TRENTON-BLACK RIVER

Vineyards entwine the gentle, rolling hillsides of New York's Finger Lakes region. Dairy cattle graze in the lush summer pastures, which in winter draw scores of cross-country skiers. Vacationers flock to fish and sail the clear, cold waters of Keuka, Seneca, Cayuga and neighboring lakes. It's a corner of the Empire State that has been far removed from the Oil Patch. The oil and gas potential of the Finger Lakes regions had been tested over many decades, but results were sporadic and mainly disappointing. Certainly, a robust industry did develop in counties to the west, where waves of wells exploited Devonian Onondaga and Oriskany and Silurian Bass Islands and Medina plays. Still, production from those traditional producing zones suffered their inevitable declines, and the New York industry was quiescent. In 1996, the state's entire production was just 18.2 billion cubic feet (Bcf) of gas and 309,000 barrels of oil, from about 9,300 active wells. Nevertheless, some still doggedly pursued exploration, and one firm especially focused its attention on the lightly drilled Finger Lakes region. Charleston, West Virginia-based Columbia Natural Resources (as of November 2000, a subsidiary of Merrillville, Indiana-based NiSource Inc.) had been engaged in deep wildcatting in the area since the mid-1970s. It had found some teasers, a faint taste of things to come. In 1985, the company drilled a prospect in Pulteney Township, Steuben County. The #21436-T Mark Evangelos reached a total depth of 7,961 feet, and was completed from the Trenton-Black River with an initial potential of 935,000 cubic feet of gas per day. The Evangelos discovery didn't cause a huge stir-it was isolated from existing infrastructure and it lingered shut-in, waiting on pipeline. It wasn't until 1995, when CNR decided to aggressively expand its Steuben County efforts, that the firm offset the Evangelos. Its #21625 Gray flowed a stout 3.2 million cubic feet of gas per day from the Black River, a herald of the considerable potential held by the Ordovician carbonates. CNR quickly followed that success with its #623088 Levandowski, #3623143 Pizura and #622302 Covert wells. It tied the field, designated Glodes Corners Road, into a pipeline in 1997. The secret was out. For in the Appalachian Basin, air drilling is common practice. Once a bit cut into a productive Trenton-Black River reservoir, gas thundered to the surface in stupendous volumes. Roaring well flares lit up the pastoral night skies, announcing far and wide that something quite unusual had been found. One well, drilled on a bluff overlooking Keuka Lake, caused a tremendous stir after residents flooded local fire departments with calls and questions about its immense flare. His peers credit Dick Beardsley, vice president of geology and geophysics for Triana Energy LLC, with being the individual responsible for cracking open the Trenton-Black River play. Triana, based in Charleston, was formed in early 2001. The independent focuses on exploration in the Appalachian Basin, specifically in the Lower Devonian Oriskany, Huntersville Chert and in the middle Ordovician carbonate section, at depths generally between 5,000 and 14,000 feet. Prior to joining Triana, Beardsley retired from CNR, where he directed the Trenton-Black River effort. "After reviewing the historical information, we saw potential for dolomitization in that part of New York, similar to Albion-Scipio Field in southern Michigan and Dover Field in Ontario," he says. Beardsley applied the dolomitization idea to seismic anomalies that he had observed in the middle Ordovician carbonate section. The play had lurked undrilled through more than a century of exploration for a couple of reasons: the existing seismic didn't delineate the features very well, and the anomalies were structural lows. To date, CNR has drilled 14 producing wells in Glodes Corners Road, which is a dolomitized feature about 7.5 miles long and 4,000 feet wide. Pay thickness is as much as 400 feet, extending in some wells from the Black River up into the overlying Trenton. The east-west trending field is truncated on either end by transcurrent faults. In documents it filed with the state, CNR reports that the north fault at Glodes Corners Road has roughly 130 feet of throw, and the south fault has 60 feet of throw. In 1998, two miles to the south of Glodes Corners Road, CNR discovered Muck Farm Field, another dolomitized feature in which it harvested four producing wells. The company has conducted a wide-ranging exploration program, drilling wildcats in Chemung, Cortland, Schuyler, Steuben, Tompkins