High Hopes for the Tuscaloosa Marine Shale
According to an article in “Rigzone” today, Amite County, Mississippi lies at the epicenter of the Tuscaloosa Marine Shale. This is not new news as drillers have known about the formation for years and have penetrated it en route to deeper objectives. What is new is that modern fracing and horizontal drilling are now making the structure economically viable.
Rural, heavily wooded and dependent on forestry and a fading dairy industry, Amite County has been coping with an 8.5% unemployment rate. While it might be premature to call the recent upsurge in drilling activity a boom, it is certainly an upturn.
The Tuscaloosa Marine is a boomerang shaped structure which runs across Louisiana’s mid-section and into southern Mississippi. Louisiana State University scientists estimate reserves total 7 billion barrels. Although this has not yet been proven, if it turns out to be accurate, this would make it one of the largest fields in the U.S., on par with the Bakken/Three Forks formation in North Dakota with reserves of 7.4 billion barrels. To put this in perspective, the federal government estimates total U.S. reserves at 40 billion barrels.
Late last year drilling in the Tuscaloosa Marine began in earnest. Thus far more than 30 wells have been drilled. Estimates are that oil companies have already spent over $300 million to lease 1.7 million acres. However, it appears that this is just the beginning as Goodrich Petroleum plans to spend $300 million, primarily in Louisiana, and Encana Corp. anticipates a similar level of activity concentrating in Mississippi. Halcon Resources has recently acquired 307,000 acres and anticipates drilling 10-12 wells this year.
While the future appears bright, a key to profitability will be reducing drilling costs. However, operators are confident they can reduce average well costs from $12 million to $7 million through drilling faster and using the same drill site for multiple wells.
To read the article in its entirety, please go to www.rigzone.com/news/oil_gas/a/131854/Shale .