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Drilling Westward: Exploration of the Barnett Shale Moves As Far West As Stephenville

Posted on: Friday, 17 March 2006, 06:00 CST

By Dan Piller, Fort Worth Star-Telegram, Texas

Mar. 17--STEPHENVILLE -- Jim Tuell stands at a just-completed well site south of Stephenville, now the westernmost outpost of exploration for the Barnett Shale natural-gas field.

Tuell, president of Infinity Energy Resources of Denver, has marked his spot and has something to prove.

"We're producing gas and selling it," he said. "That's what we came here to do."

If Infinity's first glimmer of success is expanded and replicated, then the Barnett Shale's western boundary will edge from east of Granbury and Weatherford to include a line of counties including Hamilton, Bosque, Somervell, Erath, Palo Pinto and Jack.

Right now Erath County is just a drop in the Barnett Shale ocean, producing 261.1 million cubic feet of the Barnett's 465 billion cubic feet total last year. Of that Erath total, 250 million cubic feet came from Infinity's drilling program that reached 13 wells this month.

Conventional wisdom among geologists and engineers -- and expressed daily in the barbecue shacks in the area -- has been that Erath County is a production disaster waiting to happen. Although Erath's Barnett Shale wells are shallower, around 4,300 feet deep versus as much as 8,000 feet in other parts, the shale here is less than a third of the 300- to 400-foot thickness found elsewhere.

Furthermore, the Barnett Shale west of Hood and Parker counties is thought to contain oil -- the eastern fringe of the famous Ranger, Breckinridge, Desdemona and Stephens County oil fields, some of which began producing during World War I and died out shortly thereafter.

The oil, for all its historic glory for Texas, is considered bad for shale because it clogs the rock's permeability, hindering the release of gas.

That's the conventional wisdom. Infinity is trying to rewrite the book.

"We produced about 200 barrels of oil a month from the gas wells, but we also produce gas," says G.D. "Jerry" Gentry, Infinity's vice president of operations. "We are confident that we can produce a profitable gas field here."

Infinity, with 40,000 acres under lease, isn't alone in Erath County. EOG Resources of Houston, Terax Energy of Dallas and Reichmann Petroleum of Grapevine also have lease positions and have begun to drill around Stephenville. Infinity also has an additional 30,000 acres under lease immediately south in Comanche County. It has been joined there by a big-time neighbor, Marathon Oil, which late last year acknowledged leasing in the area.

If each company makes the 1 million cubic feet per day average that wells in other parts of the Barnett have made, then the Barnett Shale will get the same kick that it got two years ago when word got out that Johnson County would be a hot play.

The Johnson County portion of the shale was for years dissed by engineers and geologists as impossible to drill because it couldn't be fractured properly. Johnson County wells, it was said, would produce water instead of gas.

But things change in the drilling fields. By the end of 2005 Johnson County was described as the "sweet spot" of the Barnett Shale by Aubrey McClendon of Chesapeake Energy. EOG Chairman Mark Papa was bragging about his "monster wells" in northern Johnson County.

So the skepticism about Erath County is tempered by the optimistic possibility that Erath and the other western counties will take their place in the Barnett Shale lineup. Jimmy Thomas, a Weatherford geological consultant, says "so far the production from Erath has been pretty dinky. You're in the oil window over there. But eventually, Erath can be a profitable area."

Papa of EOG says that based on early tests, "we think Erath will be not as great as Johnson County, just merely good."

Tuell and Gentry admit that their small company, which heretofore has worked the Rocky Mountain areas of Colorado and Wyoming, took its lumps with its first few Erath wells as they learned the tricks of the complicated shale formation. But they've also produced wells with respectable initial production ranging from 400,000 cubic feet per day to 1 million cubic feet a day.

Infinity is committed enough to have built a 15-mile pipeline gathering system, connected to pipelines that send the gas to a processing plant north of Abilene, in Shackelford County. Infinity has one rig drilling now with a second to be added later this year. By the end of 2006, the company hopes to have 25 wells producing in Erath.

"This is a process, we learn with each new well," says Gentry, echoing the sentiments of geologists and engineers throughout the Barnett Shale who emphasize that the Barnett is a so-called "technology play" dependent on technical skill rather than old-fashioned wildcatters' hunches.

The Erath County venture represents a return to Texas for Tuell, who lived in Hurst for three years in the early 1990s when he worked for Price Waterhouse's Fort Worth office. After auditing oil and gas firms, he decided to start one in his native Colorado.

But Tuell says that operating in Colorado can be a trying experience. Most of the land must be leased from the government, which makes operators more vulnerable to harassment from bureaucrats and environmentalists.

"Colorado is a different place to operate than Texas, both economically and culturally," says Tuell, measuring his words carefully.

So when he became aware of the rise of the Barnett Shale earlier this decade, Tuell became interested. He bought into the play in Erath County by purchasing leases that had been put together by a consortium.

"The core parts of the Barnett Shale, to the east, are leased up now," he says. "But we think there is ample opportunity to the west."

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Dan Piller, (817) 390-7719 danpil@star-telegram.com

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Copyright (c) 2006, Fort Worth Star-Telegram, Texas

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Source: Fort Worth Star-Telegram (Fort Worth, Texas)

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