Strata-X Energy Ltd., Golden, Colo., plans to drill a horizontal well in the Illinois basin to test for oil in an undisclosed dolomitic formation below the Devonian New Albany shale.
The company doesn’t reveal the precise location of its Vail oil project for competitive reasons but said it holds 100% interest in 46,300 net acres in what it interprets as an unconventional continuous oil accumulation. If an application to drill is approved, it would spud the well in the second quarter of 2013.
The company described the proposed well as to have a 4,300-ft horizontal leg at 4,500 ft true vertical depth and said it is acquiring seismic to help with geosteering.
The dolomitic reservoir is interpreted to extend over 500 sq miles at 3,500-5,000 ft based on an in-house analysis of 120 historic wells that intersected the reservoir, the company said. It cited geologic studies that indicate that the New Albany shale has expelled more than 300 billion bbl of oil, of which more than 4 billion bbl have been produced from shallower formations.
Atlas has been smart in allowing others to develop drilling improvements in basins where it has interests. Your example may be another case of allowing the R&D to catch up with the acreage. The ip results from the Atlas Mississippi wells are a cut above what Sandridge has been able to achieve on average. Atlas definitely executes quite well when the ducks are lined up. I think this is one of the reasons why they have put off drilling in Colorado, Michigan and Illinois.
I think the reality is that the Colorado Niobrara wells simply aren't economic at today's prices. I think this also holds true for the Michigan Antrim. Not sure if ARP retained any of the deeper zones (Collingwood). If a productive oil play develops in the Antrim or the New Albany Shale, I think ARP will follow it closely.
In my opinion, a more interesting play is the Mississippi Lime in Tennessee that Miller is drilling. If these wells develop the way they have been hyped, then it would be a nice low risk liquids play. Based on info released by Miller...these wells could expect to pay out in 2 yrs or less.
In the interim, I think ARP will continue to focus on the hugely profitable Marble Falls, Utica and Marcellus.