Drilling to Begin in Historic Fields in East Texas
Allied Energy Inc. is set to begin a potentially risky drilling project in an area that was once one of the most productive oil and gas sites in North America. The company, through its subsidiary, Allied Operating Texas LLC, has built 2.2 miles of road and developed the drill-site location in preparation of drilling its initial horizontal test location in the historic "Giddings Field Area" of east Texas, an area that led the region in both natural gas and crude oil production during the mid-1990s.
The proposed horizontal location is near the Apache Corp. Butaud No. 1 Well in Grimes County, Texas, which was completed in March 2009 and tested and reported at 4,833 thousand cu ft per day (Mcfd) of gas and 30 barrels of condensate per day (BCpd). As per its production records, the Butaud No. 1 continues to produce from a single lateral at an estimated and reported daily rate approaching 2,500 Mcfd of gas and 30 BC.
The proposed plans for an initial horizontal test well are to drill a long length single lateral and/or two opposing horizontal laterals. Although risks do exist and the company can make no assurances, this long length single lateral and/or dual-lateral strategy could enhance reserve and production potential for this location.
As reported by the Texas Railroad Commission (TRC), the nearby Chesapeake Upchurch No. 1 Horizontal Well located in a similar setting was completed for production in 1992 and initially tested at approximately 6,200 Mcfd (equivalent) and produced 3.6 billion cu ft (bcf) of natural gas and more than 147,000 BC in less than five years from a single lateral.
Per the October production reports by the TRC, the offsetting Apache Producing Wells in the field area have produced more than 1.5 bcf of gas and 18,000 BC over an average period of seven months.
Allied has acquired substantial working interest position in the initial test location and in the project area that potentially consists of thousands of acres located in the prolific Austin Chalk, Buda and Georgetown horizontal trends.
"We are tentatively scheduled to begin drilling operations in the next several weeks," says Steve Stengell, Allied's president.
There exist tremendous risks and uncertainty associated with oil and natural gas development including, but not limited to, the geological and mechanical risks associated with horizontal drilling. The company can make no assurances as it relates to estimated reserves, production rates, or timelines for any oil and gas project.
Allied Energy is an independent oil and natural gas company primarily engaged in the exploration, development and production of oil and natural gas in the continental United States.
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