and Yates counties. It presently operates 23 producing wells in New York State. Its current activity is in Erin Township, Chemung County, where it just tied the #624115 Monahan into a pipeline. That well is the easternmost producer in the play. At press time, CNR was drilling an offset, the #624536 Trimber. "For many years, CNR has taken a diversified approach to its drilling program," says Tom Blake, senior vice president of operations. "We have been in the forefront of the development of many of the basin's deeper plays, and we've been working on the Trenton-Black River for a long time." To date, CNR has drilled or participated in 67 wells in New York State; its success rate is right at 50%. The play is demanding, he notes: it requires extreme accuracy in siting of the wells, and just the right combination of geological parameters to yield a commercial field. "It's been a real learning curve to be able to predict where all the aspects needed for the creation of a reservoir come together." The play flares up Another firm, Pennsylvania General Energy Corp., based in Warren, Pennsylvania, was closely watching the CNR activity. The private company, founded in 1978, operates 700 wells in Pennsylvania and New York. PGE has grown through its own drilling efforts and through acquiring shallow production from both Quaker State and Pennzoil. PGE entered the Trenton-Black River play in 1998. "It's a seismically driven play. We looked at hundreds of miles of data to narrow down our preferred area," says Douglas Kuntz, development manager. The company concentrated on an aggressive leasing program in Chemung and Steuben counties, a good bit south of the Glodes Corners Road discovery. "We were paying $3 per acre at first, but prices quickly rose to $30 to $50 per acre," he says. Royalties of one-eighth are typical, and five-year terms are most common. PGE, acting as operator, formed a partnership with CNR covering about 50,000 acres. In February 1999, the companies drilled a test, the #1240 Jimerson, in the town of Hornby, Steuben County. The well was the discovery for Wilson Hollow Field. PGE now has seven producers in the field, and has just finished drilling the seventh well. In 2000, the Jimerson took the distinction of being the most prolific well in the entire state, producing 1 Bcf of gas in 12 months online, for an average production rate of 2.75 million cubic feet per day. The Jimerson find jazzed the industry-it was 25 miles south of the CNR development at Glodes Corners Road, and, at almost 10,000 feet, it was considerably deeper. The well was the talk of Appalachia. PGE has been extraordinarily successful in its subsequent Trenton-Black River efforts-it has yet to drill a dry hole in the play. Its next discovery was Quackenbush Hill Field, found with the #1323 Lovell well, in Big Flats Township, Chemung County. That accumulation now hosts four productive wells. The company has drilled an additional producer: the Corning Game Club in Cutler Creek Field, which is a separate find in the town of Corning, Steuben County. To date, PGE and CNR have invested $25 million in their partnership. PGE, which funds its activity from internal cash flow, is quite aggressive at turning its wells online. Out of its 12 completed wells, nine are already producing and three are waiting on pipeline. "We make our money by producing oil and gas," says Kuntz. "Our target is to have our wells online within a month of reaching total depth." PGE also prides itself with finding ways to boost its efficiency, always considering fresh approaches to problems. As part of that effort, it brought in a caisson rig, the type generally used for construction, to set its 26-inch conductor pipe to depths of about 100 feet. "The caisson rigs can do in one day what would take a big rig a week to do. At a dayrate of $12,000 for a big rig, the way we set our top hole saves us quite a bit of money and speeds up our activity." Because its previous oil and gas activity was so intermittent, infrastructure in central New York was essentially nonexistent. And, every step of the oil and gas exploration and production process was unfamiliar to the residents. "We've made it our mission to be a good neighbor, and to educate our landowners and the communities about what is happening in their midst." The Trenton-Black River drilling has also buoyed the local economies, which haven't all enjoyed growth as robust as that in the city of Corning, or in many other areas of the country, he says. PGE's gas is sold to local distribution companies and industrial customers, replacing some of the state's