Frackin’ the Shale in Tuscaloosa’—Is TMS the Next Bakken? – Part 2

The potential for the Tuscaloosa Marine Shale (TMS) tight-oil play to become the next big thing in U.S. oil production is attracting exploration and production companies willing to put some money at risk in the hope of big payoffs. The TMS seems to have a lot going for it. The play in central Louisiana and southwestern Mississippi is said to have seven billion barrels of oil in place deep below ground but only a stone’s throw from the pipeline networks, terminals and refineries of the Gulf Coast. But succeeding in TMS requires overcoming the play’s challenging characteristics through nuanced drilling techniques and completion formulas. Today in the second part of our series on TMS we examine what the E&P pioneers have accomplished so far in drilling and production, what they’re learning from their experience, and what it would take to turn TMS’s potential into reality.

 

In Part 1, we examined the 6.6-million-acre TMS play in detail, and considered the physical and geological conditions that make it both so promising and so tricky. We also looked at the mostly failed efforts in the past to make drilling in TMS pay, why things may be different now, and who is out front in testing the play’s potential. TMS is a sedimentary rock formation several hundred feet thick and between 10,000 and 15,000 feet below the surface; the dark gray marine shale within the formation consists of fine-grained, organic-rich sedimentary silts and clays. 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). Still, some companies active in TMS have been reducing drilling costs and tweaking their completion formulas to better deal with the play’s softer rock and clay-like material. (see Tales of the Tight Sands Laterals for more on hydraulic fracturing). Those completion-improvement efforts 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).

The relatively small set of companies active in the TMS includes EnCana, Goodrich Petroleum, Sanchez Energy, and EOG Resources. EnCana and Goodrich, for example, each have more than 300,000 acres in TMS under lease. Goodrich and Sanchez in recent months have been expanding their holdings significantly, Goodrich through the July purchase of Devon Energy’s two-thirds share of leases on about 277,000 TMS acres. In August, Sanchez bought leases on about 40,000 acres—like the others, much of the acreage is in what has become the very active heart of the play: the state-border area between southwestern Mississippi and the Louisiana parishes an hour’s drive north of Baton Rouge (see Figure 1).

Figure 1 (Click to Enlarge) 

Source: Sanchez Energy (October presentation; aqua-colored line is the state border)

As in most plays, there is a significant learning curve in TMS as drillers come to better understand the characteristics of the formation, and what works and what doesn’t in maximizing a well’s output. Thanks to data-sharing agreements among the TMS players, the learning curve is shorter than it might otherwise have been. Key subsurface lessons learned from the nearly 20 wells drilled in the past two years or so include the benefits of longer laterals and completions enhanced with the increased use of sand, clay stabilizers and proppant—all to help prevent the softer rock and clay-like material in TMS from self-sealing (see Getting Proppant to the Wellhead for more on proppant materials). An executive at one company active in the play tells us that longer laterals increase the number of two-to-four-inch-wide fractures the wellbore passes through, and that laterals of up to 10,000 feet are the ultimate goal. “Lateral length will be very important [in TMS], as will zeroing in on the right amount of proppant,” he says, noting that while more proppant is needed in TMS than most other plays, “too much proppant will damage the formation.”

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