Max Lease Oil & Gas Prospect Roger Mills County, Oklahoma
October, 2012
Prepared For:
Philmar Oil
737 NM 267
Portales, New Mexico 88130
Prepared By:
David E. Taff, CA PG, CPG
Consulting Geologist
819 10th Ave
San Mateo, CA 94402
Page 2 of 37
Prospect Summary: The Max lease is located in western Oklahoma within the prolific oil and
gas producing Anadarko Basin (Figure 1). The Max Lease contains multiple oil, wet gas and gas
pay zones for both conventional and horizontal drill techniques. Many of these pay zones are
under explored and under developed on and around the Max Lease. The three main targets are
the Pennsylvanian Douglas Group Douglas Sand, Tonkawa Sand and Pennsylvanian Kansas City
Group Cleveland Sand. The Douglas Sand and Tonkawa Sand are positioned less than 1,000
feet above the Cleveland Sand and represent a “stacked play” where three potential producing
formations are stacked on top of each other. Such a “stacked play” is virtually a field over a field
greatly increasing the opportunity to find and produce resources from two different reservoirs in
the same area of exploration. Another advantage of such a play is the fact that leases on the
shallower formation can be held by production when the lower formation is produced first. In
addition, a great deal of useful data can be gathered on the shallower target while exploiting the
deeper horizon. In many cases, the same wellbore can be used to produce the shallower zone,
amounting to a significant cost savings and minimizing the footprint of operations. In addition to
the three primary targets, 10 additional plays are possible hydrocarbon reservoirs and are listed
in Table 1.
Table 1. Additional hydrocarbon reservoirs available beneath the Max Lease.
Location: The Max lease is located in section 8, Township 16 North, Range 26 West, I.M.,
Oklahoma comprising 308.95 acres holding both surface and mineral rights. This lease is in the
southwestern part of the deep Anadarko Basin. Access to the Max Lease is excellent on mostly
paved and improved roads. If entering from the south, proceed north on State road 30 from exit
5 on Interstate 40 approximately 45 miles towards Durham OK. Turn left (west) onto county
road E810 for two miles, right (north) on county road N1700 for two miles, left (west) on county
road E790 until it comes to a end in 1.6 miles. An aerial photograph of section 8 with the Max
Lease outline is shown in Figure 2. Average elevation on the lease is 2,200 ft above sea level.
Page 3 of 37
Texas
Missouri
ColoradoKansas
NMAR
Max LeaseSection 8, T 16 N, R 26 W, I.M.Roger Mills, County, Oklahoma
Texa
s
Okl
aho
ma
Max Lease Outline
TX
MO
COKS
NM
Oklahoma
AR
DalhartBasin
T 16N
R 26 W
Figure 1. Max lease location and acreage position in Roger Mills County, OK.
Page 4 of 37
Figure 2. Max Lease outline projected onto Google Earth showing terminus of road access and
ground conditions.
Geology
Surface: The surface geology in the Max Lease area is generally Tertiary Ogallala & Laverne
Formations represented by dune and stream sediment deposits with Permian carbonate outcrops
exposed to the southeast and along the Canadian River drainage (Figure 3). General surface
exposures in the Max Lease area is utilized as agricultural ground.
Page 5 of 37
Figure 3. Partial Geologic Map of Oklahoma
Structure: The Anadarko Basin Province covers almost the entire western part of Oklahoma,
the southwestern part of Kansas, the northeastern part of the Texas Panhandle, and the
southeastern corner of Colorado. The province is bounded by major uplifts--the Wichita-
Amarillo Uplift to the south, the Cimarron and Las Animas Arches to the west, the Central
Kansas Uplift to the north, the Pratt Anticline to the northeast, the Nemaha Uplift to the east, and
the Southern Oklahoma fold belt to the southeast (Figure 4). The Max Lease area is classified as
part of the deep Anadarko basin with producing intervals greater than 6,000 ft.
Page 6 of 37
Figure 4. Major structural features surrounding the Anadarko Basin.
