When Norwegian national oil company Statoil joined privately held Cirque Resources LP for a nonoperated interest in the Heath shale in Montana last year, the move seemed to give at least some credence to the potential of the play, which has seen its share of negative prognosis from Wall Street analysts. Holding out hope, locals chatter that the play could become a mini-Bakken shale, like the economic engine just across the North Dakota border to the east.
Some 30 wells have targeted the Heath in the past three years, only 14 using modern horizontal drilling and completion techniques. Of those, just eight have survived mechanical failures. Initial production rates are shy of celebration as yet, yielding roughly 100 to 450 barrels of oil equivalent (BOE) per day at their peak.
One of three active operators, Central Montana Resources LLC has a vested interested in the success of the play. Its near-500,000 acres in Petroleum, Garfield, Rosebud, Fergus, Golden Valley and Musselshell counties, acquired as a first mover in 2007, represent 100% of the San Antonio-based company’s portfolio. Steve Lipari, CMR chief operating officer, spoke at Hart Energy’s DUG Bakken and Niobrara conference in Denver in May, and detailed why the Heath deserves continued merit.
“It’s an interesting play firmly on the exploration side,” he said. “The play has a ways to go, but there is enough data to garner some excitement about the next step.”
Particularly, oil-in-place is estimated at 7 million barrels per section in the poorer parts of the field, to as high as 20 million barrels in the better parts. Add to that an average 30% oil saturation throughout, with an API gravity range of 29° to 36°.
The Heath is a Mississippian-age deposit in the Big Snowy group of the Central Montana trough. An “excellent source rock,” it sits above the Madison group and below the Tyler sandstone, from which 130 million barrels of conventional oil has been produced from Sumatra Field historically. The Heath, covering some 2 million acres areally, lies at a relatively shallow 4,700 feet depth, to 5,500 feet at the most. “The Heath was buried deeper at higher temperatures like the Bakken,” Lipari said, “and has been uplifted considerably.”
The rock is good, he said, with three distinct members. He describes the Heath “C” as the hot black shale member interlaced with limestone stringers, and is “the landing point of choice” of all active operators. This member is 50 to 60 feet thick at the core of the field, with total organic content of 2% to 20% and an Ro factor of 0.99. The Heath “B” above is up to 40 feet thick, a cyclic limestone and dolomite mixed with interbedded shales. Both are naturally fractured.
“All the oil-prone indices look good,” he indicated. Oil saturation ranges from 26% up to 55% in the best parts of the field. “No matter what depths we’ve attained cores in this play, it’s all about the same.” The better wells are located where the organic content is 50% or greater, he said.
Read the full story in the July 2013 issue of Oil and Gas Investor.
Recommended Reading
Green Swan Seeks US Financing for Global Decarbonization Projects
2024-02-21 - Green Swan, an investment platform seeking to provide capital to countries signed on to the Paris Agreement, is courting U.S. investors to fund decarbonization projects in countries including Iran and Venezuela, its executives told Hart Energy.
M4E Lithium Closes Funding for Brazilian Lithium Exploration
2024-03-15 - M4E’s financing package includes an equity investment, a royalty purchase and an option for a strategic offtake agreement.
Bobby Tudor on Capital Access and Oil, Gas Participation in the Energy Transition
2024-04-05 - Bobby Tudor, the founder and CEO of Artemis Energy Partners, says while public companies are generating cash, private equity firms in the upstream business are facing more difficulties raising new funds, in this Hart Energy Exclusive interview.
E&P Earnings Season Proves Up Stronger Efficiencies, Profits
2024-04-04 - The 2024 outlook for E&Ps largely surprises to the upside with conservative budgets and steady volumes.
First Solar’s 14 GW of Operational Capacity to Support 30,000 Jobs by 2026
2024-02-26 - First Solar commissioned a study to analyze the economic impact of its vertically integrated solar manufacturing value chain.