imports from other parts of the U.S. and Canada. And, for the most part, landowners are quite happy to lease acreage and even more delighted to receive royalty checks. In July, PGE distributed royalties of $2.2 million to its landowners from the escrow accounts for the first four producing wells in Wilson Hollow Field. "Hopefully, we'll be doing the same in the near term for Quackenbush Hill Field," he says. That project will be going through state spacing hearings shortly. At the same time, PGE intends to keep a rig busy, drilling both development wells and wildcats. "We expect to be active here for a long time." East Resources, based in Wexford, Pennsylvania, also quickly grasped the regional implications of CNR's early successes in the Trenton-Black River. "We purchased seismic covering central New York and took it to several experts in Ontario who had been playing Ordovician dolomite reservoirs in Canada for many years," says Terry Pegula, East Resources president. Those experts-geologist Bob Trevail and geophysicists Alan Leaver and Jim Rayner-gave the play their blessing. Indeed, they were intrigued enough to join the company, which decided to jump into the Trenton-Black River with both feet. Formed in August 1983, East Resources was primarily an Upper Devonian driller and producer. Through the years, the firm had drilled or acquired interests in 800 wells and 500,000 acres, mainly in Pennsylvania and southwestern New York. In the spring of 2000, it acquired the Appalachian assets of Devon Energy Corp., which had inherited the properties via its merger with PennzEnergy. East Resources added interests in 1,800 wells and approximately 700,000 acres to its portfolio with that buy, says Bill Fustos, vice president of planning and development. In early 1998, the company began leasing in Schuyler, Chemung and Steuben counties. It also brought Fairman Drilling Co. into its deal as a co-operator. Fairman, a family firm headquartered in DuBois, Pennsylvania, started business in 1947 as a drilling contractor. (Earlier this year, Fairman incorporated its drilling company as The Fairman Corp., while the investment entity remains Fairman Drilling Co.) "We've been a producer since the late 1950s," says Alan Fairman, vice president of administration, The Fairman Corp. "We operate more than 1,000 wells in Pennsylvania, including a number of deep wells." The East-Fairman group had acquired about 25,000 acres in the Trenton-Black River play when PGE drilled the Jimerson well. "After that, we started to lease and shoot seismic in earnest," says Fairman. By April 1999, East Resources and Fairman had 35 to 40 landmen working in central New York. "It was an easy land play, because most of the people we were leasing hadn't seen a landman in 10 to 20 years, and they were happy to do business with us," says Pegula. Abarta Oil & Gas, another private firm, was invited into the East-Fairman partnership three years ago. Pittsburgh-based Abarta operates and owns interests in oil and gas wells throughout the country. The three-company venture acquired 350,000 acres in the New York play, generally from south of Glodes Corners Road Field down to the state line. The partnership gained a great advantage with Fairman's participation, since that gave it access to rigs capable of Trenton-Black River drilling. The company had been slowly getting out of the contracting business, and had it not been for the developments in New York State it would already have switched completely to oil and gas production, says Fairman. Today, it supplies rigs only for ventures in which it owns an interest. "We have two rigs running in New York, and we have one smaller triple that we'd like to bring up to the play next year." The group's first discovery was in March 1999. The #1 Broz Unit, Veteran Township, Chemung County, flowed 30 million cubic feet of gas per day. The venture then drilled the #1 Whiteman, Catlin Township, Chemung County, flowing 12.8 million cubic feet of gas per day, and the #1 NY State Reforestation Area 2, Orange Township, Schuyler County, flowing in excess of 30 million cubic feet per day. To date, the partners have drilled a dozen wells. Eight are productive, two were dry holes and two are still being tested and may be sidetracked, says Pegula. The #1 Lant, in Veteran Township, gauged at 15 million per day at completion, is currently online, and four additional wells will be tied-in shortly. Of note, the ability to sidetrack wells has made a tremendous difference in success rates in the play. Operators have found that reservoir qualities can be greatly improved in lateral distances