A Houston company has hit a huge well in the Barnett Shale, a North Texas field described by one local energy research firm as "the hottest gas play in the U.S."
EOG Resources Inc., one of more than 100 oil and gas players active in the Barnett Shale, last week reported discovery of a well that produces a whopping 7.7 million cubic feet of natural gas per day.
EOG Chairman Mark Papa told analysts the "monster well" looks like the biggest found to date in prolific Johnson County.
Two other wells in the county are producing at initial rates of 7.5 million and 6.1 million cubic feet per day.
Proved discoveries and estimated reserves illustrate the enormous potential of the Barnett Shale.
The field already produces a cumulative total of about 1.2 billion cubic feet of gas a day.
The U.S. Geological Survey estimates there are 26 trillion cubic feet of natural gas equivalent in the Barnett Shale, although no one really knows how far the play extends.
Pursuit of such promising prospects has sent the rig count soaring from 30 in 2003 to around 100 today, with about 3,800 wells already drilled.
Record natural gas prices have added even more impetus to exploration activity in the prolific field.
Metroplex businessman Ross Perot Jr. is telling his fellow North Texas landowners that they may be "sitting on a gold mine.”
"The Barnett Shale is the equivalent of two or three Dallas/Fort Worth airports," Perot told a Fort Worth newspaper earlier this year.
Meanwhile, the field continues to get even more crowded.
Last month Shell Oil Co. became the first major oil company player as Houston-based Shell Exploration & Production Co. acquired a sizable stake in the Barnett Shale.
And in the past two weeks a pair of smaller independent producers-Dune Energy Inc. and Jay Petroleum LLC-joined the parade.
Houston wildcatter George Mitchell was the first to explore the Barnett Shale in the 1950s. The field loomed larger on Mitchell's radar screen in the 1980s when his conventional gas producing fields near Fort Worth were playing out. By the 1990s, Mitchell was successfully fracturing the shale and developing the field.
The Barnett Shale spreads beneath 10 to 15 counties, with Tarrant County as the epicentre.
The so-called core area consists of five counties-Tarrant, Denton, Johnson, Parker and Wise. The extension area to the west and south includes five additional counties.
Technology and economics have been the driving forces behind the ongoing spurt of exploitation.
Barnett Shale is an unconventional reservoir where gas and oil are locked in tight, low-porosity rock formations.
While the hydrocarbons are not deep at about 7,500 feet, extracting them requires high-pressure "fracturing" technology using water and sand or other compounds to blast the rocks open.
Fracturing techniques, along with horizontal drilling and record gas prices, have triggered heightened interest over the past five years.
Devon Energy Corp. of Oklahoma City, which purchased Mitchell's company in 2001, has by far the largest presence in the Barnett Shale.
Devon recently drilled well No. 2,000 in the giant gas field and currently accounts for more than 50 percent of production on more than a half-million acres the company has leased in both the core and extension areas.
EOG Resources also holds more than a half-million acres and has reported average net production of 50 million cubic feet a day this year.
In October, Shell acquired 25,000 acres of leases in Parker County and has signed an agreement to partner with Fort Worth-based Sundance Resources Inc. to drill on the acreage.
Dune Energy this week signed an agreement with Voyager Partners to acquire 95 percent of Voyager's interest in properties located in Denton and Wise counties for $68.3 million.
And last week Jay Petroleum, a subsidiary of Houston-based Isramco Inc., acquired 15 percent working interests in Barnett Shale acreage in Parker County for $2.1 million. The seller was Ness Energy International Inc., a publicly traded company based near Fort Worth.
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