Spyglass Energy drills deep, possibly for helium, in Osage County
BY ROD WALTON World Staff Writer
Tuesday, December 11, 2012
12/11/12 at 3:55 AM
Local companies are major players in a thriving industry.
FORAKER - If something worthwhile is down there, nearly 2 miles deep into the volcanic rock, the brains behind Wah-Zha-Zhi No. 1 well are doggedly determined to find it.
So the drill string relentlessly works the drill bit like a jackhammer into the basement rock below all known sedimentary layers in this region.
A little more than a week ago the Spyglass Energy Group project hit basement rock, like granite, at about 4,200 feet. Now it's headed down to 10,000 feet, deeper than any other well in the area that included the Mississippi Lime trend.
"We're drilling into an unknown section of rock, but we do have scientific information that leads us to believe there's either hydrocarbons or helium there," Spyglass principal and geophysicist Charles Wickstrom said Monday at what he called the "historic" rig site northwest of Pawhuska.
"It's exciting," Wickstrom said, but he acknowledged the steep financial and geological challenges. "Granite is incredibly hard rock."
And the Wah-Zha-Zhi No. 1, some might say, is an incredible leap of faith. The Spyglass group is diving in uncharted subterranean territory, much like the oil industry pioneers did 100 years ago.
"This is a complete and total wildcatter," Justin Allison, project engineer for Spyglass, said during a field trip showing the drill site to Osage Nation representatives. "This is completely without precedent."
Spyglass, a small Tulsa energy producer, and its partners are spending millions on the deal, hoping to strike 10,000 feet later this month. The igneous basement layer proved a tough customer, however, giving up only 50 to 75 feet per hour and chewing up an expensive drill bit each day.
The drilling crew has found things that some might have to see to believe. Allison showed off a cup of countertop-quality granite cuttings, then later played a video of a mysterious element that tried to rise up in a cup when magnetized.
"It's impressive to me," said Sonny Abbott, a member of the Osage Nation's Mineral Council, which oversees leases, production and royalties that arise within tribal boundaries. "I think they don't know what they're going to find."
Wickstrom's team started working on the project six years ago, when three- dimensional seismic data was first developed on the lease. He later teamed with geologists from the University of Oklahoma and the Oklahoma Geological Survey to interpret anything the 3D-seismic data might show.
What they found were mapable reflectors indicating some sort of possible reservoir at around 10,000 feet.
"Spyglass is a very small company," Wickstrom said. "We rely on getting people smarter than us to come in and help analyze the data."
Wickstrom described this portion of Oklahoma as a known helium province. Helium, which can be pulled from natural gas production, is currently scarce and fetching about $80 per thousand cubic feet.
In other words, helium is nearly 30 times more valuable than locally produced natural gas at the wellhead.
"If we find helium, that would be wonderful," said Shane Matson, a Spyglass geologist on the project. "It's the ultimate."
Helium isn't just for party balloons. The element is used in magnetic resonance imaging, welding and cryogenics.
The project's backers also know that striking oil would be an awesome, historical find. However, Mississippi Lime is shallower in this area, at around 4,000 feet, so no previous drilling rigs have struck hydrocarbons at such a depth as 10,000 feet locally.
"I've never seen anything like it," said Everett Waller, Osage Chief John Red Eagle's liaison to the mineral council. "So much is at risk."
Waller expressed optimism about the well's ultimate payoff, whether it's sub-sedimentary hydrocarbons or helium or, who knows?
"It's here and I think we have decades to go" in getting it, he said.
The resources, once found, will generate huge revenues for the tribal shareholders, Waller added.
Spyglass Energy Group's partners on the Wah-Zha-Zhi include Murfin Drilling, Staghorn Energy and Mike Graves, also of Tulsa. Spyglass is owned by Wickstrom, Graves, and Tulsa-based Nadal & Gussman LLC.
Original Print Headline: Driller going deep
Rod Walton 918-581-8457
Charles Wickstrom (right), managing member of Spyglass Energy Group LLC, and Osage Nation Mineral Council member Curtis Bear walk from the historic Wah-Zha-Zhi No. 1 well Monday where drillers are searching for a helium province tens of thousands of feet underground in northwest Osage County, just south of Foraker. CORY YOUNG / Tulsa World
Drilling project manager Justin Allison holds granite from the historic Wah-Zha-Zhi No. 1 well on Monday. CORY YOUNG / Tulsa World
A ladder descends into the historic Wah-Zha-Zhi No. 1 deep well Monday in northwest Osage County. CORY YOUNG / Tulsa World