About the Spraberry (Trend Area) Field

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    The Spraberry (Trend Area) field covers about 2500 square miles in 15 West Texas Counties, making it one of the largest oilfields in the world, by surface area.  It is also one of the most prolific fields in the United States, having produced about 1.4 billion barrels of oil and 4 trillion cubic feet of natural gas since the 1950s. The field has undergone a number of name changes as various depths were consolidated and others were subdivided, resulting in a current recognized thickness of about 3700 feet. About 85 per cent of this interval is shale, and the remainder is interbedded limestone and sandstone. The field currently has about 23,000 producing wells, and most completions since 2010 have been by horizontal drilling.  At the beginning of the 2010s, these wells seldom exceeded 5000 feet in horizontal length.  By the middle of the decade there commenced experiments with 10,000 foot long laterals, and in 2017 the field saw its first 15,000 foot long lateral drilling permits being filed.  In view of its thickness, a single well is not adequate to reach the recoverable reserves, so operators are drilling “stacked laterals” or multiple horizontal wells, such that it might take five or more such wells, underneath each other, to reach the complete thickness of the reservoir at any given location.  A 2014 Railroad Commission staff memorandum in a field rule amendment hearing reported one operator’s estimate of 75 billion barrels of recoverable oil from the field.  At current prices, this oil would have a value of about 4.5 trillion dollars.  There would also be a very large amount of natural gas production from the field, which contains both oil and gas wells.

 

    For the first 60 years of its life, the field was produced from vertical wells, with the best producers being located at its outer edges, where there were more limestone beds of good porosity and permeability.  The shale was known to be organically rich with hydrocarbons, but it was so dense, with limited porosity and permeability, that the oil in this rock could not be made to flow to a conventional vertical well.  With the introduction of horizontal drilling, and fracture stimulation (injection of water and sand under high pressure), it became possible to economically produce these reserves.

 

About the Big Spring City Drilling Project

 

    The Spraberry (Trend Area) field completely surrounds the city of Big Spring, Texas, and there are new horizontal wells all around the city limits, but none beneath it, except at the airport.  Operators have earlier steered away from drilling the city acreage, because it contains more than 10,000 separate lots or tracts.  The oil and gas leasing effort which is required seemed overwhelming to most companies, which could far more easily acquire the same amount of nearby acreage from a single farmer or rancher.  For this reason, over time, the city became a “donut hole” of undrilled mineral acreage, stranded by its leasing complexity.  It is estimated that the total recoverable hydrocarbon reserves in the Spraberry Formation beneath the city area now proposed for development could exceed 100 million barrels of oil, with existing and future recovery technologies, which cannot be produced without drilling horizontal wells.  At current prices, this oil would have a value of about 6 billion dollars.  Pooled units comprised of many small tracts are required to accomplish the necessary drilling within city limits, where most town lot owners also own the mineral estate, or some portion of it, beneath their homes.

 

    The area beneath and around the City of Fort Worth, Texas suffered the same problem, in connection with development of the Barnett Shale field in the prior decade.  Only a very few Texas oil and gas operators were willing to tackle those town lot leasing issues, and one of them was Four Sevens Operating, working with Sinclair, which spent years in the effort and was successful at it.  Four Sevens has now teamed with Sinclair to make the same effort again, but this time at Big Spring.  Its landmen have leased close to 80 per cent of the town lots and commercial tracts proposed for development.

 

    Four Sevens has been unable to lease 100% of the town lots because some owners do not return calls or answer mail, perhaps because they perceive their interests to be so small.  In view of the inability to receive a response and agreed participation by every owner, Four Sevens and Sinclair are pursuing an application at the Railroad Commission of Texas (which regulates oil and gas development in Texas) to seek the formation of five drilling units under the Texas Mineral Interest Pooling Act, sometimes called the “MIPA”.  This same sort of approach has earlier been approved by the Railroad Commission for a number of cases within the Fort Worth city limits, and elsewhere in the State, for example last year in the City of Pecos, Texas.  It is required that applicants in these cases first send a written offer to all unleased mineral owners, matching a format that the Commission has approved in prior dockets, offering various choices to mineral owners with acreage located within proposed drilling units.  Four Sevens and Sinclair placed such offers in the mail on March 7, 2018, to the owners of about 2000 tracts.  Because continued silence from some of these owners is anticipated, the Commission will be asked to docket a hearing on applications for the formation of five separate drilling units, with one initial horizontal well on each unit.  A notice of hearing will be circulated by the Commission to all unsigned mineral owners by mail, published in the Big Spring newspaper, and posted on this website.

 

    The hearing will take place at the offices of the Railroad Commission in Austin.  If you want to attend, the notices will provide information that will enable you to do so.   Copies of the hearing exhibits will be posted on this website, so that you are not required to personally attend the hearing in order to see the data which will be presented in support of the applications.  The MIPA requires a horizontal severance and isolation of the formation, with limitation of the proposed unit only to a particular depth and thickness.  This means that shallower mineral rights and deeper mineral rights will not be pooled by a Commission Order.  Because of the depth severance being created, the Railroad Commission field being named for the application is called the Spraberry (Trend Area) R 40 EXC Field, which was established by the Commission in 2013.  And because of uncertainty as to whether the wells will be oil or gas wells, the application to the Commission will cover both possibilities.

 

    It is anticipated the hearing will take place in May 2018, and further updates with additional information will be posted to this website.  If the applications are approved by the Commission, the first wells would not be drilled before the beginning of 2019.  Surface locations have been established as shown on maps posted elsewhere on this website, situated in areas thought to minimize conflict with existing land uses, and a meeting was held with local community leaders in December 2017 to give them an early briefing on the project.  Four Sevens and Sinclair look forward to this project becoming an important part of the City’s future economic development; and we ask that you let us know if we may answer any questions about the endeavor.

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March 8, 2018