Devon Energy 2012 Analyst Day (Tuscaloosa Marine Oil Shale)

Blogs
1

The results are in, Devon Energy announced its overview on one of the nation’s newest and hottest shale oil plays, the Tuscaloosa Marine Oil Shale.

  • Tuscaloosa Attractive Attributes:
  1. Proven Capacity To Flow Oil; Existing Production
  2. Highly Over-Pressured Reservoir
  3. Low-Cost Acreage
  4. Well-Established Regulatory Environment
  5. Existing Infrastructure

** Tuscaloosa Stratigraphic Section:

  1. Highly Laminated Lithology
  2. Brittle Intervals Of Sand, Siltstone And Limestone
  3. Significant Fracture System
  4. Several Historical Oil Pay Zones, Throughout The Stratigraphic Section (Austin, Eagleford Shale)

*** Tuscaloosa Significant Fracture System:

  1. Fractures Are Dominant Component
  2. Very Dense Fractures
  3. Closely Spaced Fractures Will Improve Permeability
  4. Challenges for Drilling

**** Tuscaloosa Type Log:

  1. Wide Spread Shelf Setting Low Structural Relief
  2. Gross Thickness: 100’-250’
  3. High Resistivity
  4. Highly Over Pressured: >0.7 PSI/FT
  5. Frac Barriers Above And Below
  6. Fractures Present In Cores And Image Logs

***** Tuscaloosa Results To Date And Targets (Target Well Economics):

  1. Drill And Complete Cost $12-14 Million
  2. EUR: 400-600 MBOE (90% LIQUIDS)
  3. IP RATE (1ST MONTH AVERAGE): 700-900 BOPD
  4. AVERAGE ROYALTY: 21%

****** Tuscaloosa Key Going Forward:

  1. Optimization Of Drilling And Completion
  2. Testing Of Drilling And Completion
  3. Testing Of Longer Laterals With 15-20 Stage Fracs
  4. ESTABLISH REPEATABLE COMMERCIAL RATES