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August

Halcon Original Oil in Place Map

Posted by bernell on August 20, 2014

Charles Cusack, Chief Operating Officer for Halcon Resources, Inc., made a presentation at the EnerCom Conference on August 19, 2014.  Several maps showing the areas of interest in the TMS were released for the first time to the general public.  

Basically, these maps were unveiled to show various looks at the geological information available from the play and to demonstrate the potential of the play.

As I did in an earlier post, I encourage you to study the presentation available online from Halcon's website or the EnerCom website.

But, for now, I've selected one of the maps for our discussion here.

The OOIP map below shows an outline of an estimate in millions of barrels of oil (or BOE-barrels of oil equivalent) in place per square mile or per standard 640 acre section.  This "OOIP" or Original Oil in Place estimate provides the general public with a little insight as to the potential desirability of certain areas of the play over others.  For example, northern Tangipahoa has an area with a 24 million BOE outlined while the red outline of the play is for a 12 million BOE in place number.

Now, understand, there are other factors to consider.  Quantity of oil in place is only one.  But, it is an important one. If the oil is "in place," then it has the potential to be recovered.  If it isn't in place, then there is zero chance to recover it.

But, just how much can be recovered?

Mr. Cusack suggested a reasonable number to use today would be 10%. The implication was that this was a conservative number, but let's use this number and go with Mr. Cusack's mathematical example to compute what the potential average amount of oil that could be recovered from a well might be.

Mr. Cusack's example was a section and a half in a 20 million BOE area.  He said that if 5 wells were drilled on this section and a half and 10% of the oil in place were recovered that these 5 wells would average 600,000 barrels of recoverable oil. (20,000,000 BOE section area X 1.5 sections X 10% / 5 = 600,000).

I certainly hope that either the OOIP numbers are low or the 10% recoverable number is low since most of the play is shown as less than 20 million barrels of oil in place per section and the hope is for a 600,000+ average well in the TMS.

For example, the math works out for a 14 million barrels of oil in place area to average only 420,000 BOE per well.  Though this number would pay for a well, I doubt it would encourage a lot of drilling, since the return would be marginal.

But, the fact is that technology continues to improve such that the expectation is for recoverable oil to reach into the 20% range at some point.  We shall see!

For now, here is the Halcon OOIP map of the TMS.  Enjoy!

TMS Halcon OOIP Map 08-19-2014.jpg 



What do you think about it?