Signs of ever-increasing oil and gas activity in Madison County are beginning to mount up as the first quarter of 2012 draws to a close.
As of March 30, 21 new drill applications had been filed with the Texas Railroad Commission this year. If that pace continues, the single-year record of 74 new drill application set in 1983 would be eclipsed, and the various other revenue sources associated with increased drilling activity are also on the rise.
Sales tax payments to Madison County during this period of 2012 are up 41 percent over the same period in 2011, and the Madison County Clerk’s office recently reported one of its best revenue years on record, nearly doubling its revenues over the same period in the last fiscal year.
“This boom brings additional people to Madison County, which is good for hotels, restaurants, retail stores, in generating sales tax revenue,” Madison County Judge Art Henson said. “We’re showing increases monthly. This year has already increased considerably over last year.”
A ride through the rural areas in Madison County would give any spectator an opportunity to see how active oil and gas activity is today. In the area outside North Zulch, oil tankers are a common sight, and wells flaring were visible for miles around off of I-45 for several days last week.
While drill permit and revenue records are being set on a consistent basis, another record fell in late October at the hands of Woodbine Acquisitions Corp. National Oilwell Varco visited with members of Woodbine Acquisitions Corp. last week at a drill site near North Zulch to present a plaque recognizing a record days vs. depth achievement.
Woodbine set the record by drilling to a depth of 15,290 feet in 172 hours. The record is impressive in its own right, but even moreso considering that the company that set it is not considered one of the giants of the industry.
“Woodbine is a small, independent operating company targeting the Woodbine sand formation,” independent petroleum consultant Bill Laird, Jr., said. “They are the little guy and are a lot of fun to work with. This should be the start of a little boom here. We’ve had a lot of challenges, but so far have had really good success.”
The site where Woodbine accepted its plaque last week was bustling with activity as a new well was being prepared to go up. Woodbine operates in Madison, Grimes and Leon counties, and the group was in good spirits and thankful for its recognition, as well as support from the community, in doing its day’s work.
Operations Manager Eric Waller was able to share a wealth of information about the company’s record, although much of it is likely a little more technical than most outside the oil and gas industry would understand.
Woodbine currently has only one rig in the area, but looks to expand as more opportunities become available.
“It’s good to be here,” Waller said. “This site and our operations are all environmentally friendly. All of our service partners and people we’ve encountered have been very friendly and helpful. As for the record, we plan on breaking it again. It’s all due to a lot of new technology that allows us to operate in a cleaner, faster manner.”
Woodbine, like all similar companies, does encounter its share of issues from time to time. Circulation issues generally top the list, but the company works together to overcome those problems. Other issues sometimes arise, such as difficulty with getting production casing in the hole.
Teamwork helps solve these problems, but right alongside is technology. Laird said that the navigation system Woodbine utilizes is the same as that which NASA uses to guide its space shuttles.
“As we circulate (fluids), sometimes we will drill into formations that are caverns, and they take our fluids from us,” Laird said. “As problems arise, we have to counter them and solve problems as they occur.”
While Woodbine is setting records, Crimson Exploration Inc. is another company that has made big announcements in recent weeks.
On Thursday, Crimson announced the successful completion of the Mosley #1H, its first horizontal Woodbine oil well in Madison County, at a gross initial production rate of 1,203 Boepd, or 1,017 barrels of oil, 87 barrels of natural gas liquids.
The well was drilled to a total measured depth of 15,650 feet, including a 6,300 foot lateral, and was completed using 23 stages of fracture stimulation.
Additionally, Crimson is actively drilling two more horizontal wells targeting the Woodbine formation in Madison County – the Grace Hall #1H and the Vick Trust #1H.
Crimson currently has plans for nine wells in Madison and Grimes counties in 2012. Production from the two aforementioned wells is anticipated to commence mid-second quarter.
“We are very pleased with the results of the Mosley #1H and believe this success validates the quality of Crimson’s position in the Madison and Grimes County area, where we own approximately 17,500 net acres,” Allan D. Keel, president and Chief Executive Officer, said in a press release. “The coming months will be an exciting time for Crimson as we continue to pursue our plan for this area.”
The Woodbine formation, which is being drilled in Madison County, is a Cretaceous aged series of sandstones and siltstones that reside within the Eagle Ford Shale. The productive Woodbine sands in the Madison and Grimes County area are a lower porosity and permeability extension of the Kurten Field in Brazos County.
Previous to the current horizontal drilling and multi-stage frac completions, the Woodbine was developed through conventional vertical completions. With the advent of horizontal drilling and multi-stage frac completions, a 10-20 fold increase in rates and recoveries has been recognized.
Don Bodenhamer has operated Centex Supply, an oilfield supply company located in Madisonville, since 1987 and said that right now is about as busy as he’s seen it in his time.
“You’d have to go back to the 1940s or 1950s to find a comparable period,” Bodenhamer said. “It was actually a time of bust when we opened. It got better in the early 1900s, but it’s the busiest it’s been now. The only other period I could compare it to is 2006-2007. There was quite a bit of activity back then but that was mostly related to the gas plant being constructed on 1372.”
More names of exploration companies operating in the area are popping up on the Texas Railroad Commission’s website each day. While revenues are up and tanker traffic is on the rise, many of those in the industry say that Madison County still has a long way to come before the totaliy of the boom is realized.
“A lot of larger companies are taking note,” Laird said. “This is the developmental stage. This could develop into something like the Eagle Ford Shale in South Texas.”