Gentlemen...This one may dwarf all of them:
San Angelo Standard-Times
URL: http://www.sanangelostandardtimes.com/sast/news_columnists/article/0,1897,SAST_4955_4591409,00.html
Texas' next big boom
Marfa Basin could produce oil or gas
By Perry Flippin, editor emeritus, pflippin@sastandard times.com or 659-8217
April 3, 2006
Wildcatters are chasing the next great natural gas bonanza - this time in the Big Bend region. Early signs suggest the untapped Marfa Basin could dwarf the huge Barnett Shale play around Fort Worth.
The Texas Railroad Commission, which regulates oil and gas production, reported that a small, McKinney-based company - Ascent Operating LP - has begun drilling a 5,610-foot well 10.5 miles northeast of Alpine.
A commission spokeswoman described the well as a wildcat, which means the operators don't know whether they'll hit oil or gas. Wildcats are outside of any producing field.
Another small company, The Exploration Company (TXCO) of San Antonio, has leased 140,000 acres of ranchland across eastern Presidio County and western Brewster County.
TXCO's president and CEO, James E. Sigmon, told investors last month that logs from deeper wells drilled in the Marfa Basin during the 1950s show the presence of natural gas in formations from 400 to 1,200 feet thick.
''These rocks look exactly like the Barnett Shale - except thicker,'' he said. Thicker formations signify greater production potential.
''It remains to be seen whether this will be as prolific as the Fort Worth basin.
''However, everything you've got today looks very, very promising.''
TXCO plans to spend about $50 million this year exploring for gas - 40 percent more than it spent last year. Wells, costing about $1 million each, will be drilled to about 17,000 feet.
In buying a $4.5 million drilling rig, he described TXCO as a small company that is poised to grow rapidly in the next few years.
Back in January, Texas Land Commissioner Jerry Patterson announced that oil and gas firms paid almost $22 million to lease about 43,000 acres of public land. The $510-per-acre average was the highest in Texas history.
Proceeds finance the state's public schools.
''The Texas oil and gas business is in overdrive,'' Patterson said, noting that some of the highest bids involve leases in Reeves and Culberson counties, 300 miles west of San Angelo.
For the first time in many years, upland leases brought much more revenue than offshore leases.
Robert Hatter, director of mineral leasing in the General Land Office, told me some Loving County leases went for $2,500 per acre. Comparable leases in the San Angelo area go for about $65 per acre.
''We're getting phenomenally high bonuses,'' he said, noting that most of a million acres in Culberson County have been leased, and most of a half-million acres in Reeves County.
''The big news is this Barnett Shale play,'' Hatter continued, explaining that operators are being secretive about details.
Despite Hollywood myths perpetuated in movies such as ''Giant,'' the region around Marfa has never produced much oil or gas. Rail commission records show that Presidio County produced only 11 barrels of oil in 2001. Since 1993, the county produced 2,406 barrels of oil.
In the same period, Brewster and Jeff Davis counties produced no oil or natural gas. Furthermore, the region lacks pipelines and other infrastructure to gather and transport gas to consumers. If the wells become producers, lots of labor and capital will be needed to install a pipeline network.
Now, with oil prices exceeding $60 a barrel and natural gas approaching $7 per thousand cubic feet, wildcatters are scrambling to the Big Bend region for another look.
''It's still very early in the game,'' said Paul Hart, TXCO's communications manager. ''It's definitely not a sure thing. We won't know until we drill.''
Hatter said that the oil and gas formations being explored are part of the Ouachita Overthrust, a 1,500-mile arc from Mexico, across Texas, eastern Oklahoma, and western Arkansas, to Mississippi and Alabama. The overthrust formed when tectonic plates collided at least 260 million years ago. That collision created the Permian basin.
The eastern end of the overthrust has produced prolific amounts of natural gas.
''Shale is a funny rock,'' Hatter said, noting that it must have porousness and permeability to be commercially developed. The Fort Worth basin required years to develop artificial fracturing techniques that enable gas to flow through the fissures.
Operators such as Anadarko and Chesapeake already have producing wells in the Atoka and Wolfcamp formations, which are shallower than the Barnett Shale.
''The Barnett Shale play is more risky,'' Hatter continued, describing southwestern trends in Reeves, Culberson and Hudspeth counties.
In Presidio County, ''Nobody is sure what those guys are looking at, but we assume a shale play in the Marfa basin,'' he added. ''It's going to be deep. Nobody knows how deep it's going to be.''
TXCO's Hart told me, ''What we're looking at is probably an initial exploration development program that would get under way in the second half of 2006.
''We feel this area has a lot of potential like the Maverick Basin did (near Del Rio).
''It plays to our strength of going to an unexplored area and using new technology to develop it.''
"And the Gates of Hell Shall Not Prevail Against It...."
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