Woodford shale play forms up in Oklahoma Anadarko basin
A play for gas-condensate and oil in the fractured Upper Devonian Woodford shale formation is emerging on the Oklahoma side of the Anadarko basin.
The Woodford shale, thought of until relatively recently as a source rock, has developed into a considerable gas producing formation in the Arkoma basin on the opposite side of the Nemaha ridge, and production is also emerging in the Ardmore basin.
Cimarex Energy Co., Denver, began assembling acreage about 18 months ago to drill the Woodford as a primary objective in the Anadarko. Cimarex said the play holds potentially 1.5 to 2 tcf recoverable to the company. Several other operators are believed to be pursuing or evaluating positions as well.
Cimarex amassed 50,000 acres in Woodford-prospective areas of central-western Oklahoma and in late October completed the acquisition of a further 38,000 net acres from Chesapeake Energy Corp. for $180 million. The acreage is in Blaine and Canadian counties.
Only $5 million of that transaction went for reserves, Cimarex revealed. It was the last large block to be acquired in its core area in the Woodford play, the company said.
Linn Energy LLC, Houston, announced the sale of its deep rights including the Woodford shale interval in certain central Oklahoma acreage to an undisclosed buyer on Oct. 10 for $229 million, subject to closing adjustments. That sale included no producing assets, and Linn Energy retained the shallow rights.
Continental Resources Inc., Enid, said it held 111,000 net acres in early November 2008 in the Anadarko Woodford shale.
Drilling progress
Cimarex, still leasing in the play, had participated in 28 wells by late October, of which 16 are completed and 12 were still drilling or being completed.
Drilling totals 31 wells by all operators, Cimarex said, and the other three wells were still being drilled in late October.
Continental Resources said it was drilling two operated wells in the play as of Nov. 6. The company holds a mix of acreage, some of which is held by production from other formations.
Other companies in the emerging play include Devon Energy Corp. and Western Oil & Gas Development Corp., both of Oklahoma City. Other companies appear to have HBP acreage and may be evaluating their positions.
Cimarex looks for the average well to recover nearly 5 bcf on 160-acre spacing with a 4,000-ft lateral. Wells with that lateral length have averaged initial production rates of 5 MMcfd.
Cimarex defines the Anadarko Woodford as occurring at 11,000-16,000 ft, where it is 120-280 ft thick, has 3-9% total organic carbon, good porosity and permeability, and gas in place of 145-195 bcf/sq mile. The Woodford represents “a big, multiyear drilling program in a play we like,” said F.H. Merelli, chairman, chief executive officer, and president of Cimarex. The company is already studying the desirability of downspacing to 80 acres.
Half of Cimarex’s 88,000 net acres is held by production from other formations, so the company is in control of development timing rather than being governed by lease expiration deadlines.
Well cost could moderate slightly from the current $8.5 million to $9 million, Cimarex said.
The company said it was dropping five rigs in the Texas Panhandle, but it expects to be running 9-11 rigs in the spring of 2009, up from five operated rigs in late October 2008.
While climbing learning curves on drilling and completion techniques in the Anadarko Woodford shale, operators will be deciding how far west they will be able to pursue the play given the economics. The formation plunges well below 15,000 ft as it trends westward toward the deep Anadarko basin trough.
