Southern California's deep gas potential comes alive with active production.
Berkley Petroleum Corp.'s Berkley No. 1 well came on production at 9.8 MMcf/d of natural gas from the deep Miocene Temblor formation in the East Lost Hills area of California's Joaquin Valley and quickly ramped up to 13 MMcf/d and may climb to 20 MMcf/d.
That may not be a startling achievement in other places, but it's a landmark event in traditional oil country in Kern County, where the play has been in the works since 1998. In addition to high gas volumes, the well came on stream with 475 b/d of liquids and a flowing tubing pressure of 13,300 psi.
That pressure is a key reason it has taken this long to get the play working. Berkley was one of the partners in the first Lost Hills deep effort in 1998 when Bellevue Resources was the operator. The Bellevue No. 1 East Lost Hills well was only the fifth well to test the Temblor formation in the deep fold belt in the basin. But the formation looked good. The Temblor produces in other parts of the valley, and the deep basin has 2,000 ft (610 m) of Temblor formation with up to 85% net sand.
Armstrong Resources LLC of Denver, Colo., developed the prospect after reprocessing 1980s 2-D seismic.
The first well blew out in November 1998, sending a 30-ft (9-m) diameter column of gas, condensate and flame 200 ft (61 m) into the air. Although water intrusion - apparently from 2,000 ft (610 m) below the gas-producing formation - killed the flame after 2 weeks, crews couldn't completely kill the blowout for 6 months.
The well defied the best efforts of Boots & Coots and Halliburton, even after Halliburton brought in the biggest snubbing unit in the world to tackle the runaway well.
Finally, the companies had to bring in a Nabors deep rig on 70 trucks from Texas to drill a nearby relief well to dump mud and cement into the original wellbore. By the time they finally killed it, the well still was producing 10 MMcf/d and 400 b/d of condensate through a wellbore filled with ball bearings, rubber chunks and other debris designed to seal the wellbore.
Westminster Resources Ltd., one of the partners in the well, said the target was a seismically defined, fault-bounded anticline with potential reserves from 1 Tcf to 2 Tcf of gas.
After an assessment, the partners speculated the tight fold that was the drilling target formed the anticline and created a fracture system in the brittle sandstone. Those fractures caused the lost circulation and the high gas flow, but they also allowed water to travel up to the producing zone. California had never experienced a well that deep with those kinds of temperatures - 328°F (164°C) - and pressures. That made it difficult for Bellevue to anticipate the well's ferocity.
In the next step, the partners tried to convert the Bellevue 1-17R relief well into a producer, but downhole complications thwarted the attempt. Berkley will try to redrill to lower section.
Meanwhile, Tri-Valley Oil & Gas Co. tried its Ekho No. 1 well east of the Bellevue No. 1 but ran into more complications than it planned on in the lower wellbore.
News of the Bellevue blowout also encouraged Ivanhoe Energy to take positions in some 300,000 acres of leases, including a farmout from Aera Energy, and plan a massive 3-D seismic shoot.
Maybe Berkley group's delays weren't so bad, after all. With California's tight gas market, Berkley and partners Elk Point Resources Inc., Hilton Petroleum Ltd., Kookaburra Resources Ltd., Paramount Resources Ltd., Pyr Energy Corp., Richland Petroleum Corp., Trimark Oil & Gas Ltd., Armstrong Resources LLC and Westminster Resources Ltd. are getting US $12.60/Mcf for the gas.
Production from the new well is good news for the partners. They also are completing the Berkley No. 2 well on the same structure, about a mile and a half to the southeast. The Berkley No. 4, also on the same structure, was drilling below 14,000 ft (4,270 m) on its way to the Upper Temblor formation at press time with completion scheduled for early April.
The Berkley No. 3R is an exploratory well on a separate geological structure, but it has reached total depth near 20,000 ft (6,100 m) with several gas shows in the open-hole section of the well. Berkley set intermediate casing to 18,096 ft (5,519 m).
"With the anticipated successful completion of the Berkley No. 2 well, the previously announced redrill of the lower portion of the Bellevue 1-17R well and pending results from the Berkley No. 4 development well, Berkley expects that up to four wells will be on production in the East Lost Hills area by this summer," the company said.
Even with that optimism, the high price of gas is good for the companies, because these deep wells drain corporate treasuries at a rate of $8 million to $10 million per well. Although Berkley is involved in several high-return plays, the proving of the East Lost Hills prospect may be one of the major reasons for the hostile takeover bid by Hunt Oil Co. and the friendly takeover agreement between Berkley and Anadarko Petroleum Co., the most active driller in the United States.