as little as 400 to 500 feet. In what has become a fairly routine procedure, a near-miss Trenton-Black River well is usually kicked. "We're spending $2 million per month on seismic, drilling and leasing. We and our partners have already spent about $15 million in southern New York on land, leasing and seismic efforts, and $11 million on drilling, completion and pipeline work," says Fustos. For the remainder of the year, the companies expect to be drilling and completing a well every six weeks with each of the two Fairman rigs. "For the next year at least, our plans are to drill wells continuously." Still, people shouldn't be misled by the high success rates in the Trenton-Black River to date, cautions Pegula. "This is exploration: sometimes the targets are productive dolomite reservoirs, but other times the dolomites are tight, or they are full of salt water, or there isn't any dolomite at all, only limestone. We've had surprises, both good and bad." Wild and wonderful Its successes in New York emboldened CNR to test some West Virginia prospects it had long carried in inventory. In the early 1970s, the company was in a joint venture with Exxon, and the partners had developed several ideas. In 1975, Exxon drilled one of the state's most famous wells, in Jackson County. The #1 McCoy reached a total depth of 17,680 feet within the Rome Trough. The multimillion-dollar well was completed from the Conasauga sandstone at 14,538 feet; it also recorded shows in the Black River. Exxon drilled several deep wells before it eventually dropped out of the play. But, CNR was patient and kept its ideas about the Rome Trough's potential simmering on the back burner. Finally, the time seemed right to drill deep again. In March 1999, CNR startled the industry when its #20097 Frederick C. Parker flowed 50 million cubic feet per day from Trenton-Black River. The massive well had a shut-in tubing pressure of 5,750 psi and a bottom-hole pressure of 6,600 psi from an openhole interval between 9,797 and 10,271 feet. The well was connected to a pipeline at a flowing rate in excess of 7.4 million cubic feet per day. According to state production records, the well made 343 million cubic feet of gas in 1999, in only four months online. CNR followed that discovery with a chain of successes, drilling producer after producer. To date, the company has drilled 17 deep wells in West Virginia. The only other operator to drill wells in the play is Martin Twist LLC, a private firm based in Louisville, Kentucky. Two Twist wells, one in Roane County and one in Jackson County, have been drilled by contractor Boggs Natural Gas. Results of both are still confidential, but field reports indicate Trenton-Black River gas was encountered in each. The most prolific area has been Cottontree Field in Roane County, the site of CNR's initial discovery. It now hosts eight successful wells. Producers have also been drilled in Putnam, Kanawha and Lincoln counties. At press time, wells were being drilled in Braxton, Roane and Jackson counties. No question, West Virginia is hopping. Certainly, a proliferation of Trenton-Black River or deeper permits has stunned many observers. At press time, more than 160 such wells had been permitted since 1999, in 16 counties. Actually, a good bit less than that number will be drilled. The permit flurry has been caused by the state's unique rules. In West Virginia, an operator must have at least 14 acres to drill a well deeper than 6,000 feet or the top of the Corniferous. Once a well is permitted, no one can drill a well to an equivalent depth within a 3,000-foot radius of that location. Permits are good for two years. Nonetheless, many companies are quite serious about their intentions. Even before CNR's discovery, other firms had been eyeing West Virginia. Kent Carter, president of Richmond, Virginia-based Carter Oil & Gas, had been intrigued with the deep potential of the Rome Trough for many years. The firm, formed in 1992, was busy in the Rose Run/Beekmantown play in Ohio when word of CNR's New York activity began to hit the streets. Carter, having been active in West Virginia since the 1970s, was aware of the McCoy well: "Exxon had a blowout in the Trenton at 9,000 feet in that well, and had also produced gas from deeper Cambrian sands that were overpressured." In early 1999, Carter formed a joint venture with A.W. Tipka Oil & Gas, an Ohio independent, to make a Trenton-Black River and deeper horizon play in West Virginia. The companies purchased 2,000 miles of existing seismic from Exxon, along with some additional data, and built a contract lease team. Eventually