The Tuscaloosa Marine Shale: An Emerging Shale Play

Kirk Barrell
Amelia Resources, LLC, 6700 Woodlands Pkwy., Ste. 230316, The Woodlands, Texas 77382

PLAY HISTORY: Alfred C. Moore, a Mississippi wildcatter and geophysical engineer, worked up the first regional project targeting the Tuscaloosa Marine Shale (TMS), beginning in 1969. A former Sun Oil geophysical engineer, Moore sold it to colleagues at Sun Oil in 1970 for $25,000. In 1971, Sun drilled a well in Pike County, Mississippi, in which they cored 310 ft of the TMS. The well was plugged as non-commercial after perforating 24 ft of the TMS. In the mid-1970s, Callon drilled two wells in Tangipahoa Parish, Louisiana, with one resulting in some oil production. Texas Pacific established TMS production in the Blades #1 in 1977 and it eventually produced 24,000 BO over thirty years.

In the 1980s, Exxon and Amerada Hess both experienced blowouts while drilling through the shale in Mississippi. In 1998, UPRC established TMS production in the Richland Plantation #5 well that had an initial potential of 117 BOPD and 42 MCFGPD. The well produced 4000 barrels of 38.2 API gravity oil. In 1998, Worldwide Companies #1 Braswell 24 - 12 in Pike County, Mississippi, re-completed as the first horizontal well in the TMS. It produced 12,700 BO to date and is currently producing at a rate of 2 BOPD.

In 2000, Petroquest drilled the Lambert H - 1 as a horizontal well and had an initial potential of 54 BOPD and produced 11,600 BO over nine years. In 2004, Worldwide Companies drilled the #1A Spears well in Amite County, Mississippi, and produced 11,800 BO.

In 2005, Encore Operating initiated a large leasing effort across Mississippi and Louisiana resulting in the drilling of several wells. The Encore Joe Jackson 4-13H in Amite County, Mississippi, produced 25,800 BO over the first two years of production and has produced 28,800 BO to date. The Encore Richland Plantation #1 drilled a lateral length of 3100 ft and produced 10,700 BO. The Encore Weyerhaeuser #1 in St. Helena Parish, Louisiana, established the highest initial potential at that time of 323 BOPD, 1 MCFGPD, and 360 BWPD. The well has produced 27,000 BO.

In 2010, Devon Energy commenced a large lease acquisition effort across the TMS play. Encana followed, along with Goodrich Petroleum, EOG Resources, Indigo Minerals, and Justiss Oil. As of March 2012, Devon, Encana, Indigo Minerals, and Justiss Oil have drilled wells and are pursuing additional locations across the play.

The boundaries of the Tuscaloosa Marine Shale play are yet to be defined, but 7.4 million acres (11,500 square miles) could eventually be prospective for the shale. Drilling new wells and performing additional analyses will lead to the definition of the play boundaries and "sweet spots" where economics will define the full development of the shale.

GEOLOGY: The Tuscaloosa Marine Shale is early to middle Turonian in age (92 Ma) and was deposited during a major transgression during the Tuscaloosa "A" Sequence. The shale, a source rock, occurs above the prolific deep Tuscaloosa sands and averages 150-200 ft in thickness. The basal part of the shale is more siliceous and calcareous than the upper portion. The shale exhibits higher clay content in Mississippi in contrast to higher silica and calcareous content to the south in Louisiana near the Lower Cretaceous Shelf Margin. Structurally, the TMS exhibits monoclinal dip from Mississippi down into Louisiana. Once across the Lower Cretaceous Shelf Edge, more complex structures and faulting occur.

Geochemical evaluation reveals total organic carbon (TOC) in the 1.0-4.2% range. Resistivity is one well log parameter that exhibits variability across the play. Higher resistivities, averaging 7 ohm-m, exist consistently across the area of the Louisiana- Mississippi state line in Wilkinson and Amite counties, and West and East Feliciana, St. Helena, and Tangipahoa parishes. To the east in Washington Parish, resistivities are lower in the 2.5 ohm-m range. To the west in Rapides, Vernon, and Sabine parishes, resistivities average 3-5 ohm-m.

Resistivities in the Eagle Ford Shale of South Texas are much higher than those in the TMS mostly due to the abundance of calcareous material. Resistivities can be influenced by numerous factors and the reason for the variance in the TMS is still unknown.

SWOT ANALYSIS: Strengths—The TMS is a hydrocarbon source rock which makes it a prime candidate for hydraulic fracturing and horizontal drilling. The play area has secondary targets such as the Austin Chalk that balances risk. The shale has produced oil, covers a large geographic extent, and averages 150-200 ft in thickness. Numerous wellbores exist that have penetrated the shale. All of these factors combined indicate that the TMS is a worthy exploratory target.

Weaknesses—The TMS has unconfirmed rock properties including brittleness, effective porosity, and permeability. Currently, insufficient core data exist across the play to confirm whether the shale has reservoir quality attributes. This leads to unproven completion practices, production rates, and economics. Until these parameters are confirmed, the economic viability of the play is still unknown.

Opportunities—Despite a year of active leasing by several large industry players, acreage is still available and is priced at very low values compared to other U.S. shale plays. In addition, attractive royalty percentages assist with balancing the investment risk.

Threats—The main threat to new players entering the play at this time is that competitive leasing continues across the entire play by multiple parties.

DRILLING ACTIVITY: Since 2011, eight horizontal TMS wells have been drilled. As of March, 2012, seven wells are producing from completions in horizontal, vertical, and a horizontal re-entry wellbore. The most significant completion to date has been Encana’s Weyerhaeuser 73H #1 well with an initial rate of 784 BOPD and 309 MCFGPD. Encana’s Anderson 17H #1 well was drilled to a measured depth of 19,547 ft in 39 days. Encana is currently drilling the Anderson 18H #1 in Amite County, Mississippi, with a lateral length approaching 10,000 ft. None of the recent completions have produced long enough to determine a decline rate, type curve, or recoverable reserves. Seventeen wells are currently in the permitted or planning stages.

PLAY ECONOMICS: At this early stage in the play, economics are unknown. The first step is to establish a predictable drilling and completion cost. Devon and Encana have both reported that early wells will cost up to $15 million to drill and complete. It is believed, that once the play is in full "development mode", costs will range from $9-10 million per well. Without known initial producing volumes and decline rates, it is currently impossible to determine the economic viability of the play. Accurate prediction of estimated ultimate recoveries will occur after approximately 10-20 wells have produced for over one year and decline rates, hydrocarbon mix, and pressures are confirmed. Once this is established, meaningful economic scenarios and type curves can be generated.

AAPG Search and Discovery Article #90158©2012 GCAGS and GC-SEPM 62^nd Annual Convention, Austin, Texas, 21-24 October 2012