Sedimentology: From a broad shelf to the north and northwest (Hugoton embayment), the
sediments thicken southward into a northwest trending depocenter where they are locally more
than 40,000 ft thick. At the Max Lease location, sediments are estimated to reach 20,000 ft in
thickness (Figure 5). The deepest well penetration in the area immediately surrounding the Max
lease is 18,375 ft in the Cecil 1-4 where it recorded sediments from the Ordovician Viola
Formation.
Most strata range in age from Cambrian to Permian with some minor occurrences of Mesozoic
and Cenozoic strata in the northwestern part of the basin. Mississippian and older rocks are
predominately carbonates, whereas Pennsylvanian and younger rocks are mostly shales with
some sandstones. Although these sandstones comprise only a small part of the overall volume of
basin rocks, they account for much of the petroleum production in the basins.
Page 7 of 37
Figure 5. Sediment thickness map of the Anadarko Basin.
Sedimentation relative thickness and draping toward the basin depocenter is shown in Figure 6.
Page 8 of 37
Figure 6. South-north cross-section, Anadarko Basin showing estimated and very generalized
projection of the Max Lease at surface.
The number of sandstone reservoirs, relative to carbonate reservoirs, generally increases toward
the deeper southern part of the basin as shown in Figure 7.
Page 9 of 37
Figure 7. South-north cross-section, Anadarko Basin showing estimated and very generalized
projection of the Max Lease at surface. Note the sandstones (hence sandstone reservoirs)
increasing from north to south.
Oil and Gas Production: The eight oil and gas fields surrounding the Max Lease have
produced over 5 million barrels of oil and 850 MMCF of gas through February 2012 (Figure 8).
The Max Lease was most closely aligned with the Crawford NW gas field but Chesapeake
operating Inc. has completed oil wells in the Cleveland formation in section 3 within 1.25 miles
northeast of the Max lease and any Cleveland production from the Max Lease may be included
in that field.
Page 10 of 37
Figure 8. Partial from Oil and Gas Fields of Oklahoma Map (OGS 2002) showing cumulative
production of selected fields through 2012 for Oklahoma fields surrounding the Max Lease.
Note new field designated the Cleveland Oil Field immediately east of the Max Lease.
Drilling: Oil and Gas wells drilled in the immediate Max lease area are shown in Figure 9.
Figure 10 shows the producing formations, initial production and cumulative production where
records were available. All laterals in the area are drilled in a roughly north-south orientation
presumably perpendicular to the prevailing open fracture orientation.
Page 11 of 37
Figure 9. Oil and Gas well location map showing operator name, well name/number & TD.
Figure 10. Oil and Gas well location map showing initial and cumulative production and
producing formation.
Page 12 of 37
Reservoirs
Hunton Group: The Silurian Hunton Group is a significant oil reservoir on the northern
Anadarko basin margin, and a major gas producer in the deep (greater than 15,000 ft) Anadarko
basin. Basement highs form traps for reservoirs in the deep basin. The Hunton thickens from a
wedge edge on the basin shelf, near the Kansas-Oklahomaborder, to more than 1,600 ft in Roger
Mills and Beckham Counties, Oklahoma, in the deepest part of the western Anadarko basin.
According to NRG Associates, Inc. (1985 and 1986), porosity in Hunton reservoirs varies from 3
to 12% with an average value of 8.6% over a depth range of 9,000 to 19,500 ft.
Woodford Shale: The overlying Devonian-Mississippian, dark, cherty, organic-rich Woodford
Shale is both a source and a seal for the Hunton Group carbonates. The Meisner Sandstone, an
unconformity sandstone at the base of the Woodford Shale, is a secondary reservoir objective
and producer.
Mississippian Limes: The Woodford is, in turn, overlain by carbonates of the Kinderhook,
Osage, and Meramac Series of Mississippian age. Production from these limestones will tend to
be in oolitic facies with interbedded shale.