it had 20 landmen leasing in 13 counties. "Four months after we got started, CNR hit the Parker well. It blew everyone's mind." In the summer of 2000, Carter brought New York players Fairman and Abarta into the deal. The group has leased 90,000 acres on seismically defined leads, and generated 35 Trenton-Black River and deeper prospects. The partners are also in the midst of a 150-mile proprietary seismic program. "We're excited about the Trenton-Black River play for three reasons," says Carter. "First, there are multiple targets-below the Trenton-Black River, we have the St. Peter, Beekmantown, Copper Ridge, Conasauga and Rome sands. Second, the reservoirs are overpressured, which means we can expect above-average reserves. Third, we can use advances in seismic technology to lower our risk." Early next year, Carter would like to run West Viginia's first 3-D seismic survey over a 20,000-acre block that has multi-zone potential. "It's an opportunity to take a whole new look at an unexplored play right in the middle of the Eastern gas markets." Because the Trenton-Black River drilling is so different from the typical 6,000-foot West Virginia target, rigs capable of drilling the wells are not common in the basin. Fairman has bought a triple rig that it is readying for the group in its yard in DuBois; that rig will be headed to West Virginia in the fourth quarter. "We'd like to drill four or five wells a year in West Virginia," says Fairman. Separately, Fairman is also partnering with East Resources in West Virginia. By virtue of its purchase of Devon's Appalachian Basin assets, East Resources has interests in 350,000 acres in the state, says Pegula. Houston-based Cabot Oil & Gas is another player that is very active in the state, says Michael Walen, senior vice president. Today, the company is evaluating several hundred thousand acres in West Virginia. Last year, it shot 180 miles of 2-D seismic; this year it added another 200 miles. It has developed a number of prospects, and plans to drill four to five of those as soon as possible. "We are aggresssively shooting our Trenton-Black River acreage, and we're currently moving in a rig to drill our first test," says Walen. For its part, CNR plans to drill or participate in 40 Trenton-Black River wells a year, in both ends of the play, says Blake. "It's an aggressive program. We average about one well every six weeks in New York. In West Virginia, we'll keep two rigs busy and we may add a third later this year. "We have an extensive seismic database, more deep drilling experience than any other company, and an enviable acreage position in both plays," says Blake. "But, we're still learning about the Trenton-Black River. It's expensive, and it's tricky." Similar but different While the West Virginia Trenton-Black River play is a cousin to the New York play, the two are quite distinct. The plays share the same fundamental concepts, but they are differ dramatically in drilling costs-West Virginia wells cost twice as much because they are overpressured. Pressures in Appalachia are usually around 0.37 pounds per foot; the West Virginia Trenton-Black River reservoirs have pressure gradients in excess of 0.65 pounds per foot. An 11,000-foot well in West Virginia will set a company back $2.5- to $3 million. CNR's deep wells have ranged from 10,000 to 12,500 feet, says Blake. "We set pipe right on top of the Trenton, and it takes a triple rig to set the intermediate string. The blowout preventers have to be high-pressure and absolutely reliable, and we also use a manifold system to control flow." The Trenton-Black River also confronts drillers with lost circulation and high pressure at the same time, he notes. Furthermore, while West Virginia has enjoyed an extraordinary success rate on its initial exploratory wells, more problematic have been development wells. "There is more compartmentalization of the reservoirs in West Virginia, while in New York, once production is established it's fairly easy to offset it," says Beardsley. Another curious fact is that the West Virginia play appears to be fractured limestone, not limestone that has been altered to dolomite, says Ed Rothman, CNR chief geologist. "We were anticipating dolomite, but we just don't see it in West Virginia. There, we're playing basement faults in the Rome Trough, which is more fractured than other areas." To date, work in the state has centered in the Rome Trough, a failed rift system that contains as much as 24,000 feet of sediments. The feature is about 30 miles wide, and trends northeast-southwest through West Virginia, says Jim Wigal, Abarta