American Oil and Gas Reporter - May 2015 - 122

challenging, with fairly tight fluid windows
and steep dips.

Other Horizontal Plays
Crawley Petroleum, a long-time Oklahoma operator, owns some legacy acreage
in the SCOOP and STACK, but company
President Kim Hatfield says Crawley is not
drilling in either play.
"We haven't had a concentratedenough position to develop in a coherent
manner," he explains.
But Crawley is involved in another resource play. Hatfield says it is drilling
5,000-foot laterals in the Cleveland and
Tonkawa formations in Ellis and Roger
Mills counties in far western Oklahoma.
"It is an oil play," he states. "We have
taken a hiatus from drilling in the winter.
We can accomplish our drilling goals in
the summer and fall when weather isn't a
challenge. This year, that was a good plan."
Crawley has drilled 15 horizontal wells
in the Cleveland and 12 laterals in the
Tonkawa formation. Before drilling horizontally, Hatfield says the zones had been
drilled vertically without much success.
"You could make oil, but not make any
money," he quips. "Having laterals allowed
us to complete much more productive
wells. It changed the economics. We are
looking at 200,000- to 300,000-boe EURs
for these wells. They will make about
150,000 barrels of oil, and the gas is high
Btu."
One of the challenges of drilling in far

western Oklahoma, according to Hatfield, is the area contains habitat for the
lesser prairie chicken, which has been designated as a threatened species by the U.S.
Fish & Wildlife Service.
"We have started working around their
mating rituals," says Hatfield, who also
serves as regulatory and environmental
chairman for the Oklahoma Independent
Petroleum Association. "Of all the things
I have run up against in 35 years in this
business, this is the most unusual. I have
learned more about birds than I ever
imagined. It is unfortunate when I tell people the best news is it is not as bad as it
could be."
Hatfield says there are a number of
questions to be answered as the relatively new horizontal Cleveland wells age. "I
don't know how well we can produce laterals in later life," he admits. "All the traditional technology is based on vertical
wells and gravity separation where sand
settles to the bottom. There is no way to
diagnose those conditions in a lateral
wellbore. You can have a coffee can of
sand block the lateral, and you don't
know whether you are producing 10 percent or 90 percent of the lateral.
"Trying to clean out the horizontal section and lifting can be real challenges," he
continues. "The earliest horizontal wells
were dry gas in the Barnett. The liquidsrich wells are a different ballgame. We
have been doing this for only 10 years, so
this is still a very young technology." Ì

Magellan, PAA Unite For Saddlehorn Pipeline
TULSA-Magellan Midstream Partners LP and Plains All American Pipeline
LP have formed Saddlehorn Pipeline
Company, a 50/50 limited liability company, to construct, own and operate the
Saddlehorn pipeline.
The companies say the new pipeline will
span 550 miles and transport various grades
of crude oil from the Denver-Julesburg
Basin, and potentially the broader Rocky
Mountain area resource plays, to storage facilities in Cushing, Ok., owned by Magellan and PAA. An extension to Carr, Co., is
also under consideration for connection to
PAA's crude oil assets in that region.
"Aligning with PAA makes strategic
sense because of its significant marketing
and pipeline presence in this region,
adding further value to the pipeline project to deliver crude oil to the Cushing
hub," says Michael Mears, Magellan's
chief executive officer.
Greg L. Armstrong, PAA chairman and
CEO, comments that the project is "underpinned by ship-or-pay contracts with ma122 THE AMERICAN OIL & GAS REPORTER

jor producers in the area that protect the
investment.
"Moreover, this arrangement provides
us the opportunity to realize meaningful
upside to base level returns by shipping additional volumes associated with PAA's
marketing activities in the region," he continues.
Magellan and PAA confirm the project will cost between $800 million and
$850 million. Magellan will serve as
construction manager and pipeline operator. Subject to receipt of necessary permits and regulatory approvals, the Saddlehorn pipeline is expected to be operational
during mid-2016, the companies say. Ì

Coming In June

Artificial lift special reports, spotlighting the state of the art in technologies for horizontal wells with
multistage completions.

American Oil and Gas Reporter - May 2015

Table of Contents for the Digital Edition of American Oil and Gas Reporter - May 2015