Morrow: Rocks of Morrowan age range in thickness from 1,200 ft in the eastern deep Anadarko
basin to 4,500 ft in the western deep basin. The section is mostly shale with sandstones deposited
during brief regressive phases of the overall marine transgressive event. Lower Morrow sands
appear to be marine shelf and shoreline deposits generally trending northwestward. Upper
Morrow sands appear to have been deposited in small, tidal-dominated, delta systems with their
sources to the north-northeast and west-northwest. The Morrow is reported as a mixed tidal and
nontidal influenced marine facies over most of the deep basin. No unconformity between
the Springer and Morrow is recognizable in the deep (below 15,000 ft) Anadarko basin and the
boundary between the Springer and Morrow is impossible to recognize in this setting. The felsic
quartz sands of these units are sparsely drilled at depth and are considered by many to represent
the most promising play for production of gas in the deep Anadarko basin.
13 Finger Lime: The Pennsylvanian upper contact of the Morrow with the Atoka is usually
easily picked out on logs because of the distinctive Atokan "Thirteen Finger limestone." The
interbedded organic shales and developed porosity limestones make this a potential “in place”
source and reservoir rock.
Atoka: The Pennsylvanian Atoka strata include a significant number of hydrocarbon-producing
limestone and sandstone reservoirs. The best reservoirs are sandstones entrapped and sealed
within organic rich shales.
Granite Wash: “Granite Wash” a catch-all term for many types of formations and a wild mix of
geology. In the classic interpretation, the Granite Wash came from wash or detritus off the
Wichita-Amarillo Uplift, producing grains (eroded granite) that settled into the tight formations
characteristic of the play. As you approach historic uplifts, things get a lot more conglomeratic.
Chesapeake has Granite Wash horizontal wells just across the border in Texas and the Cecil 1-4
Page 13 of 37
1.25 miles northeast of the max lease recorded Granite wash “A”, “B”, “E” and “F” zones
between 10,300 and 11,400 ft in depth.
Hogshooter: The Hogshooter Wash is like the Granite Wash target but shallower, younger and
more oil prone then other Granite Wash targets. Apache Corp has 2,000 BOPD discoveries
south in Beckham County, Oklahoma and has acquired acreage north into Roger Mills County to
test the limits of the play.
Cleveland Sand: The Upper Pennsylvanian Cleveland formation can be best described as a tight
gas sand made up of fine-grained clean sands frequently interbedded with thin shale. The
Cleveland was discovered in the 1950s as players explored for deeper Morrow objectives. It
occurs throughout much of the northeastern Texas panhandle and western Oklahoma. The
formation was initially developed using vertical wells with hydraulic fracturing. Horizontal
drilling is used as a means to maximize production potential of the wells and minimize
completion expense.
Cottage Grove: The Pennsylvanian Cottage Grove sandstone is composed of ridges which
generally have a convex-up profile and sharp flat bases. The sandstone bodies are separated by
marine shale, although a thin sandstone or limestone is sometimes present. The overall sequence
through a sandstone body exhibits a thin coarsening-upward trend from shale or mudstone, into
sandstone, followed by a thicker fining-upward trend into the shales and mudstones above
Tonkawa Sand: The Pennsylvanian Tonkawa sandstone (Missourian-Virgilian) in the
Anadarko basin consists of upper, middle, and lower sandstone units, separated by intervening
shales. The sandstones consist of numerous individual reservoirs, as would be expected in
discontinuous slope sandstones; however, some middle Tonkawa sandstones are quite prolific.
The Tonkawa sandstone has been the “goto” target in the Max Lease area since the 1960’s.
Douglas Sand: The Pennsylvanian Douglas sandstone is similar in nature to the Tonkawa
sandstone in that they are both wedged between bounding shale and limestone units creating both
source and seal for the sandstone.
Figure 11a through 11e shows 5 different major plays in the Anadarko basin. Figure 11f shows
the fairway where all 5 plays intersect. Also shown on figure 11f in the Max Lease positioned
almost in the middle of the multi-play overlap.
Page 14 of 37
Figure 11. Illustration derived from USGS publication showing the multiple play potential
“stacked fairway”of the Max Lease.
