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Drilling in a Downturn: Independent oil companies find success in the Eagle Ford


Written by Sergio Chapa

Click HERE to Read the Article by the Publisher.

Crude oil prices stubbornly remain stuck in the mid-$40s per barrel, but independent oil companies have been able to pick up good deals amid the downturn.

San Antonio’s independent exploration and production companies are among those taking advantage of lower prices for drilling, completions and other services.

Drilling permit filings show that local companies such as Blackbrush Oil & Gas, GulfTex Energy, Lewis Energy Group, Texron Operating, Millennium Exploration and Tidal Petroleum are all still active in South Texas.

Tidal Petroleum President Lee Novikoff told the Business Journal that his Schertz-based company is 100 percent debt free and able to drill in the downturn due to lower costs and good opportunities on leases.

“We’re the only ones out in the oil field with a checkbook,” Novikoff told the Business Journal.

Over the past two years, Tidal Petroleum has shown a pattern of filing a drilling permit and putting the well into production before moving on to the next project, providing steady work for the company and its subcontractors.

Tidal Petroleum in June put its Moy lease in Karnes County into production, where its well produced more than 16,000 barrels of oil. Just two months later, the company filed for a drilling permit for its Janysek lease, which is in Karnes County just a few miles southeast of Gillett.

Completely surrounded by leases owned by EOG Resources Inc. that are producing thousands of barrels of oil per day, Novikoff said his company was able to scoop up its Janysek lease “in small pieces here and there.” If it produces on the same level as neighboring wells, it could be one of Tidal’s biggest projects yet.

“It’s the best of the best right there,” Novikoff said.

The Business Journal got a firsthand look at the Janysek project during a recent tour tour of the drilling site. Tidal Petroleum hired Houston-based Big E Drilling as the rig operator and Beeville-based R.W. Dirks Petroleum Engineer Inc. to supervise the project.

Drilling for the Janysek well started in mid-August and reached its target total depth of 11,000 feet just before the Labor Day weekend. Novikoff said the well is expected to be fracked later this month and could be put into production this month.

At the height of the Eagle Ford Shale oil boom, Novikoff said had to wait weeks to get a frack crew. During the downturn, prices have been cut in half and the turn around is lightning fast.

“On my first Eagle Ford job, it took 10 months to get a frack crew,” Novikoff said. “Now, I could get one this afternoon.”

Tags: oil, gas, crude, energy, petroleum

Written by Sergio Chapa

Click HERE to Read the Article by the Publisher.