Wednesday, January 30, 2013

Peak Oil? What Peak Oil? Now We Have The Cline Shale

November 3, 2014: in the middle of an oil price slump, in which Saudi Arabia has just announced it will lower the price before cutting production, is suggesting that the next big thing is the Cline:
While the Permian Basin is known as the U.S.’ largest oil producer, operations seem to be shifting from the western side of the basin to the eastern side, and the shift has a lot of people preparing for another boom.
The Cline Shale formation, also known as the Lower Wolfcamp or Wolfcamp D, is located on the eastern edge of the Permian Basin.  The formation runs about 140 miles north to south and is around 70 miles wide.  Counties included in the Cline Shale are Mitchell, Coke, Fisher, Glasscock, Howard, Irion, Nolan, Reagan, Scurry and Sterling.  Other reports also mention Upton, Tom Green, Crockett, and Schleicher counties.  The formation is said to run 200 to 550 feet deep.
With the Cline Shale becoming more and more popular, many oil companies are moving in and setting up shop.
Some of those companies are Apache Corporation, Laredo Petroleum, Firewheel Energy, LLC and Pioneer Natural Resources. With these large companies moving into the area, Greg Wortham, mayor of Sweetwater, didn’t want the same problems that happened in Midland, Odessa and surrounding towns that weren’t prepared for the oil boom, to occur in towns around him. Worthham formed the Cline Shale Alliance in hopes of bringing together the area’s small towns to start preparing for the next oil boom.
April 19, 2014: there are reports that Devon has pulled out of the Cline --
One of the most surprising events is that Devon has all but pulled its operations out of the Cline Shale, predominantly due to "a lot of variability" in production at test sites. While this has tempered expectations for some, supporters of the play say not to be swayed, as larger energy companies have been known to divert their attention from unconventional or unproven plays. Just last year, Royal Dutch Shell disclosed that it would be pulling out of the fastest-growing formation on the planet, the Eagle Ford.
June 27, 2013: random update on the Cline. -- 30 billion bbls recoverable -- current estimate

May 25, 2013: update on a "whale of a shale."
The Cline Shale is about 140 miles long, 70 miles wide, and 200-550 feet thick stretching through the Permian Basin and southward. Test wells are exceeding expectations and indicate the shale could contain 3.6 million barrels of recoverable oil per square mile or as much as 30 billion barrels in total. Yes, billion. That's multiples of the likely production from other well-known shales such as the Bakken up north or the Eagle Ford here in Texas.
Fact check, compared to the Bakken:
  • the better Bakken: 6 wells/section x 600K EUR/well = 3.6 million bbls/square mile
  • middle Bakken: 60 feet thick; Three Forks: 300 feet thick
  • CLR: estimates of 24 billion to 48 billion bbls of recoverable oil
  • Williston to Dickinson: 130 miles
  • Williston to Stanley: 70 miles
  • 30-second sound bite: the Cline is probably another Bakken
April 29, 2013: update from Sweetwater, TX, 100 miles ENE of Midland, where it appears they are getting ready to drill the Cline.

Original Post

A reader alerted me to the Cline Shale in Texas which was news to me. From multiple sources:

Investor site StreetAuthority is gushing over the potential of other shale fields in the United States. It says one shale formation in particular now being explored in Texas could hold as much as 30 billion barrels of recoverable oil and fuel, dwarfing the estimated 4.3 billion barrels in North Dakota's Bakken shale.
Street Authority writes: "Devon's wells show that the formation contains 3.6 million recoverable barrels of oil per square mile. As the Cline is roughly 9,800 square miles in size, this works out to estimated reserves in excess of 30 billion barrels.
The website

The Cline Shale oil play lying at roughly 9,250 feet below the surface along the eastern flank of the Midland Basin could possibly be a key component for energy independence for the U.S.  The play area runs roughly 140 miles north-south and about 70 miles wide through Howard, Glasscock, Reagan, and Sterling Counties.  
Devon and Chesapeake recently reported impressive test well results.  Devon’s wells show the formation contains 3.6 million barrels of recoverable oil per square mile.  A rough approximation, taking into account the 9,800 square mile area of the Cline, indicates over 30 billion barrels of recoverable oil.  This exceeds both the Bakken and Eagle Ford by far.  
The USGS estimates the Bakken Shale to hold up to 4.3 billion barrels of recoverable oil, and the Eagle Ford has estimates at as much as 7 to 10 billion barrels of total recoverable reserves.  John Richels, president of Devon, gave an expected type curve value of 570 MBOE for a Cline Shale well, with 85% being oil and NGLs.