Stratigraphy
Figures 12, 13, 14 and 15 exhibit the stratigraphic columns for the Lower Paleozoic, Upper
Devonian & Lower/Middle Mississippian, Upper Mississippian & Lower Pennsylvanian and
Middle/Upper Pennsylvanian respectively.
Page 15 of 37
Figure 12. Regional Stratigraphic Column: Lower Paleozoic
Page 16 of 37
Figure 13. Regional Stratigraphic Column: Upper Devonian & Lower/Middle Mississippian
Page 17 of 37
Figure 14. Regional Stratigraphic Column: Upper Mississippian & Lower Pennsylvanian
Page 18 of 37
Figure 15. Regional Stratigraphic Column: Middle/Upper Pennsylvanian
Page 19 of 37
Recent Exploration Activities
Chesapeake Operations Inc.: Chesapeake has been horizontally drilling both the Tonkawa and
Cleveland formations. Horizontal development of the Tonkawa was initiated by Chesapeake in
late 2009 in Roger Mills County, Oklahoma. “We were drilling in the Cleveland, and it was so
good that we decided to look at the Tonkawa above it,” said Ted Campbell, District Manager –
Northern Mid-Continent District. “The Tonkawa had been drilled as a vertical play, but we
moved to an area where the wells are more oil producing, and we’re drilling horizontally. This
play contains oil and natural gas, but we’re definitely after liquids, both oil and wet gas.”
The positioning of the two plays was important, as Bob Woodside, Land Manager – Northern
Mid-Continent District, explained. “Because the Cleveland was a deeper zone, we turned our
focus to drilling it, because that will hold our leases in the shallower Tonkawa.”
Despite the lower number of Tonkawa wells on Chesapeake’s current drilling reports,
Tonkawa’s time will come. Of the 42 horizontally drilled Tonkawa wells, 34 are currently
producing with average IPs of 222 bo and 278 mcf.
Some wells are just special. One of those is Chesapeake’s Buffalo Creek 1-17 well in the
Springer-Morrow sand Beckham County, Oklahoma, which in July surpassed cumulative gross
production of more than 60 billion cubic feet of natural gas (bcf). The company believes the
Buffalo Creek well is only the sixth well in the state’s history to reach that remarkable milestone.
Over 350 horizontals have been drilled in this northeast Texas Panhandle Cleveland play,
exploiting sands with microdarcy permeability. Ultimate recoveries are estimated at 1.5 bcf per
well, following completion utilizing multistage open-hole frac jobs.
Cordillera Energy Partners III: In Section 33, T15N, R24W, a well was completed in the
Pennsylvanian Marmaton formation with a net sand thickness of 74’. In a recent 24 hour period,
the well sold 14,887 mcf and 1,157 bo.
Last year, Cordillera announced strong results from their first horizontal Marmaton well in the
area, the Galileo 2-4HA, and the company has two newly drilled and fully cased horizontal wells
waiting on completion in their central Roger Mills County Marmaton prospect.
Cordillera recently completed a Granite Wash well in Hemphill County, Texas producing 15,317
mcf and 540 bo in a 24 hour sales period. The 3,986’ lateral was completed in the Granite Wash
“B” bench.
The Smith, A.C. 5H, in Wheeler County, TX, was drilled with a 4,266’ lateral in the Granite
Wash “Britt” bench. After clean-up of the twelve stage completion, the well sold 10,160 mcf
and 298 bo in 24 hours. Cordillera announced similar high-rate results from three other wells in
their eastern Wheeler County stacked Granite Wash development area.
The Bradshaw 1-11HB was drilled in Roger Mills County, OK with a horizontal Tonkawa
completion with initial production of 1,254 bo and 847 mcfg.
Page 20 of 37
Developing Cordillera’s Granite Wash resource play from Texas three miles northeast into Roger
Mills County Oklahoma, the company drilled and completed the Sayre Ranch 5-6HC with a
3,781’ lateral was drilled in the Granite Wash “B” bench and produced 5,270 mcf and 170 bo in
a 24 hour sales period.
