Goodrich Petroleum Corp. and other players in the Tuscaloosa Marine Shale are making excellent and rapid progress in defining the most productive area to drill in the oil-rich formation, according to the company’s chief executive officer.
So far, the most productive wells have been drilled in a 60-mile by 20-mile area that stretches from Tangipahoa Parish to Wilkinson County, Mississippi, Goodrich CEO Walter Goodrich said during a conference call with stock analysts and investors.
Those wells generated initial production rates of more than 1,000 barrels per day, Goodrich said.
In the past two years, 44 horizontal wells have been drilled in the formation. Twelve additional wells are either being drilled or completed.
The five largest players in the eastern part of the formation, which covers an area through the midsection of Louisiana from Texas into Mississippi, have about 1 million acres under lease in an area that covers 4,500 square miles, Goodrich said. Many more wells will be required to get a better picture of the production that the formation will yield in that area.
But data-sharing agreements with the other firms are helping everyone to refine their drilling efforts, he said.
Goodrich’s most recent West Feliciana Parish well had an initial production rate equivalent to roughly 900 barrels of oil per day. The SLC Inc. 81H-1 well was drilled to a depth of about 14,000 feet, making it Goodrich’s deepest so far in the formation.
The West Feliciana well was one of four the company highlighted in its second-quarter results. Roughly 96 percent of the well’s production was oil.
Goodrich had previously announced the results for the Beech Grove 94H-1 in East Feliciana Parish. The well’s initial production rate was the equivalent of 740 barrels of oil per day. The well’s 30-day production rate was the equivalent of 600 barrels of oil per day. About 90 percent of the well’s production is oil.
Two Amite County, Mississippi, wells had much higher initial production rates, equivalent to about 1,500 barrels of oil per day and 1,300 barrels of oil per day.
In 1997, LSU’s Louisiana Geological Survey Office estimated the Tuscaloosa Marine Shale could produce 7 billion barrels of oil. Data gathered in recent years ups that potential to 9 billion barrels, with drillers using modern technology and drilling techniques to systematically get a feel for developing the formation.
Goodrich officials have said previously that the formation has some advantages over the highly active Bakken shale in North Dakota and Eagle Ford in Texas, where oil accounts for 87 percent and 85 percent of production, respectively vs. the 90 percent-plus in the Tuscaloosa.
Other Tuscaloosa advantages include lower royalty rates and lower severance taxes in Louisiana and Mississippi; a higher-quality crude that fetches a higher price; and low transportation costs.
Goodrich has more than 300,000 acres under lease in the Tuscaloosa Marine Shale. The company has said it plans to drill 32 wells in the formation this year.
Goodrich spent more than $70 million in the formation during the second quarter. The money went for drilling and completing wells and extending leases.
Goodrich expects to spend more than $325 million on its TMS drilling program in 2014. But the company could boost that total through joint ventures with other companies.
The company recently began seeking potential partners, Goodrich said. The company expects to have a partner, if not an agreement, in place by the end of the year.