Will the Barnett Shale Become a New Midland Basin Play? And Some Other Deep Shale Plays that Are Virtually Untapped

 

     It was in the Barnett Shale in the Fort Worth Basin of Northeast Texas where some of the earliest high-volume hydraulic fracturing was developed, beginning in the late 1990s. Mitchell Energy did the fracture tests. Meanwhile, Devon began drilling horizontal wells in the shale. When the new and bigger fracs were combined with horizontal drilling the shale revolution began. Even after the Barnett became established in the Fort Worth Basin, some were considering testing the much deeper Barnett over in West Texas. Deeper plays can be more prolific, but they are also more expensive to drill and often have other drilling and/or geological hazards. These can range from formations above the target that are difficult to drill or seal off, to high-temperature and high-pressure conditions, to hard to predict localized faulting. While the Fort Worth Barnett is a shale gas play, indications are that the Midland Barnett play is at about 65% liquids. This bodes well, since oil is usually more predictably profitable than natural gas in West Texas.

     Thus far, the Midland Barnett is being tested by big players such as Occidental Petroleum. Diamondback Energy is evaluating the western part of the play into the Central Basin Platform which is non-productive in the Permian-aged reservoirs. Leases need to have sufficient deep rights to be able to drill the deep Barnett. That is not always the case as some companies retain deep rights when leases are sold.

     Economics relative to other plays will determine whether the Midland Barnett play takes off. The play is only about 1000 ft deeper than the deepest Permian reservoir, the Wolfcamp. That should not impede economics much. Enverus recently produced an in-depth report on Midland Basin Barnett potential, I am not a subscriber so I couldn’t see it, but they did offer the following key takeaways from the report:

 

1)     Recent wells targeting the Barnett interval in the Midland Basin show higher oil recoveries and lower breakevens than other secondary zones, according to a new analysis from EIR.

 

2)     Barnett wells drilled in the core of the Midland Basin average slightly higher oil rates than those drilled near its edges.

 

3)     Vertical separation of more than 1,000 feet from the Wolfcamp D makes the Barnett a true inventory expansion opportunity for operators with deep drilling rights regardless of previous shallower development.

 

     Exploration began in earnest in 2019/2020. The section in the Midland Basin area is about 150-200ft thick. A thick section of Barnett also occurs in the Delaware Basin on the other side of the Central Basin Platform and home to much of the Permian production. However, thermal maturity mapping suggests that the Delaware Basin Barnett equivalent would be a dry gas play. It is also 17,000-19,000ft deep in the Delaware Basin where both the Woodford and Barnett shale equivalents are prospective. The Barnett is eroded on some parts of the Central Basin Platform, but some remnants of the section were preserved, as the map below shows. It also thickens along the eastern part of the platform. The Midland play seems to be developed along the thick near the Central Basin Platform. The Atoka zone above the Barnett is also productive. Both zones produce less water than Wolfcamp wells and have great gas pressures, which keep them flowing and delays the need to put pumps on the wells. Thus far, production is not as big as in the Permian reservoirs, but operating costs are lower. The Midland Barnett play will be smaller in areal extent than the Midland Permian plays but there are multiple reservoirs, including the Merimac or Woodford equivalent. Diamondback Energy noted productive wells on “terrace structures” along the boundary of the Midland Basin and the Central Basin Platform, as the slide below shows.  

Source: Diamondback Energy Presentation.

     Geologist Mike Party did a great presentation at Super Basins 2020 on the emerging Midland Barnett play. The slides below are from that presentation.

 

     Pioneer Resources (now part of ExxonMobil) has been dipping into the play and their then CEO Scott Sheffield said back in January 2023 referencing the Midland Barnett: “You’ll see some exciting things in the next couple of years.” Pioneer planned to drill 4 Midland Barnett/Woodford wells in 2023. Operator Elevation Resources was drilling its 47^th well in the play in January. Several others are active in the play. As the play is perfected it seems likely that more wells will be drilled and eventually added to the inventories of these operators.  

 

Other Deep Shale Plays with High Reserves That Have Yet to be Developed and Some That Won’t Be

     Due to the cost increases of drilling deeper wells, there are shale plays in many basins that have yet to be developed. Some could end up being more economical than shallower plays. A few that come to mind are the deep Utica dry gas play in Pennsylvania and parts of West Virginia where initial exploration yielded high-volume gas wells and is having occasional drilling, the deeper Haynesville play in Texas, which is currently being developed, the extension of the Eagle Ford Shale into Mexico, and the Los Molles shale play which sits under the prolific Vaca Muerte shale in the Nequin Basin of Argentina. No doubt, there are several others. New shale pays are being developed in Australia and should be considered in the Indus Basin of Pakistan and Western India. Other shale plays have been more or less abandoned due to the hydrocarbons migrating out or other geological factors that have made the formations less productive than the more prominent shale plays. These plays include the Floyd Shale of Alabama’a Black Warrior Basin, the Fayetteville Shale in Arkansas which was developed in through the early 2010s but is not economic enough at low commodities prices, the Rogersville and Conasauga shales of Kentucky and West Virginia which have not been productive enough, and the Silurian-aged shales of basins in Poland which were also not productive enough. Potential plays in the U.K., France, and in other Eastern European areas are stymied mainly by public opposition so it is not likely that these plays will develop very much. Some plays are being explored in the Middle East and North Africa as well. Finally, as mentioned, the Barnett/Woodford section is prospective for natural gas in the Delaware Basin, but the depths currently make it uneconomic compared to other plays. In addition, there is not a need for more gas in that area.  

 

References:

A Familiar Name is the Next Big Thing in the Permian Shale Bonanza. David Blackmon. Forbes. November 28, 2023. A Familiar Name Is The Next Big Thing In The Permian Shale Bonanza (forbes.com)

The Barnett bonanza is coming: In-depth analysis explores promising potential within the Midland Basin. Enverus. November 7, 2023. The Barnett bonanza is coming | Enverus

Mike Party - Permian Basin: Barnett Shale Play Emerges. Super Basins 2020 Sugar Land, Texas. Mike Party - Permian Basin: Barnett Shale Play Emerges (aapg.org)

Barnett Shale targeted as Permian operators move into new plays. Mella McEwen. January 20, 2023. Midland Reporter Telegram. Barnett Shale targeted as Permian Basin operators move into new plays (mrt.com)