Sugarloaf Prospect >> (A) - Austin Chalk
Geological maps of Texas show a series of play types that are predominantly orientated parallel to the Gulf Coast. The curvature of the Texas gulf coastlines leads to these trends forming arcs that are at times fragmented somewhat by localized faulting or depositional settings. One such trend is the Austin Chalk; four primary fields called the Giddings, Pearsall, Brookeland and Masters Creek generate an arc that stretches from the Mexican border across the whole of Texas and then into Louisiana. Opposite is a map that shows the position of three of these fields as well as the relative position of the Sugarkane Field.
The Austin Chalk was originally produced from vertical wells drilled in the 1960’s and was characterized by low production rates over a long period of time. Well performance within this play has a wide statistical variation and although profitable it is normally a long term return on investment. Austin Chalk is generally characterized by low matrix porosity and permeability. The Sugarkane Field has demonstrated consistently higher matrix porosity than traditional Austin Chalk formations. Chalk, being brittle in nature, is predominantly produced through fractures within the formation therefore the most productive wells are the ones that have the most exposure to naturally occurring fractures or where man made hydraulic fractures are induced.
With greater understanding of the production mechanism and advancements in technical capability within the E & P industry, horizontal wells were extensively drilled from the early 1990’s. Horizontal wells significantly increase the surface area exposed to low matrix porosity Chalk as well as increasing the probability of intersecting naturally occurring fractures thereby substantially improving production rates and reserves recovered per well. This has the ability to dramatically improve the financial returns achieved. Additional production is often achieved by artificially fracturing the reservoir along the length of the well bore by hydraulically pumping fluid into the well bore until fracturing occurs.
In recent years the Brookeland Field has been extended with the discovery to the south of a deeper high pressure Austin Chalk system which remains a close analogy for part of the Sugarkane Field. A number of companies have reported high rate, condensate rich wells from this southern extension to the Brookeland Field with Anadarko Petroleum Corporation (NYSE:APC) leading this activity. A comparison of Sugarloaf and the extension to the Brookeland Field show that they both have similar pressures, high condensate to gas ratios, depths and relatively high quality reservoir character. This provided an early analogue for well and completion design during the appraisal operations at Sugarloaf. The Austin Chalk horizon at the Sugarkane Field was discovered in 2006 with the Kunde #1 exploration well that intersected the formation in the adjacent AMI to Sugarloaf. The Kunde #1 vertical well has been producing gas and condensate from the Austin Chalk since September 2006. The same formation was encountered 7 km away on the Sugarloaf exploration well soon after Kunde #1, whilst drilling to the primary target at the deeper Hosston horizon. All of the wells drilled to date and a number of historical wells have encountered a consistent, correlatable Austin Chalk formation across the field.