Horizontal Tonkawa Oil Resource Play Completions
The Barber 1-20HC was drilled in Roger Mills County, OK with a 4,013’ lateral drilled in the
Tonkawa sandstone. The well was completed in ten fracture stimulation stages and produced 340
bo and 940 mcf in a recent 24 hour sales period.
Also in Roger Mills County, Cordillera drilled the Keahey 1-19H with a 4,064’ lateral in the
Tonkawa and was completed in ten consecutive fracture stimulation stages. In a recent 24 hour
sales period, it produced 240 bo and 460 mcf.
Cordillera and other operators continue to actively develop and expand the horizontal Tonkawa
play in Western Oklahoma. The company currently plans to drill 33 operated horizontal
Tonkawa wells and participate in an additional 41 non-operated horizontal Tonkawa wells in
2011.
Cordillera continued its eight horizontal rig program, drilling 65 operated and participating in 55
non-operated horizontal wells in the Granite Wash, Tonkawa, Marmaton, and Cleveland
formations in 2011. The Company currently has three horizontal Granite Wash rigs in the Texas
Panhandle, five horizontal Tonkawa rigs in Roger Mills and Ellis Counties, Oklahoma, and one
horizontal Marmaton/Cleveland rig in Roger Mills and Ellis Counties, Oklahoma. Cordillera’s
portfolio of horizontal development is concentrated in the Texas Panhandle and Western
Oklahoma, where it is developing a variety of oil and liquids-rich geologic horizons that are
highly economic at current product prices. Cordillera holds over 200,000 net acres containing
over 6,500 engineered drilling locations in the Texas Panhandle and Western Oklahoma. With
current net production of 70 Mmcfe/d and 19 new wells waiting on completion, the Company
expects to reach 100 Mmcfe/d in net production by the end of the second quarter.
Apache Corp.: Apache reported that its first two horizontal wells drilled in the Hogshooter
section of the Granite Wash in Beckham County, Oklahoma, each produced more than 2,000
barrels of oil and three million cubic feet of gas per day. Both were drilled to a total vertical
depth of about 11,000 feet
CONCLUSION
The Max Lease is positioned within a northwest-southeast trending fairway of multiple, stacked
proven Paleozoic hydrocarbon producing reservoirs. These reservoirs range in depth from 8,300
feet (Douglas Sand) to 19,000 (Hunton) feet. Although historic drilling in the Max Lease area
has been driven by gas production, recent emphasis on liquids production by Chesapeake
Operations Inc., Cordillera Energy Partners and Apache Corp. has lead to oil and condensate
discoveries in the Tonkawa, Hogstooter, Cleveland and Granite Wash horizons. The Max Lease
represents an excellent potential for developing multiple hydrocarbon producing wells.
Page 21 of 37
RECOMMENDATIONS
It’s recommended that a hydrocarbon exploration well be drilled on the Max Lease in the NESE
Sec 8 T16N, R26W. This well should be drilled as a vertical well to total depth keeping in mind
that should geologic and economic conditions become advantageous, horizontal legs in selected
pay zones should be considered.
Two Possible well scenarios present themselves depending on drilling dollars available:
1. Drill a well to 9,500 feet in depth which would test the Cleveland Sand, the Hogshooter,
plus the Tonkawa, Douglas and Cottage Grove sands.
2. Drill a well to 14,500 feet in depth which would test the Morrow, Thirteen Finger, Atoka
and Granite Wash as well as the targets above 9,500 feet in depth.
Further Study:
In order to more fully understand the geologic nuances governing oil vs gas production and
higher producing wells vs lower producing wells the following investigations are recommended:
1. Structure map based on well log picks to define local structural components.
2. Study of stratigraphic relationships between the sands and encompassing shales that may
determine the oil vs gas productive pay zones
3. Initial production, cumulative production and production decline curves by formation and
vertical vs horizontal completion.
4. More complete investigation of Hemphill County Texas as far as producing formations,
production figures and current activity.
Top Related