[Editor's note: A version of this story appears in the November 2019 edition of Oil and Gas Investor. Subscribe to the magazine here.]

What’s the word on the Austin Chalk?

How about mixed? Good, trou­bling and confusing results make ‘mixed’ the best term to employ in describing recent news flow about the greater Chalk. The leg­acy play arcs across the Gulf Coastal plain from near the Mexican border on the west to an emerging play just east of the Mississip­pi River. Chalk history is fascinating, with the play producing almost 1 billion barrels of oil in its 50-year history and more than 4 trillion cubic feet of natural gas.

Chalk interest was revived once again last year, first in the emerging play on trend near the intersection of Mississippi and Louisi­ana, east of the Mississippi River, where Marathon Oil Corp., ConocoPhillips Co. and EOG Resources Inc. were involved in a big acreage land grab.

This occurred simultaneously with news about the Chalk in the eastern Eagle Ford (east of the San Marcos arch) where Wild­Horse Resource Development Corp. gen­erated positive news using modern well completion techniques before selling the acreage it bought from Anadarko Petroleum Corp. for $625 million to Chesapeake Ener­gy Corp. for $3.98 billion.

Meanwhile, a steady stream of indepen­dents, many privately held, chipped around the edges, blocking up Chalk acreage and experimenting with completion modalities. Results of those efforts are now becoming public. This, too, has been all good.

Then came second-quarter 2019 earnings. ConocoPhillips noted that three of its four Louisiana wells in the emerging Chalk were big producers, only the production was 90% water with oil cuts under 100 barrels per day (bbl/d) of oil. The company plans to di­vest the 210,000 acres it acquired previous­ly. Similarly, at least one EOG neighboring well in the emerging Louisiana Chalk trend has produced significant water volumes.

That said, EOG, Devon Energy Corp., Cimarex Energy Co. and Australis have filed more than 60 permits recently in the emerging Chalk east of the Mississippi River.

Still, consider the ConocoPhillips news troubling.

This would not be the first time the Chalk promised much only to deliver economic heartache. The natural fractures through the Chalk have always been a source of large flush hydrocarbon production. But produc­tion declined quickly as operators drained the fractures. Early horizontal efforts in the 1990s involved attempts to intersect mul­tiple fractures via openhole completions, though the results were the same, even if it took longer to get there.

Meanwhile, the industry has learned a lot about tight formation plays in the interven­ing years. It appears possible to obtain ma­trix production via the application of tight formation drilling and completion technol­ogies, including longer laterals, closer stag­es and larger proppant loading in a slick­water plug and perforate configuration. In other words, think of Eagle Ford drilling and completion methodologies applied up­hole in the Chalk carbonate.

In Webb County, SM Energy Co. complet­ed a second Austin Chalk test in the second quarter with a 30-day peak rate of 3,200 bar­rels of oil equivalent per day (boe/d), 19% oil, 38% NGL. The Watson State 167H fea­tured a 12,875-foot lateral. SM Energy’s ear­lier Chalk test, the Galvan Ranch C 917H, generated a peak rate of 2,500 boe/d on a 7,886-foot lateral. The company plans two more Chalk tests by year-end.

So the news contains opposite results at opposite ends of the greater Chalk. As for the middle, TreadStone Energy Partners used Hart Energy’s DUG Eagle Ford con­ference to discuss recent efforts in Hearne Field, an Austin Chalk play formerly oper­ated by Anadarko Petroleum where Tread­Stone has 52,000 HBP gross acres. There are nine rigs active in the area, and increased developmental efforts have propelled area oil production from a low of 37,000 bbl/d in 2017 to 80,000 bbl/d currently.

To date, TreadStone has drilled 20 in­fill Austin Chalk wells. The company has evolved its completion recipe and now cas­es and cements Chalk completions on stage spacing under 150 feet and proppant load­ing up to 2,500 pounds per foot. Previously, the completion modality relied on multilat­eral openhole wells and commingled multi­formational production with low proppant treatment.

However, openhole completions created well integrity issues. TreadStone is report­ing 30-day IPs of 945 bbl/d and 10-month cumulative production of 160,000 bbl, a threefold increase over legacy Chalk wells, and is extending the completion modality lower to tap the Eagle Ford.

There is a limit to how many times one can apply the term “revival” to a 50-year old play. Tantalized by occasional good news in otherwise mixed Chalk results, op­erators are exploring whether the third time will be the revival charm.


See Frank McCorkle’s full presentation at Hart Energy’s 2019 DUG Eagle Ford conference and exhibition.

See Frank McCorkle’s full presentation at Hart Energy’s 2019 DUG Eagle Ford conference and exhibition.