HOUSTON—The Permian Basin’s Wolfcamp, Bone Spring and Spraberry formations are known for being top areas for horizontal drilling.

But there is another top formation that Michael Party, owner and president of Midland, Texas-based Beryl Oil and Gas, believes is overlooked for horizontals—the San Andres/Grayburg. With most operators already locked into their positions—now just swapping acreage amongst themselves or consolidating, the San Andres is among the formations left where $20,000 an acre isn’t needed for entry, he said.

“It is developed. … There are some really good results in places,” Party told attendees of Summer NAPE’s Business Conference on Aug. 21.
He referred to the Platang oil field, drilled by Monzano LLC and later sold to Steward Energy, in the Northwest Shelf/Central Basin Platform in Yoakum County, Texas. The field has produced 10 million barrels since 2014, he said. He also noted a rise in horizontal wells being drilled in the area.

But there are some risks.

“I think the problem with the San Andres is it’s not ubiquitous,” Party added before noting structural components aren’t really visible in this area. “The formation is, but the play isn’t everywhere. That play has some defining limits, and we’ve actually looked at it. We think there are some things that high-grade the areas you want to be in.”

 

In the San Andres, Party said, “You want to get rock that has 40-50% oil saturations. You depressurize it. You get the pressure down. The oil moves out, and these wells will develop some pretty good production profiles.”

Emerging Plays
Emerging plays like the Barnett/Mississippian is also getting attention with companies including Elevation Resources, Diamondback Energy, Occidental Petroleum and Exxon Mobil Corp. drilling wells in Andrews County.

“This is a play where you got to have geology matching the thermal maturity in the area,” he said.

Just above the Barnett formation is the Atoka, a smaller zone which has been drilled vertically in Midland County in the past. “I think as the Barnett gets wings, this one is going to come back,” Party said.

Midland-based Reliance Energy Inc. drilled a well in the Atoka in 2013 using gel fracs, and it has produced 229,000 barrels and 1.1 billion cubic feet of gas, he said. “With new technology and new fracks, that could be a play that comes out of the development of the Barnett because people are going to start seeing it when they drill through it.”

Bad news is that most of the acreage containing this play is already HBP.

“So, it’s going to be hard to get a position in it unless you own that position already,” he said.

Other notable areas include the Yeso Formation, which also contains the Paddock, Blinberry and Drinkard, in New Mexico’s Northwest Shelf. The Delaware Basin’s Yeso is the slope-to-basin equivalent of the Bone Spring and Spraberry/Dean. Concho Resources Inc. is among the area’s players.

RELATED: All Is Well In The Permian’s Yeso

“It has some legs on it,” Party said of Yeso. But development here is slow as focus remains high on bigger plays in the basin, he said.
Development continues in the Bone Spring, Spraberry and Wolfcamp.
Wolfcamp, located in both the Delaware and Midland sub-basins, leads the pack in terms of horizontals, accounting for 52% of all horizontals drilled, according to Party. The trio plus San Andres/Grayburg and Devonian account for nearly 90% of the horizontal wells drilled in the Permian, he added.

‘Geology Matters’
Party shared the insight during a presentation on the Permian Basin’s journey from conventional to unconventional. The basin, he said, was considered a “graveyard” in 1920, as operators found water but no oil and gas. But it has transformed, producing more than more than 4 million barrels of oil today.

Key to the success is geology.

“We can sit there and talk about the technology, the fracs, the horizontal drilling and everything like that. It’s useless without the geology,” said Party, who also serves as president of the American Association of Petroleum Geologists. “The geology makes the Permian Basin, and the technology helps us get the oil out.”

But there are also some geological features that drillers should approach with caution.

Party singled out the Grisham Fault in the Delaware Basin and shears near Martin and Dawson counties in Texas as examples.
“As you get near it the wells tend to have a lot more water associated with them on both sides of the fault,” Party said referring to Grisham. “You get some fracturing that kind of adds to that.”

In the Midland Basin, north of Martin County and into Dawson County, possible shears could impact how operations are carried out.
“The heat just hasn’t transferred across where shear zones possibly exist and you go from about a .84 to .64 RO value,” he explained. “So, you lose about a quarter of your heat when you cross that boundary. Wells to the north have performed poorer than the wells to the south.”

For those targeting the Spraberry, Party warned of sands while approaching the Horseshoe atoll, described by the U.S. Geological Society as an “arcurate mass of deeply buried fossiliferous limestone of Pennsylvanian and early Permian age” in the Midland sub-basin.

“The Spraberry picks up a lot more sands. You need a structural component to help those trap and be productive,” Party said. “They carry water, and you’re going updip to the north. ...Wells typically drilled in the Spraberry in the southwest corner of Dawson County will have very low oil numbers—like 5% or less of the volume.”

Onshore