American Oil and Gas Reporter - PBIOS 2014 Official Program Guide - 138

Permian Basin Reports
one Leonard well with a partner, and has
tested the Spraberry. Its acreage also has
Cline potential, he indicates.
"We are moving forward to either sell
or do an initial public offering," Oestman
reveals.
He says the company operates one rig
continuously and is participating in two
other rigs. He adds Tall City will drill 20
wells in 2015, running two rigs most of the
year.
Oestman says Tall City has found
7,500-foot laterals to be the most efficient.
It is stimulating its wells in 200-foot
stages, which means there are 30-35 frac
stages per lateral.
"We are focused on execution," Oestmann claims. "We have drilled 16 wells
and all have come in under our cost estimate. That is a measure of efficiency. We
are happy with the experienced team we
have been able to put together."
Woodford Wet Gas
Houston-based Kerogen Exploration
LLC (formerly Kerogen Resources) has
been involved in black shale exploration
since 2006, and entered the Permian
Basin in 2013. Kerogen's focus, however,

is much different from many other independent operators in the basin.
John Van Fleet, Kerogen's Permian
manager, says the company has nearly
100,000 acres in the Val Verde Basin in
Terrell and eastern Pecos counties, an area
of Texas he describes as the "wet gas window" in the Woodford Shale on the Permian Basin's far southern end.
"We have interests in all potential pay
zones, including the Barnett, Strawn and
Ellenberger," he outlines, "but our primary
play is the Woodford Shale."
Historically, the Woodford has produced both oil and gas in the Permian
Basin, according to Van Fleet, depending
on location. He says Woodford Shale
wells have produced oil on the Central
Basin Platform and gas in the deep
Delaware Basin.
"Where it is shallow and cooler, the
Woodford converts to oil," he reasons. "As
depth increases, it converts to gas. The wet
gas window is between them."
Van Fleet says Kerogen drilled a vertical pilot to 14,400 feet, running "every
log known to man," and then drilled its first
Woodford Shale horizontal well to a total
measured depth of 19,109 feet. In August,

Kerogen was drilling a second well and
was waiting to fracture its first well, so Van
Fleet didn't have any production numbers
or the percentages of oil, gas and NGLs
produced.
Asked what makes the deep Woodford
Shale attractive, Van Fleet responds,
"Commerciality. The lower gravity oil generated in the Woodford doesn't flow very
well. You have to get the hydrocarbons out
of the matrix of the Woodford in commercial quantities. The wet gas is good to help
the well produce liquids. The combined
sales (oil, gas and NGLs) are more economic than oil or dry gas only."
He says he believes Kerogen can see
volatile oil and gas windows on its acreage,
and currently is focusing on the wet gas
window.
Van Fleet says Kerogen has used the
similar South Central Oklahoma Oil
Province shale plays as an analog for what
his company is trying to do in the Woodford Shale, adding Kerogen could drill up
to three more wells this year. He admits
there is a learning curve with every new
play.
"There are lots of things to be sensitive
to, from reservoir condition to regional
stress, and how much pressure and faulting, in addition to key geochemical parameters," he relates. "You have to test for all
things. It is more scientific than just
guessing. You develop an idea and then test
your hypothesis.
"I saw a T-shirt on a petrophysicist that
said, 'Yesterday's seals are today's reservoirs,' Van Fleet goes on. "Seals used to be
rocks that slowed the flow of hydrocarbons. Now, we expect them to be reservoirs. It is totally foreign from what we
used to believe. We used to drill through
the shales. We would get a gas kick, but
no one thought much about it. Now, we are
turning those shows into production." ❒

Home Of The Show
Kerogen Exploration LLC has nearly 100,000 acres in the Val Verde Basin in Terrell and
eastern Pecos counties, Tx., which Permian Manager John Van Fleet describes as the
wet gas window in the Woodford Shale on the Permian Basin's far southern end. He
says Kerogen is using the South Central Oklahoma Oil Province as an analog for its
Woodford Shale operations.

138 THE AMERICAN OIL & GAS REPORTER

In 1954, the PBIOS was moved
from Odessa's West County Park to
the Ector County Coliseum, which
has remained the oil show's home
ever since.

American Oil and Gas Reporter - PBIOS 2014 Official Program Guide

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