AP NEWS

Drilling Down: Houston company develops expertise in shallow horizontal wells

December 21, 2018

A Houston oil company continues to develop expertise in drilling shallow horizontal wells near Seguin and Luling.

The Railroad Commission of Texas issued a drilling permit to Texas Petroleum Investment for a new horizontal oil well on its McLean lease about five miles north of Kingsbury in Guadalupe County. The privately held exploration and company is targeting the Luling-Branyon field of the Edwards limestone geological layer, which is roughly 2,100 feet below the surface in that part of the state.

Most horizontal drilling projects in the nearby Eagle Ford Shale drill down to vertical depths of 8,000 to 12,000 feet below the surface before horizontal drilling portion of the project begins.

With less time needed to reach a target field, horizontal drilling at shallower depths is considered to be cheaper than projects trying to reach lower geological formations. There is a trade off, however. Geological formations closer to the surface are less generally pressurized, meaning that oil and natural gas do not flow to the surface as fast as they would in well drilled deeper down. Some companies drilling shallow oil wells use water, steam or natural gas to stimulate them and get them to flow at higher rates.

Founded in 1989, Texas Petroleum Investment operates more than 2,000 producing wells in Texas, Louisiana, Mississippi, and Alabama. The company has filed for 12 drilling permits in Texas so far this year. All but one of the projects were for shallow horizontal drilling projects in either Guadalupe or neighboring Caldwell County.

The company’s 140 leases spread out in seven Texas counties produced more than 1 million barrels of crude oil, 580 million cubic feet of natural gas and 3,700 barrels of condensate in 2017.

Permian Basin

Rio Oil and Gas of The Woodlands is preparing to drill six horizontal wells on its Brown State and Expedition State leases in Reeves County. All six projects target the Phantom field of the Wolfcamp geological layer at total depths up to 22,000 feet. Funded by a $350 million private equity commitment from Quantum Energy Partners, Rio has operations in the Permian Basin, Mid-Continent and Ark-La-Tex regions.

The Woodlands-based exploration and production company has filed for 36 drilling permits so far this year. Rio produced more than 34,000 barrels of crude oil and 62.9 million cubic feet of natural gas in 2017.

Eagle Ford Shale

Teal Natural Resources is doubling down on its operations in South Texas. The Dallas startup filed for five drilling permits to develop five horizontal wells on three of its leases in DeWitt County. All five wells target the DeWitt field of the Eagle Ford geological layer down to a total depth of 13,400 feet.

Founded in May 2016, Teal is funded through a $125 million private equity commitment from Pearl Energy Investments And Natural Gas Partners. The company used part of the money to buy 52 leases from Houston-based Sabine Oil & Gas in January 2017.

Out of the 21 drilling permits the company has received since its founding, some 17 of them were filed in 2018. The company produced more than 275,000 barrels of crude oil, nearly 2.9 billion cubic feet of natural gas and 77,000 barrels of condensate in 2017.

Barnett Shale

There were no permit applications for horizontal drilling projects in the Barnett Shale of North Texas over the last week but there were four filings for vertical wells. TruTex Operating of Haltom City and Safari Resources of Brackenridge are preparing for vertical wells project in Stephens County. ABB Oil Co. of Wichita Falls and Brower Oil & Gas of Graham are preparing for vertical well projects in Archer County.

Haynesville Shale

Brooks Petroleum Co. is drilling for oil in a region of East Texas where most companies drill for natural gas. The Haynesville Shale is known as a natural gas play, but the Tyler-oil company received a permit to drill a horizontal well looking for oil on its Lake Ferrell Unit lease about 12 miles west of Jefferson in Marion County. The company is targeting the oil-rich Lake Ferrell field of the Pettit geological formation down to a total depth of 7,500 feet.

So far this year, Brooks has filed for 13 drilling permits — all of them in East Texas. The company produced nearly 496,000 barrels of crude oil and no natural gas on 61 leases scattered across six counties in East Texas in 2017.

Conventionals

Not everybody in the Permian Basin is using horizontal drilling. Midland-based Fasken Oil & Ranch received five drilling permits to develop five vertical wells on its Fee BK lease in Ector County. The five wells target the Spraberry and Strawn geological formations down to depths of 13,500 feet.

Founded in 1979, Fasken Oil & Ranch has received nearly 1,300 drilling permits since March 1996. The company has received 82 drilling permits so far this year with 65 of those projects listed as vertical wells and the remaining 17 as horizontal wells. The exploration and production company produced more than 4.2 million barrels of crude oil, nearly 28.2 billion cubic feet of natural gas and more than 840,000 barrels of condenstate in 2017.

sergio.chapa@chron.com

Twitter @SergioChapa

AP RADIO
Update hourly