By June 6, 2011 0 Comments Read More →

Is Tuscaloosa Shale next big thing for oilfield?

By Kathrine Schmidt

HOUMA — A central Louisiana oil prospect made more accessible by new drilling techniques is getting buzz around the state and could create new business for companies in Terrebonne and Lafourche.

Geologists have estimated the Tuscaloosa Marine Shale — which spans central Louisiana and western Mississippi — could contain tens of billions of barrels of oil that could be tapped with the same horizontal drilling techniques that made a boom of the Haynesville Shale in north Louisiana. Companies like Devon Energy and Denbury Resources have snapped up hundreds of thousands of acres of leases in response.

“We have several clients that are very excited about it,” said Kenny Smith, CEO of the T. Baker Smith engineering and survey company. The firm is working on preliminary design and environmental work in the area, he said.

Once an epicenter of inland oil-and-gas drilling, that activity has dwindled in south Louisiana as reservoirs have been depleted and concerns have risen about coastal erosion. But south Louisiana’s oilfield abstractors, engineers, tool-rental companies and machine shops have picked up business in the Haynesville Shale as well as other fields like the Marcellus, Barnett and Eagle Ford.

“It will be a rush just like every other shale play,” says Dan Collins, an independent landman who works in Baton Rouge and has worked extensively with Tuscaloosa leases. “If it works, it will be much more of a rush.”

The price of crude oil, now trading at nearly $100 per barrel, is one factor. The Tuscaloosa Shale is one of only a handful in the United States that contains oil, Collins said. Other prominent prospects contain chiefly natural gas, but so much so that their exploration has caused a long-standing drop in natural gas prices, meaning a successful oil find could mean big money.

The Tuscaloosa is potentially even better for Terrebonne and Lafourche companies because it’s so close. It cuts across the center of the state from roughly from just above Baton Rouge to across the north shore, through parishes including East and West Feliciana, St. Helena and Tangipahoa.

According to a paper from Global Hunter Securities, an equity research firm, the Tuscaloosa Marine Shale is between 11,000 and 14,000 feet below ground, covers 3.7 million acres and is estimated to contain as much as 60 billion barrels of oil.

As early as 1996, LSU researchers estimated the find could contain as much as 7 billion barrels, but at the time the technology had not advanced to make it a moneymaking proposition. While the process of “fracking,” as it is known, gives new access, the Tuscaloosa play won’t necessarily be easy to exploit.

More mature shales are easier to plan and extract resources from, and oil is more difficult than gas, Collins said.

“It’s going to be as much of an art form as it is actual drilling and engineering,” he said.

Advocates for drilling in the area say that they face another delicate balance outside of the engineering challenges. The process of “fracking,” by which water and chemicals are pumped down oil-and-gas wells at high pressures to release the resources from the rock, has been coming under increasing social and political scrutiny.

Critics of the process say that chemicals or gases released by the fracking process or associated oilfield activity or missteps, like equipment malfunctions, lead to contamination of drinking-water supplies. They cite alarming examples, such as water from a faucet igniting with a match, as instances in which the process has gone wrong.

The practice has run into protests and public opposition across the country, particularly in the Northeast, and the White House has begun a 90-day study looking into the process.

The state is due to host a public hearing on the first use of the technique as early as June, the Associated Press reported last month.

Original Article

Posted in: LOGA News

About the Author:

The Louisiana Oil & Gas Association (known before 2006 as LIOGA) was organized in 1992 to represent the Independent and service sectors of the oil and gas industry in Louisiana; this representation includes exploration, production and oilfield services. Our primary goal is to provide our industry with a working environment that will enhance the industry. LOGA services its membership by creating incentives for Louisiana’s oil & gas industry, warding off tax increases, changing existing burdensome regulations, and educating the public and government of the importance of the oil and gas industry in the state of Louisiana.

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