With the crude to natural gas price ratio (crude in $/Bbl divided by gas in $/MMbtu) continuing in historically high territory many energy companies are looking for more opportunities to shift from producing cheap gas to producing premium-price oil. For that reason, one tight-oil play long in the background—the Tuscaloosa Marine Shale (TMS) in central Louisiana and southwestern Mississippi—is attracting new attention; particularly from drillers who think they’ve figured out how to deal with TMS’s challenging characteristics. But is TMS all its fracked up to be? Today we begin a new series on TMS with a primer on this 6.6 million-acre shale play that’s said to have seven billion barrels of oil in place deep below ground but only a stone’s throw from the pipeline networks and refineries of the Gulf Coast.
In Part 1 of the series, we examine TMS in detail, and consider all we know about the geological conditions that make the shale play both so promising and so challenging. We’ll also look at the mostly failed efforts made since the early 1960s to make drilling in TMS pay, why things may be different now, and who is out front in testing the play’s potential. In the next blog, we will examine what these TMS pioneers have drilled to date, what they’re learning, and what their plans are for 2014 and beyond. We also try to answer the questions of whether TMS has the potential to become the next Bakken—the best-known tight-oil play--and what it would take for that potential to become a reality.
TMS is a sedimentary rock formation several hundred feet thick and between 10,000 and 15,000 feet below the surface across a relatively narrow swath of central Louisiana and southwestern Mississippi (see Figure 1).
Tuscaloosa Marine Shale play (shaded area - click to enlarge)
Source: Louisiana State University’s Basin Research Institute
The dark gray marine shale within the formation consists of fine-grained, organic-rich sedimentary silts and clays deposited more than 80 million years ago along what is now the Gulf Coast. (The Eagle Ford deposits in South Texas were formed at about the same time, but they are closer to the surface--5,000 to 7,000 feet, typically—and the sediments washed down the Mississippi River gave TMS a different geological composition that could reduce the recoverability of oil from it.) A 1997 study by Louisiana State University’s Basin Research Institute estimated TMS has seven billion barrels of oil, and that may turn out to be conservative. Still, the depth and low permeability of TMS have scared off many a driller, as has the very thin layer within it that offers natural fracturing (and increased permeability). But as we’ll get to later, some companies active in TMS—EnCana and Goodrich Petroleum among them—recently have been successfully reducing drilling costs and, through increased use of sand, clay stabilizers and proppant, dealing with the softer rock and clay-like material in TMS that otherwise might self-seal and undo the “open-wide” effects of fracking (see Tales of the Tight Sands Laterals for more on hydraulic fracturing). Their efforts to improve the completion formula may increase the estimated ultimately recoverable (EUR) oil from TMS wells and, with that, the likelihood that TMS will emerge as a profitable and important play (see our The Truth is Out There series for more on drilling economics).