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Devon: 20 tcf recoverable Independent plans 50 horizontal 2003 wells at Dallas/Fort Worth gas field Petroleum News Houston Staff
Big exploration and production independent Devon Energy is sitting atop an unconventional natural gas reserve of gargantuan proportions near metropolitan Dallas-Fort Worth in East Texas.
Barnett Shale, acquired in Devon’s acquisition of Mitchell Energy early last year, is said to hold an estimated 120 trillion cubic feet of gas, 20 tcf of which the company believes may be recovered. That’s the equivalent of 20 world-class natural gas fields.
The reservoir is a blessing in that the resource is ever present and therefore not subject to the geological complexities of more conventional natural gas reservoirs: hydrocarbon migration, traps and rock porosity and permeability.
The tight nature of shale reservoirs, however, does pose its own set of challenges, in particular the need for wide-scale hydraulic fracturing to create artificial permeability so that gas can flow freely.
However, it appears Devon has been up to the challenge. Since acquiring Mitchell, Devon has boosted Barnett Shale production to 500,000 million cubic feet per day from 375,000 million cubic feet per day.
Devon's number one asset Barnett Shale also has become the company’s number one asset, accounting for 13 percent of its entire oil and gas production on an equivalent basis. By far, Devon is the dominant player in the shale with 10 times more production than any other producer.
Devon CEO Larry Nichols said in a recent conference call that Barnett Shale has become “the crown jewel” of the Mitchell acquisition.
“Our plan could not have worked better,” he said of Devon’s decision to acquire Mitchell.
Devon, encouraged by the long-term outlook for natural gas demand and prices, has decided to step up activity at Barnett Shale, announcing in a May 8 conference call that it would put more rigs to work and drill five times more horizontal wells this year than initially planned. Horizontal well produced roughly twice as much as vertical wells.
“No one has completed horizontal wells and fraced them the way we do at Barnett,” Nichols said. “Over time the wells have performed very nicely. And we have concluded that we could do additional drilling without risk.” Company adding two rigs Specifically, Devon said it would add two rigs at Barnett Shale for a total of 16 rigs, six of which would be dedicated to horizontal drilling. And the company said it would drill 50 horizontals this year, up dramatically from the 10 originally planned. Seven wells already have been completed and produce an aggregate 15,000 million cubic feet per day, the company said.
Cracking the code on horizontal drilling in tight shales also is allowing Devon to expand outside its 210,000-acre core producing area and into relatively unexplored leasehold amounting to more than 335,000 acres.
Of the 50 horizontals planned this year, 20 to 25 of them are to be drilled on this acreage.
“The big story is outside the core area where we don’t have a frac barrier,” Devon’s Nichols said.
Devon believes 8 percent of the estimated 120 tcf of natural gas at Barnett Shale can be recovered using current technologies and maybe another 8 to 10 percent with advanced technologies. Based on reserve projects, Devon believes its core area contains in-place gas reserves of 46 tcf, leaving roughly 74 tcf on its remaining acreage.
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