Reserves and Economics of the Deep Delaware-Val Verde Basin Gas Play

Abstract

Analysis of performance data indicates that the reserves in this area are not so great as originally estimated; moreover, the reserves discovered here annually have not kept pace with requirements, resulting in a critical gas supply shortage. Unless there are better price incentives and more freedom from unpredictable delays caused by regulations, there is little hope for improvement. Introduction The deep Delaware-Val Verde basin is one of the few large basins in the U. S. where exploration has been directed specifically toward development of substantial nonassociated gas reserves. The deep pre-Pennsylvanian reservoirs of this basin are now producing percent of the total U. S. gas requirements. Exploration and development have been complicated by many uncertainties such asunknown price structure,long, unpredictable delays between the time of discovery or development and marketing of the gas, andthe difficulty of determining reserves and profitability with very limited reservoir or production data. production data. Our purpose is to review briefly the history of exploration and development of this area under these handicaps, analyze current trends, estimate recoverable reserves as of Jan. 1, 1970, and discuss econonda and problems facing the industry today. A realistic appraisal of these factors is the basis for decisions now evolving that may affect future development of this basin and thereby affect the present gas supply shortage. A study of drilling activity was conducted by reviewing all of the deep tests in the basin. Reserve estimates were based on a study of all available data on every pre-Pennsylvanian gas well. A statistical analysis of the exploration effort, the reserves and the deliverability was used for economic projections to evaluate the profitability of continued exploration and development under current conditions. History The deep Delaware-Val Verde basin is defined here as the area within the geological boundaries of the Delaware-Val Verde basin where exploration and development drilling activity have been directed toward testing the gas-bearing pre-Pennsylvanian formations at depths ranging from 10,000 to 25,000 ft. The discussion relates primarily to the Ellenburger formation, which contains 75 percent of the reserves. Shallow reserves above the Mississippian have minimal effect on the over-all conclusions and were not included. Fig. 1 shows the general configuration of the Delaware-Val Verde basin and location of the fields, development wells, and wildcat dry holes. The wells indicated by an arrow represent 1970 wildcats completed or drilling as of midyear 1970. The numbers by the fields indicate generally the order of discovery of each reservoir and refer to Table 1, which identifies the reservoirs, showing year of discovery, depth of the reservoir in the discovery well, CO2 content of the gas, cumulative production to Jan. 1, 1970, and number of gas completions in each reservoir. The average depth of the 54 reservoirs listed is 16,000 ft. The exploration of this trend started in earnest after the discovery of the Puckett and Brown Bassett fields in 1952 and 1953. Other important fields discovered were N. E. Oates and Worsham Bayer in 1961, Coyanosa and Gomez in 1963, Grey Ranch and Waha in 1964, J. M. and West Waha in 1965, Lockridge and Toro in 1966, Block 16 and Pikes Peak in 1968 and Barstow and Mi Vida in 1969. All of the fields below 20,000 ft have been found since the discovery of the giant Gomez field in 1963. JPT P. 1515