Wednesday, March 21, 2012

Oil industry's "big good wolves" in the Permian Basin - The Barrel

Who's afraid of the Big Bad Wolf?  Not the oil industry. In a twist on the Grimm's Fairy Tale, upstream operators are salivating over a few good wolves--and not the kind that chomped up Little Red Riding Hood, either.

 

Instead, these wolves being pawed by an eager crop of oil exploiters. They aren't furry, they're oily, and they're hot, in the trendy sense.  Red-hot.  They are buried under several distinct geological layers of earth and bear names like Wolfcamp, Wolfberry, Wolffork and Wolfbone.  

Just like the hungry wolf in the centuries-old fairy tale that first swallowed Red Riding Hood's grandmother and then Red herself, E&P operators are drilling these Permian Basin plays in West Texas and southeast New Mexico at an astonishingly rapid rate.

 

Meanwhile, normally no-nonsense analysts and geologists are having a field day with all the lupine references.  So here's the latest growl on what and where they are.

 

Industry really began its pursuit of the "wolves" based on the mature field known as Spraberry. That field was developed decades ago; its name was taken from the Spraberry Trend, found at depths of about 6,000-8,500 feet. 

 

That moniker was serviceable when Spraberry was the only producing horizon of the field.  But some years back, operators began to drill a little deeper there and discovered another formation below it: the Wolfcamp, at about 9,000-10,500 feet deep.

 

Some clever folks wanted to convey their production came from both the Spraberry and the Wolfcamp horizons, and creatively shuffled them into a single word, the Wolfberry. Sorta like the media did some years back in barking up the compound "Brangellina" to denote the Brad Pitt/Angelina Jolie pairing, or before that, "Bennifer" for the Jennifer Lopez/Ben Affleck attachment.

 

Wolfberry revved up industry's name-fusing engine. For awhile, concoctions arose such as the Strawberry (Wolfcamp + Strawn formation, located at about 11,000 foot depths), although that brew is no longer widely employed.

 

The "wolfy" names that have survived are blends of the Wolfcamp--which is found largely throughout the Permian Basin--with other horizons that are unevenly deposited in the area. 

 

For example, the Wolffork is located mostly in a "roughly potato-shaped" area spanning West Texas' Reagan, Irion and Crockett Counties, according to an analyst who did not want to be identified. It is strictly a Midland Basin nomenclature in the eastern part of the Permian, and denotes a melding of the Clear Fork (found just above the Spraberry) and Wolfcamp horizons.

 

Likewise with the Wolfbone play, the geological "bone" strata are peculiar to the Delaware Basin. They are situated where the western Wolfcamp meets the Bone Spring play, found in extreme West Texas and Lea/Eddy Counties in southeast New Mexico. There are three Bone Spring formations, and many operators are gnawing on them. Collectively, the Bone Spring formation is located immediately above the Wolfcamp in that area of the western Permian.

 

Whichever wolves underlie it, the Permian has steadily gained in popularity among oil operators in the last couple of years. According to a weekly drilling report by investment bank Global Hunter Securities, 186 rigs were operating in the Wolfberry last week, a figure that has held roughly steady in the last year and is up from 98 rigs in October 2010. Another 76 rigs were operating in the Bone Springs last week, up from about 45 rigs a year ago and 32 in October 2010, GHS said, adding 99 rigs last week were operating elsewhere in the Permian, up from 68 rigs a year ago and 53 rigs in October 2010.

 

While no one in the oil patch is afraid of the Permian's Wolves today, and the mounting volume of oil extracted there is no fairy tale, the original discovery well that launched the Spraberry field was situated on Abner Spraberry's land and drilled in 1943, according to Wikipedia.

    

That was nine years after Walt Disney featured the "Big Bad Wolf" nursery rhyme in the 1934 cartoon The Three Little Pigs.  The song was a hit during the 1930s.

0 comments:

Post a Comment