geologist. Its northern end is unknown; many geologists believe it terminates somewhere in northern Pennsylvania. When the Rome Trough was forming in Pre-Cambrian time, rifting and growth faulting was prevalent. Through the Cambrian, all sorts of sediments were scalped off the growth faults and deposited in the trough. The feature holds thousands of feet of section that doesn't occur outside of its boundaries; all these layers lie below the Trenton-Black River. One explanation for the lack of dolomite in West Virginia is that dolomitizing fluids couldn't penetrate the many thousands of feet of Cambrian sediment that fill the Rome Trough. Conversely, in New York the Trenton-Black River sits within a few thousand feet of basement. "We don't see Rome Trough growth faults in New York, and we don't have an added sedimentary column there. The potential for production occurring below the Trenton-Black River is much greater in West Virginia," says Wigal. Certainly, the open flows recorded in West Virginia are several times higher than those recorded in the New York play. "There's a big range of potential reserves per well, and the reservoir size and number of wells will dictate the recovery," says Beardsley. Estimates vary from 2- to 3 Bcf per well to as much as 17 Bcf per well. "Volumetric calculations on the fields are phenomenal. The gas-in-place figures are comparable to ones that might be attributed to an Ellenburger reservoir in West Texas." Future directions Between the wells in New York State and those in West Virginia lies the great unknown of Pennsylvania. The Rome Trough, which is apparently responsible for the fracture-enhanced porosity in West Virginia's Trenton-Black River, continues northward into the Keystone State. Too, seismic anomalies similar to those producing in central New York appear to wander south of the state line into northern Pennsylvania. Obviously, Pennsylvania is the next frontier for the middle Ordovician play. Still, the state presents special problems, notes Beardsley. The Trenton-Black River plunges several thousand feet deeper in the Keystone State, meaning wells will have to reach to depths of 15,000 feet or more. Furthermore, dynamic forces are still present in the Silurian Salina salt section. Past deep wells that have been attempted by the likes of Mobil, Texaco and Amoco have struggled with casing collapse from the compressive forces in the salt. A few Pennsylvania locations have been staked, but none have yet been drilled. "A lot of people are considering Pennsylvania, and we're considering it too," says CNR's Blake. "The character of the reservoirs is unknown, and the wells will be quite a bit more expensive." One venture, announced in January, is taking a serious look at Pennsylvania. Talisman Energy Inc., Calgary, and Seneca Resources Corp., a subsidiary of National Fuel Gas Co., combined their forces to specifically target Trenton-Black River prospects. "We contributed to the venture nearly a million acres with potential for the Trenton-Black River," says James Beck, president of Houston-based Seneca. The holdings include 650,000 acres of fee minerals and 300,000 acres of leased minerals, mainly in northern Pennsylvania. Talisman, which has a wealth of experience drilling Trenton-Black River wells in Ontario, is evaluating the deep potential of the acreage; Seneca retained the shallow rights. "We wanted to partner with a company that really knows how to develop the deeper trends." Currently, Talisman is reprocessing existing seismic data, acquiring new data and identifying productive trends. "Our objective is to drill four wells by the fourth quarter of this year," says Beck. Gastar Exploration Ltd., Mt. Pleasant, Michigan, also sees enticing opportunities in the Trenton-Black River, says Victor Hughes, chief financial officer. "We have acquired more than 200,000 acres in West Virginia and Pennsylvania that we believe is right on the play." Thanks to its majority shareholder, private firm Geostar Corp., Gastar has access to a tremendous in-house seismic database and to geoscientists with extensive experience in the basin. Geostar owns a seismic acquisition company and a processing company that are very active in the region. "We think the Trenton-Black River could be a huge play, and we have the acreage and the talent to pursue it." Gastar expects to announce its first location shortly, he says. Indeed, although the Appalachian Basin hosts more wells than any other basin in the world, it still harbors some secrets. As yet another cycle of exploration sweeps through its hills and valleys, more surprises may await.