Be careful what you wish for.....
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.
Kudzu is a curse that takes over and destroys everything in it’s path, just ask SC and parts of NC...it’s creepy and creeping. Good food for groundhogs though.
this is all fracked oil/w horizontal drilling. It comes from the source rock that fed oil wells of earlier generations.
Thanks CK.
And how about Beef Prices not going through the moon because we are making Ethanol out of Cow food.
I dang near choked today when just being a lookie-loo at the meat counter and saw Petite Filet Mignon @ $29.95 a POUND...
Range cattle would love kudzu. ;-)
Probably, so come on down....we will load you up. Must have lots of water to survive though.
Only wishful thinking here on kudzu. Temps go down to near -40 F in winter with precipitation about 12-13 inches per year—mostly snow, and evaporation is fast with high winds about half the time.
This shale oil is very costly to get.
What does your unidentified sources say about this play?
Surely they are dropping confidential tidbits your way.
there’s a half dozen companies building natural gas infrastructure around the USA for trucks and buses—including TBoone Pickens company.
I thought goats loved it.
“Early estimates suggest that this oil rich region could contain 7 billion barrels of recoverable oil….”
That’s a good thing alright — but, for some perspective, the Alberta oil sands have 175 billion barrels of proven reserves (and as much as ten times more, depending on advances in extraction technology). Just a pipeline away from you.
Be careful what you wish for.....
Just a pipeline away from you.
**********
That’s the plus for LA as there are refineries and pipelines in place or
can be put in place if needed.
Wise women avoid goats, because kudzu isn’t all they eat...flowers, vegetable leaves, vines, and everything one wants to keep them out of.
You guys have moonshine..... more BTU’s then gasoline.
Those “lumps” you see are people too slow to move out of the way....
“It’s the next BLM turtle grazing area!”
But what’s BLM gonna do? Dirty Harry have sights on this area for another ‘solar farm’?
“Wish I could get kudzu to grow...”
NO...NO YOU DON’T!!! Never, never, ever! You would rue the day you planted the first sprig.
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