[Editor's note: A version of this story appears in the July 2018 edition of Oil and Gas Investor. Subscribe to the magazine here.]

Is it déjà vu all over again for the Barnett Shale?

No, not the granddaddy of shale plays in the Fort Worth Basin. This new iteration is the overlooked Permian Barnett Shale.

The Permian Basin’s Mississippian and Devonian-era plays are seldom discussed in a room where Permian-aged Wolfcamp, Bone Spring and Spraberry absorb all oxygen. Yet the application of horizontal drilling and slickwater, multistage plug and perf fracks is creating a new economic Mississippian-era resource play, much the way similar completion techniques did in the Fort Worth Basin’s Barnett Shale over a decade ago.

The Permian Barnett is about good rocks, good science and good partners, according to Steven H. Pruett, CEO of private-equity-backed Elevation Resources LLC. Pruett outlined the company’s Andrews County Barnett program at Hart Energy’s DUG Permian conference in Fort Worth, Texas, in May.

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Elevation combined technical and management expertise formerly associated with Samson Resources, cooperation with the State of Texas University Lands System, and partnerships involving financial backers and neighboring E&Ps to initiate development of the Barnett Shale on the Central Basin Platform.

Elevation’s origins date to March 2013 and a $400 million funding round from New York-based private-equity capital provider Pine Brook Partners. The new company acquired Samson Resources’ Block 1 Andrews County assets in 2013, including six vertical Devonian wells with commingled Barnett production of less than 100 barrels per day (bbl/d) and 200,000 cubic feet per day natural gas.

Elevation took its cue from neighbors XTO Energy Inc. and EOG Resources Inc. (NYSE: EOG), which had been drilling marginally economic, east-west Devonian horizontals in the mid-2000s. Elevation opted to drill north-south horizontals to propagate fracks in an east-west grid, using sand, hybrid gels and zipper fracks.

A vertical test that flowed 8 bbl/d prompted Elevation to apply the horizontal concept to the lower Barnett Shale at 10,500 feet in 2016. Elevation partnered with neighbor Zarvona Energy LLC on the University Lands G 1-30#1H Barnett discovery, which exhibited a 90-day IP of 550 bbl/d and 2 million cubic feet per day (MMcf/d) of natural gas.

The shale is a stratified silica-rich play underlain by an impermeable Mississippi Lime barrier and capped by the clay-rich upper Barnett. The pay resembles the time coterminous Mississippian Meramec in central Oklahoma.

However, the resource play would not have come about without creative interaction with the University Lands System. Previously, individual E&Ps in the area had individual development contracts with University Lands based on conventional vertical plays. To make the resource play work, Elevation needed a longer drilling horizon. Elevation used 15 separate transactions to create a 23,400-net acre position in Andrews County. Meanwhile, University Lands encouraged a switch from a well count-based drilling program to a continuous footage program to encourage longer laterals. As Elevation consolidated acreage, University Lands rolled old contracts into a new extended master agreement.

University Lands revenues from Elevation’s properties rose from $50,000 monthly to more than $1.5 million monthly currently on 21 horizontal Devonian laterals and the seven new Barnett wells. The opportunity set has grown from an 80-well, structurally driven Devonian vertical play into a 200-location resource play that stretches across Blocks 1, 9 and 10 in Andrews County.

Elevation will transition from a one-rig Barnett science play into a two-rig developmental phase in the second half of 2018, involving pad drilling, closer lateral spacing and infrastructure development.

Science well costs range from $6- to $10 million and generate whole and sidewall cores, extensive petrophysical and mineralogical analysis, and geomechanics. Elevation chokes production during the first 90 days so that overpressured wells flow for a long time. The discovery is still flowing after 20 months.

Pruett estimates the Central Basin Platform portion of the Barnett spans a 60-mile fairway from Crane County on the south to north of Andrews County, with 40,000 acres actionable.

Watch for more Permian Barnett Shale news. Diamondback Energy Inc. (NASDAQ: FANG) will test the Barnett in its Limelight prospect southwest of Odessa, Texas, later this year, while Novo Oil and Gas LLC is working 18,000 acres prospective for the Barnett west of Odessa. Elsewhere, the Barnett and underlying Devonian Woodford Shale are an oily piece of Apache Corp.’s (NYSE: APA) Alpine High delineation efforts in the southwestern Delaware Basin.

For the Barnett Shale, sometimes something old can become new again.

Richard Mason can be reached at rmason@hartenergy.com.