self-deport. Maybe we can persuade them to move to Germany and enjoy all that wind power (when the wind is blowing) and all those solar panels (when the sun is shining). Just don’t tell them that Germany’s “greening” involves burning a lot of extra coal. We don’t want to slow their departure down, don’t want the door to hit them in the butt.
I wish my state of Georgia was blessed with petroleum resources.
A teeny, but not yet profitable area supposedly sits up in our northwest corner around Chattanooga.
I think the areas off of our coast are still undetermined and unexplored.
All we have here in abundance are kudzu, red clay, and gnats.
Round up the coon asses they’re eating the turtles.
We Americans could consume 7 billion barrels at the current rate in about one year. We consume approximately 19 million barrels per day.
Imagine an energy boom w/o ethanol scams or commies.gov extortion !
Is this oil that flows naturally, or does it require EOR techniques?
Wish I could get kudzu to grow in a dry, windy area at over 9,000 feet on the Rockies (small Zone 3a area). It would be nice to be able to find red clay nearby, too (nothing but sand and silt here).
Gas $3.799 in some small towns on the Rockies, and it usually goes way up after Memorial Day.
Yeah, sure, but you still got nothing good to say about gnats.
paid the same amount in northern virginia.
without US oil revolution, oil would be at 150@ barrel and gas prices would be over 6 dollars a barrel and the US economy would be in the toilet and the dollar would be in terrible trouble as would the fed.
Man its a shame few people know how great the hand of providence has been on the USA today.
It gets better. But not this year or next year. But in a couple years the USA is going to get oil independence. The oil boom has just started.
In another decade or so something very different is going to happen. demand for oil is going to go down as electric cars and natural gas vehicles gain traction.
That’s when the price of oil will start to ratchet down.
In the mean time the big thing about these oil production numbers is that the USA is going to be saved from the pure foolishness of the people running the federal government.
Alas the fools will never know the bullet that was dodged.
True. ;-)
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