A handful of oil and gas operators have embarked on a South Texas pilgrimage to pay homage to the Buda.

But the enlightenment they are seeking is not from Siddhartha Gautama, the original Buddha. Rather, their quest for awakening involves a fractured microbiotic carbonate known as the Buda limestone, which lies separated from the Austin Chalk in South Texas by the intervening Eagle Ford shale. The Eagle Ford is the dharmic source rock for oil and gas in both the overlying Chalk and the underlying Buda.

Like the Austin Chalk, the Buda is a naturally fractured limestone with low matrix permeability and very poor porosity. However, oil and gas can accumulate in economic quantities inside its natural fractures.

Thirty years ago, the Buda was an early target for operators around College Station, Texas, using a newly innovative completion system incorporating hydraulic fracturing and proppants.

Today, operators in Dimmit County, Texas, employ horizontal laterals to bisect Buda fractures. The Buda can provide oil and natural gas liquids (NGLs). But it also can provide rapid declines and large volumes of water. For the Buda to provide anything, the formation needs a healthy matrix of natural fractures. Those ingredients are found in northern Dimmit County, about 45 miles east of the Mexican border.

Interest in the Buda accelerated in June 2013 when Crimson Exploration Inc. and its 30% working interest partner, Riverton, Wyoming-based US Energy Corp., announced results for the Beeler #2H well: gross initial production on a 25/64-inch choke of 859 barrels of oil per day, composed of 761 barrels of oil, 56 barrels of NGLs and 253 thousand cubic feet (Mcf) of natural gas.

The well was drilled to a total measured depth of 11,013 feet, including a 3,700-foot lateral, and completed open hole, without hydraulic fracturing. Crimson later reported a 30-day rate of 797 barrels of oil per day.

Initial news about the Beeler surfaced during Crimson's first-quarter 2013 conference call. At the time, the well was involved in flowback operations. Crimson management later revealed the Beeler cost $3.6 million to drill and complete, or about half the cost of an Eagle Ford horizontal. This meant sweet-spot Buda wells produced superior economics to the better-known Eagle Ford.

Crimson quietly leased another 1,650 neighboring acres, bringing its holdings in the Booth-Tortuga Ranch area along the Zavala/Dimmit county lines to 10,140 gross acres. At press time in mid-July, Crimson had spudded a second well targeting Buda.

News of the Beeler coincided with the merger between Crimson and Contango Oil & Gas Co. announced in late April 2013. Post-merger, the new Crimson plans to spend $15 million in 2013 and $20 million in 2014 on the Buda, operating a single rig while living within cash flow.

Although regional oil and gas forums are buzzing about the possibilities, the Buda will not replace the Eagle Ford—or the Austin Chalk and Pearsall shale for that matter—as the next big thing. Rather, think of the Buda as a nice piece of low-cost, sweet-spot lagniappe for South Texas operators.

Crimson's Dimmit County neighbors include privately held Dan Hughes Oil Co., which previously completed the Heitz 302-3H in the Buda. According to Texas Railroad Commission records, the Heitz generated 236,000 barrels of oil in its first 11 months. San Antonio-based Sage Energy Co. has also completed wells in the Buda sweet spot, with the Mills #1H generating 959 barrels of oil per day and 541 Mcf of gas, and the Mills #2H producing 889 barrels of oil and 650 Mcf of gas per day.

But focus on the Buda sweet spot will grow, since several public companies have nearby holdings. Publicly held neighbors include newcomer Exco Resources Inc., which purchased 55,000 net acres from Chesapeake Energy Corp. in July 2013. The Eagle Ford portion of the transaction amounted to $680 million and included 120 wells producing 6,100 barrels of oil equivalent per day, none from the Buda, and 29 million barrels of oil equivalent in reserves. Additionally, Sanchez Energy is a new neighbor, following its $265-million all-cash purchase of Hess Corp.'s Cotulla acreage in March 2013. Sanchez plans to spend $75 million on 9.7 net wells in the Cotulla package.

What else should one know about the Buda? The name is commonly mispronounced. Locals in Hays County, Texas, the type locality for the Buda lime, pronounce it as be-you-da, an Anglicized corruption of the Spanish word viuda, or widow.

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