Limestone formations in northern Oklahoma being tapped for oil
BY ROD WALTON World Staff Writer
Friday, September 23, 2011
A mighty Mississippi is starting to flow in the middle of Oklahoma’s resurgent oil and gas industry.
This potential river of oil is within what is called “the Mississippi lime,” porous limestone formations in northern Oklahoma and southern Kansas. The liquids-rich region, considered tapped out by vertical drilling decades ago, is yielding reservoirs to horizontal operators such as SandRidge, Chesapeake, Devon and Tulsa’s own Eagle Energy LLC in the past two years.
“I think it’s probably the hottest play going in the country,” Eagle CEO Steve Antry said. “We’re producing 4,000 barrels of oil equivalent per day, which is nice.”
Certainly not bad for a company which formed only two years ago. Eagle holds about 75,000 acres in the horizontal Mississippi Lime trend stretching across several counties.
Others are betting big on this region which reaches as close to Tulsa as Osage County, attracted to the promise of an oil ratio above 50 percent. With natural gas prices fetching less than $4 on most markets, the “oily” Mississippi lime is sweet as Mississippi mud pie to the state’s producers.
The irony is that these “new” reserves actually lay slightly below formations which first produced big 100 years ago. Phillips Petroleum Co., for instance, made its name in the nearby Burbank Field, on the eastern edge of the play that includes Osage, Pawnee, Kay, Garfield, Woods, Alfalfa and other northern counties.
“It’s sort of amazing that all of this has been sitting there and waiting for horizontal drilling,” Antry marveled. “The vertical wells hardly drained any of that.”
The gas-rich shale plays first brought major producers back in the domestic fields 10 years ago or so. Names like Barnett, Marcellus, Haynesville, Bakken and Woodfern Cana became synonymous with unconventional drilling and revived U.S. energy reserves.
The move now is toward the deposits containing mostly oil and natural gas liquids. The Mississippi lime’s ratio is often 52 to 55 percent oil, according to reports.
“We’re into the second tier of this renaissance,” Devon spokesman Chip Minty said. “Now what we’re doing is taking the same technology beyond the shales to the carbonates, such as limestone.”
Tulsa-based RAM Energy Resources Inc. is certainly intrigued by the promise of the Mississippi lime, although it is currently focused on the chat formation just above that. RAM is spudding several wells into the chat on its Osage County concessions this weekend.
“Two years ago we began to investigate this play, as it’s the kind of thing that’s right up our alley,” RAM spokesman Robert Phaneuf noted. “It’s reasonably low-cost play where hydrocarbons have been found before, with a lot of wells drilled in the past. And that gives you good data points.”
In fact, the Mississippi lime formation of northern Oklahoma, which begins at around 5,000 foot depth on average, has about 17,000 vertical data points — seismic information, etc. — through the trend, Eagle’s Antry added. The growing number of horizontal data points now exceeds 500.
“You don’t need 3-D,” Antry said. “The nice thing about this trend vs. the shale is it requires low horsepower equipment.”
The limestone’s porosity and natural fractures also can mean less expense on the drilling and hydraulic fracturing parts of the project. Expenses can total half and even a fourth of typical unconventional well efforts.
And the results so far are looking good for one Tulsa producer. Eagle’s Longhurst 3H-34 well in Woods County is maintaining a two-week average of 2,076 barrels of oil and 4.2 million cubic feet in natural gas per day.
“It’s a monster,” Antry quipped.
Warning: The Mississippi lime infatuation is so new that some caution is warranted. Some experts see it as possibly hit or miss.
“There’s going to be sweet spots, but not everything will pan out,” Dan T. Boyd, petroleum geologist with the Oklahoma Geological Survey, said. “There are sports that are incredibly juicy and they are going to make a lot of money.”
Chesapeake jumped into the lime fast as a way of balancing out its natural gas-dominant portfolio in the wake of low prices. Devon also is making moves in that direction and curious to see how the Mississippi lime will compare with the shales and other generous plays.
“It’s a new venture,” Minty said. “We have a lot to learn and long way to go.”