“The Wolfcamp now holds the largest estimated, continuous oil accumulation that the USGS [U.S. Geological Survey] has assessed in the United States to date.” That’s how the USGS described its estimate for the Wolfcamp Formation in the Midland Basin. The estimate is nearly three times larger than the 2013 USGS estimate for the Bakken-Three Forks resource assessment.
“Even in areas that have produced billions of barrels of oil, there is still the potential to find billions more,” said Walter Guidroz, program coordinator for the USGS Energy Resources Program.
The Wolfcamp A, B, C and D have been opened up with horizontal drilling and hydraulic fracturing. More than 3,000 horizontal wells have been drilled and completed in the Midland Basin Wolfcamp.
Apache Corp.’s Alpine High Field is focused on the Woodford and Barnett formations. There are also some Wolfcamp zones in the field.
If you were an oil and gas company looking for a place to drill, you’d likely be willing to spend a half-billion dollars or so for a nice footprint in either basin. And there would be some financial institutions out there willing to back that play.
The Baker Hughes rig count stayed the same at 218 rigs in the Permian Basin for the week ending Nov. 11, 2016. The 11 was rather a portent. After all, the Permian rig count was only 11 rigs fewer than the same week in 2015.
On Nov. 17, 2016, the price of oil was at $45.42, and the price of natural gas was $2.87. Which play would make the most money for operators today? That’s the “$64,000 question,” as the 1950s quiz show used to ask.
“Changes in technology and industry practices can have significant effects on what resources are technically recoverable,” Guidroz said.
West Texas has been described as miles and miles of miles and miles. Operators are out in the undiscovered country—undiscovered resources are those that are estimated to exist based on geologic knowledge and theory. Continuous resources commonly require special technical drilling and recovery methods, according to USGS.
In its third-quarter 2016 report Nov. 3, Apache had expanded its acreage position by 13,000 acres to 320,000 net acres. John J. Christmann IV, Apache’s CEO and president, said, “Our deliberate focus on strategic testing during the downturn not only yielded excellent results with our Alpine High discovery but also significantly improved our results in our Midland and Delaware basins focus areas. Our economic drilling inventory in the Permian Basin is more extensive today than at any time in the company’s history, and we expect it will continue to grow as we further delineate our vast acreage position in the basin.”
That is good news for the drilling industry.
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