Abstract

The Bone Spring formation covers an area of over 10,000 square miles in the Delaware Basin with a thickness of up to 4000 feet in places. One hundred and ten rigs are currently deployed drilling this formation, including forty-five rigs primarily drilling horizontal wells southeast New Mexico. There are six main horizontal Bone Spring objectives including in order of importance, the Second Sandstone, the Third Sandstone, the First Sandstone, the Upper and Lower Avalon Shale and the Avalon Sandstone. This talk will focus on the sandstones. Over 700 horizontal wells have been drilled in the Bone Spring play in the last five years. Ninety percent of the wells have been drilled by eight operators including COG Operating (25%), Devon Energy (19%), Cimarex Energy (12%), Mewbourne (9%), Yates Petroleum (9%), BOPCO (6%), EOG Resources (5%) and Oxy USA(4%). The remaining ten percent of the wells have been drilled by twenty-seven different operators.

This talk will examine the Bone Spring sandstones from a macro view then zoom in to review specific areas. Manzano will present maps of the Bone Spring First, Second and Third sandstones from a study area of T19S to T26S, and R25E to R36E. The area includes 80 townships, 2880 square miles, or 1.8 million acres. On these maps we identify the actual pay zone within the “Bone Spring” laterals. The mapping of over 2000 wells show that the Second and Third sandstones have the greatest lateral extent, best lateral continuity, and best EUR Reserves per well. The First Sandstone has more lateral discontinuity which can make it a poorer objective for horizontal drilling. Development of the Avalon Shale has been marginal in general but an area in SW Lea County has shown improving results, as horizontal drilling and completion technology has evolved. The Avalon Sand has the least areal extent but where present is a good horizontal candidate.

Deposition of the Third Sandstone was sourced from the NW Shelf with deposition from NW to SE and N to S with a more minor contribution from the east. A gross isopach map shows the main axis of thickest deposition (>450 ft) is present along the west side of the county line between Eddy and Lea County, running N-S from T18S to T26S-R31E. Using a map cutoff of 10% porosity, a net porosity isopach map of the Third Sandstone does not match the gross isopach map. The area having at least twenty feet of porosity>10% generally trends NE to SW across the N-S isopach thick. Horizontal laterals are typically placed in the bottom fifty feet of the Third Sandstone where porosity is best developed. Porosity typically averages 10 -13% in the base of the Third Sandstone, but only 8-9% porosity over most of the upper Third Sandstone interval.

To date less than 50 horizontal wells have been drilled in the Third Sandstone in SENM. Historically, vertical development of the Third Sandstone was focused at the Red Hills field and the Los Medanos field. Horizontal development initially started with EOG Resources drilling laterals in the Red Hills field for enhanced recovery. More recently horizontal development of the Third Sandstone has focused in Lea County in the Scharb, Lea and Quail Ridge fields in T19-20S, R34E. This talk will compare the results of wells in this area, compared to a variety of factors including for example the amount of frac sand used, lateral direction, lateral length and net pay. The best new horizontal well, the COG Operating Air Cobra 12 State #2H, has produced 275 MBO and 183 MMCFG in 22 months, and is still producing 200 BOPD. Regionally, production from the Third Sandstone has been observed as far west as R24E and as far east as R34E, and from T18S to T26S. It is really early in the development of the Third Sandstone in SENM, as most 3rd Sand wells are currently being drilled in Loving and Ward counties. Ultimately though, the 3rd Sand play could encompass about 40% of the study map area, and possibly require forty five hundred horizontal wells in SENM if they are drilled four wells per section.

The Second Bone Spring sandstone is the most laterally continuous of the Bone Spring sand plays. A gross isopach of the sand was constructed using a 10 ohm-m maximum cutoff. A net porosity isopach is presented using an additional cutoff of a minimum of 10% porosity. These maps show the Second Sandstone is best developed in Eddy County and westernmost Lea County. Using a minimum of 20 ft of porosity, the play covers over 65% of the study area. The Second Bone Spring sandstone is actually comprised of multiple sandstones in the thick interval between the Top of the Second and the Top of the Third Sandstone. This interval can be over 1200 feet thick. Most of the interval is limestone but it can contain more than 350 ft of gross sand and up to 200 feet of net sand from the multiple intervals. Laterals are commonly placed in the thickest most porous interval, usually in the lower portion of the Second Sand section. The reservoir most commonly has 10-12% porosity with 3 to 10 ohm-m resistivity.

There have been over 200 laterals wells drilled in the Second Sandstone. Most of the wells drilled to date have been located in porous sand depocenters. Current development is concentrated along the north end of the Delaware Basin (T19S-R29 to 32E), in a deep area of SW Lea (T23-24S, R32-33E), and in SW Eddy County spilling into Culberson County. As for the Third sandstone, this talk will compare and contrast the production results of wells in these areas, compared to the same various parameters. To date, the best 2nd Sand lateral, the COG Operating Stratojet 31 State #3H has produced 336 MBO and 405 MMCFG in just 21 months and the well is still producing over 230 BOPD. Depending on the economic parameters, ultimately this play may require seven thousand wells to develop 65% of the study area with four laterals per section.

The Avalon Sand and to a lesser extent the First Bone Spring sandstone are deposited in fan deposits of limited areal extent. Porous lenses are typically no more than one to two miles wide (E-W) and less than 5 miles long (N-S). Closer to the shelf edge, the sands are even more laterally discontinuous, and tend to make higher water cuts. The First Bone Spring sandstone horizontal wells produce with lower EUR’s than the 2nd or 3rd sandstones, but contributing factors can be that some of the First Sandstone wells were drilled earlier in the technology curve sometimes with shorter laterals or were often completed with less sand.

Collectively, just the Second and Third Sandstone plays may take 11,500 wells to develop in southeast New Mexico. If these wells produce an average of 250 MBO per well, then the Bone Spring Second and Third Sandstone play in SENM could produce 288 million barrels of oil. These numbers are still evolving because the industry is still early in the learning curve, with less than 4% of the potential play wells drilled, but the future is bright. Southeast New Mexico production increased from 60 million cumulative barrels oil in 2011 to 80 million barrels in 2012 largely due to this play.