PetroQuest plans oil exploration in Avoyelles
Lafayette-based PetroQuest Energy is investing $8.75 million to secure leases in Avoyelles and neighboring Pointe Coupee parishes to drill wells into the Austin Chalk formation running through this area.
An oil industry source said other companies are also planning to lease land in Avoyelles for oil exploration.
PetroQuest has acquired interests in 24,600 acres in Avoyelles and Pointe Coupee parishes, which the company said will provide years of drilling prospects. PetroQuest sold some of its water disposal assets in East Texas to raise most of the money to pay for its Austin Chalk venture.
The company plans to drill its initial horizontal test well this spring or summer, but did not indicate where in the parish the well will be located. The source, who asked not to be identified by name, said the Lafayette company is one of several companies leasing land and possibly drilling for oil in Avoyelles and the surrounding parishes.
“Not only are the companies currently leasing land, several are planning to drill for oil in the coming months,” the source said. “You could see significant drilling in the area, even more than was expected just three or four years ago. It could be an exciting time in the parish if it all comes true.”
The Austin Chalk formation stretches from Texas across the midsection of Louisiana.
Companies, including PetroQuest, believe hydraulic fracturing, called “fracking,” will allow “a substantial uplift in recoveries” from the formation compared to “unfracked” wells in the Austin Chalk.
PetroQuest compared the results of 22 fracked wells with hundreds of unfracked Austin Chalk wells in Karnes County, Texas. The average recovery per fracked well in Texas was the equivalent of more than 600,000 barrels of oil, a 500 percent increase over unfracked wells.
“We are excited to have an early, first-mover position in this emerging oil play right in our backyard at a very attractive cost,” PetroQuest President/CEO Charles T. Goodson said. “Based on recent well results in the area of our acreage, as well as in south Texas, the application of contemporary horizontal drilling and fracking is showing a material impact on resource recovery from the Austin Chalk formation, which has produced over 1.3 billion barrels of oil since 1902.”
Goodson said PetroQuest’s acreage “is expected to provide us with a capital allocation option to grow our oil production. These assets are ideally located with available takeaway options close to the Gulf Coast refineries and rapidly expanding options for natural gas liquids (NGLs) and associated natural gas that fit with our strategy to focus on assets near these key markets.”
PetroQuest is involved in exploration, development, acquisition and production of oil and natural gas reserves in the Texas, Louisiana and the shallow waters of the Gulf of Mexico. The unidentified source said leasing of the land started in Avoyelles and St. Landry Parishes and is moving into Pointe Coupee and Evangeline Parishes. He said the companies are optimistic of success in this area.
BEGAN LAST FALL
EOG Resources leased about 130,000 acres in Avoyelles, St. Landry and Pointe Coupee last fall and brought in its first well near Goudeau in late 2017. There have been no official reports from EOG, but people in the oil industry said the initial reports were good. The company has leases where the chalk’s oil lies 19,000 feet below ground.
EOG also conducted tests in the same East Texas county as PetroQuest’s sites. EOG completed 14 wells in the Texas portion of the Austin Chalk in the first half of 2017. The initial production rates for those wells averaged more than 2,600 barrels of oil.
A blog said the wells in Karnes County were “amazing,” with some initially testing at 9,000 barrels per day.
In a blog post on Seeking Alpha, analyst Nikolai Gouliaev estimated the initial investment for EOG's recent Texas Chalk wells at $4.6 million, and the return on investment at more than 200 percent.
Oil industry interest in the Austin Chalk formation, which runs across this area of the state, has resulted in the purchase of 85,000 acres of leases for $87 million by an undisclosed U.S. company.
Amelia Resources President Kirk Barrell announced the sale of the leases on Jan. 3 and said the company, who has an office in St. Francisville, will announce a second large acreage package at the North American Prospect Expo in Houston on Feb. 5-9. However, Barrell has not revealed where those acres are located.
"With the rapid emergence of this exciting new play, this focused package of leases presents a large new player an excellent acreage foundation to build upon,” Barrell said. “We are excited to deliver an operator to the play with significant experience in drilling and completing these same reservoirs in Texas."
In the oil industry, “play” is the term used to describe several oil exploration activities, including a geographic area with oil/natural gas-producing potential or exploration in a particular geological formation. “Frac” or “fracking” refers to the procedure of injecting water into the well to force oil out of the formation.