The Arkoma Basin has had its ups and its downs through the years, but through it all, exploration has remained steady.
Modern shale technology has proven its worth, and the basin once again has a new lease on life. And this time it’s bigger and better than ever.
The U.S. Geological Survey (USGS) launched its latest assessment of the Arkoma Basin a few years ago, back in 2010, analyzing the technically recoverable hydrocarbon resources found in the states of Arkansas and Oklahoma.
And now there’s no turning back, and the region is more optimistic than ever. Numbers will only climb higher with the addition of more unconventional prospects found through exploration.
Just when you think you’ve seen it all, the U.S. has another big one on its hands.
The Arkoma has always been a large conventional gas reservoir, but with fracking and other unconventional drilling methods in recent years, the heat is on.
The prior assessment of the Arkoma was in 1995, according to AAPG, and the only resource assessed was coalbed gas. It would be another ten years before shale gas and fracking would turn the whole industry upside down.
We only have to look at the Fayetteville play in Arkansas and the Woodford play in Oklahoma to know what kind of potential we’re talking about. Both of those are among the most active shale gas plays in the country.
There is also another unconventional reservoir in the foreland basin of the Arkoma. This tight-sands gas play could be significant, as there are already whispers that it may be a continuous, basin-centered gas accumulation. Exploration is still being done there.
In 2012, according to NWABusinessJournal.com, the basin produced 113 billion cubic feet of gas, with about 4,100 wells in operation.
Far and above, Southwestern Energy Co. (NYSE: SWN) leads the way in the Arkoma Basin, beginning production way back in 1943 and active in the Arkoma ever since. The company lists its production at 14.1 billion cubic feet for 2012, according to its website.
You will also find XTO Energy Inc. of Fort Worth, Texas in the region. XTO is a subsidiary of Exxon Mobil Corp (NYSE: XOM), who holds the lease. Throughout the region, mineral rights are bought, sold, and have changed hands numerous times through the years.
That’s why there are so many wells, and why exploration and drilling continue to increase. Everybody’s got property leased out to somebody else.
The companies in the region are mostly small players or subsidiaries, like Exxon’s XTO. Some companies, like Hanna Oil and Gas, consider the Arkoma the heart and soul of their operation, even as they continue to expand into other states. But you’ll also find big producers like BHP Billiton Ltd. (NYSE: BHP) busy exploring as well.
But the Arkoma isn’t necessarily the easiest of shale regions to explore. Many of the shale plays within the basin can prove tricky when compared with others.
A solid understanding of plays like the Woodford and Fayetteville, both of which have shown great success, doesn’t necessarily equate to understanding of the geology of other plays found relatively nearby. Even when you inspect the two of those side by side, the mineralogy is different.
And then you have the question of proven vs. unproven resources. The Woodford shale, for example, is a very good producer, but the Chattanooga shale in Arkansas has undergone very few tests. We really don’t know if the potential can be matched, and that extends to shale plays like the Caney and the Fayetteville.
Data is the missing puzzle piece in this scenario; producers lack enough for the analysis and results to make the tough decision: to drill or not to drill.
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The reserves of unconventional resources are at an all-time high in the Arkoma Basin, and as companies continue to collect data and give proper analyses, exploration, estimates, and eventual development and production will all continue to rise.
Evaluations of the Arkoma are an important stepping stone for other shale reservoirs that might also reach their full potential when the Arkoma has reached its own.
A solid understanding of shale in the Arkoma will only unlock other shale gas plays that still leave drillers uncertain – and that includes parts of the big boys like the Marcellus and the Barnett shale, and it trickles down to smaller plays.
The fact that the Arkoma has more history and is becoming more and more understood will only help it in the future.
And as we all know, as technology continues to improve, there’s always more shale to explore. Keep this one on your radar.
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