SAN ANTONIO—Karnes County, Texas, is not all about the Eagle Ford Shale, so says BlackBrush Oil & Gas LP COO Mark Norville. Add a little Austin Chalk into the recipe, and the well results get spicy—a kick up to 250% IRR.
The San Antonio private producer, who spoke at Hart Energy’s DUG Eagle Ford conference in late October, is co-developing the two zones along the Karnes Trough on four-well pads. Two wells are placed in the Eagle Ford at 300-foot spacing, and another two wells are staggered in the Austin Chalk zone above at 300 feet, each effectively separated by 150 feet in a “wine rack” pattern.
After a year on production, the Eagle Ford wells show estimated ultimate recovery of 740,000 barrels of oil equivalent (boe), while the Austin Chalk wells trump that at 890,000 boe EUR. Measured against $65 oil and $3 gas prices, the economics sing: 245% and 263%, respectively.
“In everything we’re doing, we’re combining the Eagle Ford and Austin Chalk,” said Norville, “which we feel the numbers show you should develop these two together in this region.”
BlackBrush holds 66,500 net acres in various regions of the Eagle Ford play, 239,000 gross, but is actively drilling at the northern end of Karnes County. The company was recapitalized in early 2015 by Ares Management.
While the Austin Chalk has produced some 838 MMboe historically in 40 Texas counties, Norville said the chalk is “basically still unexplored” where it overlaps the condensate and oil windows of the Eagle Ford Shale. “There is still a huge area that is untapped.”
Before the recapitalization, BlackBrush tested two short lateral wells at 800 and 1,700 feet each. In three years, the wells produced 110,000 and 234,000 barrels (bbl) of oil each, double the boe per stage of vertical wells previously.
In early 2015, BlackBrush drilled two long-lateral Austin Chalk wells with an average length of 4,200 feet with 19 stages and “Eagle Ford-style” fracks. Those wells had average IPs of 2,200 bbl/d and 3.77 MMcf/d, with average cums to date of 320,000 bbls and 750 MMcf.
“In the first 200 days, those wells are outperforming the short laterals, and we’re assuming right now about 90,000 boe per stage in the Austin Chalk.
Subsequent wells have tightened stage spacing to 225 feet from 300. Proppant loading has increased from 700 pounds per foot to 2,500, and from 90 bbls of water per minute to 100, using 100 mesh sand. The frack design has boosted EURs to 890,000 bbls per well.
“Both of these [Eagle Ford and Austin Chalk], at $50 per barrel, are in the 250% IRRs.”
BlackBrush currently is drilling or leaving uncompleted eight wells in the Austin Chalk on co-development Eagle Ford pads. Norville said the company makes up a quarter of the Austin Chalk production in Karnes County currently.
Downhole microseismic indicates “great connectivity” between the Austin Chalk and Eagle Ford Shale with the co-development, but he has concerns the results won’t be the same if the Austin Chalk were to be developed at a later time.
“If you go back at a later date, you could see problems with that fluid influencing the Eagle Ford formation. If you’re going to get the best of the reserves, you need to do it at the same time,” he said.
Norville additionally sees opportunity to co-develop the Upper Eagle Ford Shale as a third bench in a similar wine rack design.
Steve Toon can be reached at firstname.lastname@example.org.