26 Jul 2011

CEL Chart 26/7/2011



On 15th of July 2011, BHP offer US$15.1b to acquire 100% of Petrohawk Energy Corporation who has 1,000,000 net acres in Texas and Louisiana

Source: Challenger Energy Website

Triple Crown

Overview

The Triple Crown Prospect is located in Edwards County, Texas (Figure 1).  The play is an extension of successful Canyon and Ellenburger fields which are located geographically to the north-west.  Over recent time development has been moving rapidly towards the Triple Crown prospect.
Triple Crown possesses three reservoir zones over 45,000 acres of leasehold.  It is estimated that there is 9 TCF of gas in place across this holding contained within three reservoir zones as outlined in the table below.
Figure 1 : Triple Crown Location
Challenger Energy completed drilling its first appraisal well on the structure in January 2011.  The well reached a TD of 7,431 ft and intersected gas charged zones in excess of 2,300 ft n total, which could produce conventionally, unconventionally or a combination of both.   A summary of the results from the well are provided in the following table.
The company is currently going through a rigorous review of the best completion techniques for the different zones prior to undertaking an extensive testing program.
Figure 2 – Triple Crown – Original Gas in Place Estimate

Geological Setting

A schematic of the play setting for the Triple Crown Prospect is illustrated below.  The first appraisal well was located high on the structure to ensure gas was intersected by the well.
Figure 3 – Triple Crown Ellenburger Structure
The Triple Crown Prospect is centred over a triplet of horst blocks.  Seismic data and subsurface control indicate that the lease block appears to cover substantially all of the potentially productive portions of these horsts.  This is important as in this region classic, large structural gas traps form in the Ellenburger Dolomite on top of horst blocks.
In addition, separating and flanking the horst blocks are equally massive grabens filled with multiple series of Lower Canyon Sands and unconventional zones. These sands are stacked turbidite fan deposits and form significant stratigraphic gas traps.  Across the area of the Triple Crown Prospect, there are several favorable depositional fairways of the Lower Canyon Sands.  Many of these sands are extensively developed throughout Edwards, Sutton and Val Verde counties.  Previous drilling in the prospect area has confirmed the presence of multiple Canyon Sands and unconventional zones, and modern log suites indicate significant zones in directly offsetting wells.
The Canyon Sandstones and Unconventional Gas plays have been combined and provide a single Hybrid play within the prospect area which consists of several conventional sands which are inter-bedded in a large unconventional gas zone.
The Canyon Sands in the prospect area were deposited in a similar environment to the Montney in Western Canada, and similarly consist of thick sands interbedded with finer-grained sands, siltstones and shales.  The Montney has primarily been developed via horizontal fracced wells drilled into the sandstones that are surrounded by unconventional zones.

Appraisal Well – Drilling Results

Canyon Hybrid Zone

The appraisal well intersected a 1,150 ft gas charged zone where very strong gas shows in the range of 2.5 – 10% were observed during drilling even whilst utilising a heavy brine drilling fluid.
The well intersected a number of gas charged Canyon Sands between 4,530 to 5,680 ft. This interval contains several sands which have the characteristics of conventional pay interbedded in a large unconventional gas zone.  The Canyon Sands in this zone are often over-pressured and have the potential to deliver gas at both the rates and volumes required to develop this property on a standalone basis.
Figure 3 – Hybrid Zone Gas Shows
The unconventional gas zone is a completely new discovery, and preliminary log analysis has indicated that it has all the required characteristics for a successful unconventional resource development.
The presence of conventional sandstones within the unconventional gas zone, potentially provides completion pathways for large fracture stimulations which may allow co-production of both targets at once.

Ellenburger

The appraisal well intersected:
  • Indications of gas throughout the section.
  • The actual top of the Ellenburger at 5790 ft MDRT, however there appears to have been a thrust zone in which the “top” of the Ellenburger was repeated three times.
  • Enhanced zones of log porosity and indications of permeability which may be related to open fractures and in some instances karst-related porosity development.
In particular, analysis of the mud, wireline and Formation Image logs indicates a 280 ft zone of fracturing, thrust faulting and increased log porosity coincident with a zone of lost circulation encountered whilst drilling (as shown opposite).  This zone provides all the ingredients that have come together in other prolific Ellenburger wells in the region.
At the time of drilling a large quantity of lost circulation materials (LCM’s) had to be pumped into this zone to regain circulation, and ultimately casing was set and cemented over most of this zone. These activities are expected to have filled the near vertical fractures identified in this section.
Figure 5 – Ellenburger Log
It is estimated that the gas in place within the Triple Crown Ellenburger prospect is 1.6 TCF.
The Ellenburger is a tight dolomite which has an inherently low porosity of 3-4%, it relies on the well intersecting sets of near vertical fractures to provide the primary production pathway from the reservoir to the well bore. The effectiveness of these fractures can be enhanced with fracture stimulation and acidisation. In recent times, the optimal method of producing from the Ellenburger in this region has generally been with horizontal wells, as the number of different vertical fracture swarms that are intersected is maximized.
Consequently, the company expects that the go forward testing program for the Ellenburger will incorporate the drilling of a new horizontal well, given the operational complexities identified with targeting the Ellenburger in the appraisal well.

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