TECHNICAL SUMMARY
GIDDINGS FIELD OIL AND GAS RECOMPLETION PROGRAM
Holifield Oil Company (HOC) has commenced a recompletion program to develop proved undeveloped oil and gas reserves. High GOR (Gas to Oil Ratio) Giddings oil and/or gas wells will initially be recompleted at an anticipated rate of one well per month but with success to increase to three wells per month. This program will perform re-entry horizontal drilling operations at low cost in a niche market.
Several types of wells can be recompleted:
A.
Drill second and third laterals utilizing either short radius or medium radius horizontal drilling equipment in existing Lower Austin Chalk horizontal wells (and/or extensions of existing laterals in a few cases). Since kick-off for additional laterals in these wells will usually often occur in the open-hole interval of the curve of existing laterals, actual cost of operations will often not exceed $650,000 (excluding cost of well acquisition). We can expect to develop oil and gas reserves in excess of 60,000 BOE (*).
Drill second and third laterals utilizing either short radius or medium radius horizontal drilling equipment in existing Lower Austin Chalk horizontal wells (and/or extensions of existing laterals in a few cases). Since kick-off for additional laterals in these wells will usually often occur in the open-hole interval of the curve of existing laterals, actual cost of operations will often not exceed $650,000 (excluding cost of well acquisition). We can expect to develop oil and gas reserves in excess of 60,000 BOE (*).B.Drill one lateral in the Upper Austin Chalk with short radius horizontal drilling equipment and one lateral in the upper part of the Lower Austin Chalk on those wells where geologic information confirms the existence of a fault and lack of drainage from nearby wells. Since milling of window will be required, actual expenses will generally cost over $600,000 (excluding expenses to acquire well) depending upon distance to fault. We can expect to average over 60,000 BOE for these wells.
Drill one lateral in the Upper Austin Chalk with short radius horizontal drilling equipment and one lateral in the upper part of the Lower Austin Chalk on those wells where geologic information confirms the existence of a fault and lack of drainage from nearby wells. Since milling of window will be required, actual expenses will generally cost over $600,000 (excluding expenses to acquire well) depending upon distance to fault. We can expect to average over 60,000 BOE for these wells.C.Drill Buda wells in those wells where Buda is undrained and not presently cased which will allow for one lateral to be drilled utilizing short radius equipment to penetrate the Buda fault with expenses of about $650,000 (excluding cost to acquire existing well). Buda recompletion expenses are low for existing vertical wells not requiring a window in the casing. We expect these Buda wells to produce in excess of 40,000 barrels of low GOR oil.
Drill Buda wells in those wells where Buda is undrained and not presently cased which will allow for one lateral to be drilled utilizing short radius equipment to penetrate the Buda fault with expenses of about $650,000 (excluding cost to acquire existing well). Buda recompletion expenses are low for existing vertical wells not requiring a window in the casing. We expect these Buda wells to produce in excess of 40,000 barrels of low GOR oil.D.Drill medium radius laterals in existing vertical wells in the Lower Austin Chalk with exceptionally high oil and gas reserves and a lateral in the upper Austin Chalk. Expenses will frequently exceed $1,000,000 per well (excluding expenses to acquire a well). We expect wells to have high GOR oil and/or gas reserves exceeding 100,000 barrels of oil equivalent.
Drill medium radius laterals in existing vertical wells in the Lower Austin Chalk with exceptionally high oil and gas reserves and a lateral in the upper Austin Chalk. Expenses will frequently exceed $1,000,000 per well (excluding expenses to acquire a well). We expect wells to have high GOR oil and/or gas reserves exceeding 100,000 barrels of oil equivalent.* Barrels Oil Equivalent – Converts Natural Gas to its historical equivalent dollar amount in oil. In this area, Holifield uses 8.33 mcf gas to equal 1 barrel of oil.
The following comments provide a summary of important variables.
A.Wells to be recompleted will be gas wells or high GOR oil wells.
Wells to be recompleted will be gas wells or high GOR oil wells.B.The Upper Austin Chalk is productive in part of Giddings Field. A major “play” is available for this type of well. Due to technical problems, medium radius technology will not allow economic development of the Upper Austin Chalk. However, short radius technology will allow recompletions of existing wells in the Austin Chalk.
The Upper Austin Chalk is productive in part of Giddings Field. A major “play” is available for this type of well. Due to technical problems, medium radius technology will not allow economic development of the Upper Austin Chalk. However, short radius technology will allow recompletions of existing wells in the Austin Chalk.C.HOC can usually avoid faults drained by offset vertical Austin Chalk completions because of its substantial experience. Cost over-runs (and some poor wells) experience by some operators have been a problem on some horizontal wells because of drainage. We will generally not encounter depleted faults if the geology is done properly. We should be able to control some of these cost over-runs (or poor wells) by avoiding depleted faults. Depletion causes severe drilling problems and adds substantial expense in both drilling and production because of lost drilling fluid while drilling.
HOC can usually avoid faults drained by offset vertical Austin Chalk completions because of its substantial experience. Cost over-runs (and some poor wells) experience by some operators have been a problem on some horizontal wells because of drainage. We will generally not encounter depleted faults if the geology is done properly. We should be able to control some of these cost over-runs (or poor wells) by avoiding depleted faults. Depletion causes severe drilling problems and adds substantial expense in both drilling and production because of lost drilling fluid while drilling.D.HOC has worked on several hundred vertical wells in the Giddings Field completed in the Upper Austin Chalk or that could not drill to the Lower Austin Chalk while drilling because of large “kicks” in the Upper Austin Chalk. Information is indisputable; Upper Austin Chalk completions were usually (but not always) economic when the fault was found in the Upper Austin Chalk (unless drained). It is now known that pressure depletion does travel through the FAULT for large faults from the Lower Austin Chalk to the Upper Austin Chalk.
HOC has worked on several hundred vertical wells in the Giddings Field completed in the Upper Austin Chalk or that could not drill to the Lower Austin Chalk while drilling because of large “kicks” in the Upper Austin Chalk. Information is indisputable; Upper Austin Chalk completions were usually (but not always) economic when the fault was found in the Upper Austin Chalk (unless drained). It is now known that pressure depletion does travel through the FAULT for large faults from the Lower Austin Chalk to the Upper Austin Chalk. 
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