People have drilled through the Bossier Sand in east Texas on the way to better targets for years, but a deeper disappointment gave Anadarko Petroleum Corp. of Houston an inside track to its best onshore property in the United States.
"Our initial test was for a deeper target that was not developed. We came back uphole and tried a completion in the Bossier. We got a good tease of production, about 600 Mcf/d of gas," said Rex Alman, Anadarko's vice president of domestic operations.
That tease was enough. The company studied the geologic potential of the tight gas sand, and the interest grew. Then it brought in some fracture stimulation techniques that had worked in tight sands in the Golden Trend in Oklahoma, and the interest grew to excitement.
"When we hit the 26 MMcf/d well, we were ecstatic," Alman added. That well, the Lancaster A-3 in Freestone County, came in at 13,377ft. Other recent wells have added to the company's prospects. The Burgher D-1 tested at 14.7 MMcf/d, the Lane A-4 tested at 1.1 MMcf/d, and the Burgher A-2 tested at 6 MMcf/d.
Alman pointed out those are good wells, but Anadarko is hitting more good wells in and around its Dew/Mimms Creek field surrounding the town of Dew, Texas, and straddling Interstate 45 between Houston and Dallas. The average well comes in at about 3 MMcf/d, declines over a year to about 1 MMcf/d, continues to decline to 300 to 600 Mcf/d and should continue to produce at that rate for 30 years.
One of the best features of this play is its predictability. Anadarko has drilled more than 130 wells in the play with only one dry hole. Production has grown to between 150 MMcf/d and 160 MMcf/d in mid-January. That solid performance allows Anadarko to standardize some approaches.
It started drilling wells on a turnkey basis. When it got the feel for drilling, it tried a day-rate job and beat the turnkey contractor's drilling time by 10 days. Now it drills all the wells on a day rate. It has 18 rigs working full time on the play. That helps make Anadarko the second most active driller in the nation, after The Coastal Corp.
The marine-deltaic and debris-flow sands deposited on a shelf environment make the producing formation visible and dependable. Gas is trapped in the tight sand, so the development process is "playing the shelf," Alman said.
That, literally, has widespread ramifications. Anadarko and other companies are looking for other segments of the shelf with similar deposition to Freestone County. Anadarko already has expanded its holdings in the play to about 90,000 acres, and the boundaries have expanded beyond the Freestone County line.
"We don't know the limits. We think it could extend for quite a ways," Alman said. Company officials are looking for extensions to the play.
Permeabilities in this play are in the microdarcys. That means the frac job is critical to recoveries. Anadarko uses a high-volume slick-water fracture with sand.
That tight sand explains why people kept drilling through the Bossier on their way to Cotton Valley reef prospects without stopping. The sand is so tight, operators got gas shows when they drilled through it, but the volumes weren't high enough to cause them to take a closer look.
The economics of the play look good as well. The typical 3 MMcf/d new well takes a couple of years to pay out, but it gives the company a project with a 30%-plus rate of return. Since that return is highly sensitive to cost, Anadarko built its own gathering system to save US $0.10/Mcf to $0.15/Mcf on pipeline transportation costs.
It plans to spend some $300 million on wells and infrastructure over the next 2 years.
Anadarko's success has brought other operators into the play. El Paso Energy is a partner on some Anadarko wells and drills others on its own account. Marathon Oil Co. is drilling, too.
For Anadarko, the play has been so successful that production volumes should overtake the Hugoton field in Kansas, which has been the company's production anchor for years.