WyoFile Energy Report

‘Cloud Fracking’ and lateral drilling awakens Powder River Basin oil

There’s a road-cut rock wall somewhere south of Casper exposing a chunk of Upper Cretaceous outcrop. It’s a large stack of thinly-layered sands and shale, and it isn’t exactly what a geologist likes to see as he’s driving down the highway — especially if that geologist makes his living finding profitable deposits of oil and natural gas.

Dustin Bleizeffer

“I used to think, ‘Man, what crappy rock.’ And it was, up until recently,” said Jimmy Goolsby of the Casper-based Goolsby, Finley & Associates LLC.

Traveling north from that outcrop of crappy rock, the Frontier, Turner, Wall Creek and about a half-dozen other Upper Cretaceous formations dive deep under the Powder River Basin in northeast Wyoming. It is here, in a region best known as North America’s most prolific coal field, that drillers have quietly set the stage for what could be a significant new oil play.

This year alone, the state has approved some 864 horizontal well permits in the Powder River Basin, spanning portions of Campbell, Johnson and Converse counties. Major operators are chasing oil (and some residual gas) using the continually advancing drilling and hydraulic fracturing — or “fracking” — technologies that have turned around a decades-long oil production decline in recent years.

“The Powder River Basin is going to be the best basin in Wyoming for producing oil,” Goolsby said on Tuesday in a special presentation (click here for a pdf) to the Wyoming Oil and Gas Conservation Commission and an audience of oil and gas industry representatives.

It’s never been a secret that a lot of crappy rock formations in eastern Wyoming hold a lot of oil. For decades, operators were forced to bypass those formations because they couldn’t muster commercial flows. But thanks to better drillbits, horizontal drilling technology, better seismic mapping, better muds and proppants (various sands and aluminum oxides to hold open cracks and fissures), and something called “cloud fracking,” operators are able to bust up these dense, inconsistent and generally crappy rock formations 13,000 feet below the surface to finally let loose a whole lotta oil.

This chart depicts the number of horizontal oil well permits approved by the Wyoming Oil and Gas Conservation Commission within the Powder River Basin in 2012. (click to enlarge)

Goolsby said the simplest explanation to the recent success is that operators have learned how to bust open rock and shale formations into smaller bits, and they can coax petroleum to flow through smaller and smaller cracks and fissures. Goolsby said one client recently completed two wells with horizontal wellbores stretching for 9,000 feet (a third well of similar proportion is just being completed this week). In each 9,000-foot lateral, the operator can perform up to 30 hydrofracks, including extra-intense “cloud fracks” that bust up the rock into tiny pieces.

Geologists like Goolsby were excited when the industry learned how to coax oil through a “pore throat” the size of a human hair. Now they’re pulling oil through pore throats as thin as soap film.

Goolsby says these technologies are quickly being applied to a number of legacy oilfields in the southern Powder River Basin, and it also will allow operators to expand drilling to the outer edges of these old fields where recovery was once considered marginal even under high pricing scenarios.

“We’re going to increase the size of those fields very quickly,” Goolsby said, adding that the high price of oil also helps in flipping these crappy rocks to commercial paydirt.

“Our technology is there now, if we’ve got the price,” said Goolsby.

Goolsby said operators are concentrating on deep formations in the Powder River Basin where there’s high pressure and, in some cases, where there’s natural fractures. It’s puts into play a large area of the Powder River Basin where a lot of infrastructure already exists from oil plays in the 1970s and 1980s. That’s a huge advantage over the so-called Niobrara shale oil play in the southeastern portion of the state where excitement over a potential drilling boom spurred a rush on leasing in 2010, but hasn’t produced a large amount of drilling.

That area south of the Powder River Basin is slower to come alive, in part, due to limited pipeline and road infrastructure, and where state officials are getting cranky about an increasing volume of flared gas that comes with the development of new fields.

Just to the north, operators can tap into an existing pipeline network. Devon Energy is just one of many players dipping their bits into the Powder River Basin in search of a new oil play.

“At this point its very early for us to express a lot of enthusiasm because we’re so early in the exploration,” Devon Energy spokesman Chip Minty told WyoFile this week.

But, Devon did recently complete a horizontal oil well here that yielded an average 1,100 barrels per day for the first week, “Which is an excellent IP (initial production) rate. We have no idea what the decline (rate) is or anything like that, so all we can say is that. I’d just caution everyone to take that for what it is.”

Goolsby credited the Enhanced Oil Recovery Institute (EORI) at the University of Wyoming for some of the advancements that help put the Powder River Basin back into the American oil play. David Mohrbacher is director of EORI, and confirmed that recent advancements specifically adapted to these tight shale formations really does put the Powder River Basin on the industry’s map. He said that, worldwide, the industry typically recovers only 30 percent of oil in place in any given reservoir through primary and secondary recovery, leaving a big target to go after in the future.

“A lot of these reservoirs (in the Powder River Basin) have produced for 30 or 40 years and what the institute does is see how we can produce more oil from these reservoirs,” Mohrbacker told WyoFile. And the focus isn’t just on fracking. The institute has high hopes of coaxing more oil from legacy oilfields throughout the state through the use of chemical flooding.

“Minnelusa reservoirs in the Powder River Basin are one of our (EORI’s) primary targets for use of ASP (alkaline solutions, surfactants, and polymers) chemical flooding. EORI has invested approximately $500,000 over the past three years to support work being completed by Prof. Vladimir Alvarado and his staff.”

Click here to download a pdf of the “Evolution & Revolution of Drilling Technologies & The Impact On Wyoming,” by Jimmy Goolsby, of Goolsby, Finley & Associates.

— Dustin Bleizeffer is WyoFile editor-in-chief. Reach him at 307-577-6069 or dustin@wyofile.com. Follow Dustin on Twitter @DBleizeffer.

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Published on November 14, 2012

  • Inky

    Then there’s that niggling little problem of what happens to the groundwater beneath those three counties, after it is fracked and chemically flooded to a faretheewell? In the coming years of drought (driven by global warming, which doesn’t really exist according to the fossil fuel industry), what water is going to be available to consumers, agriculture, etc.? And who will pay to clean it up for consumption, once the frackers and chemical flooders get done with it?
    Looks like that area is gonna be one BIG sacrifice zone, permanently damged for temporary energy supplies and profits.
    What a great deal!

  • http://www.powderriverbasin.org Shannon Anderson

    The big question is how much water is this all going to take and where is that water coming from?? 30 fracks takes a lot of water, something thanks to coal and coalbed methane and our arid climate we don’t have a lot of in the Powder River Basin.

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