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Oklahoma
In 2006, Enterra acquired assets located in the Central and North Central portions of the State of Oklahoma. The majority of the production from these assets is from the Hunton formation, a Silurian/Devonian carbonate reservoir. Dewatering is the primary method of production. The process requires the removal of large volumes of water to decrease reservoir pressure and allow entrained hydrocarbons to be liberated from the reservoir.
Original field development was done by drilling close-spaced vertical wells. Such a program could result in as many as 8 to 16 wells per section (1 section = 640 acres). Studies of logs and cores early in the life of the project led to drilling of the first horizontal Hunton well in late 2000. Based on the results of that test, the method of developing the Hunton reservoir was changed from vertical drilling to horizontal drilling.
Recent development has incorporated the drilling of horizontal wells with one to three open hole laterals ("crow's foot" drilling). Current spacing is one well per section using one of the various horizontal designs. This drilling program lends itself to the use of multi-well drilling locations. A single site can contain up to 4 producing wells and a saltwater disposal well with a distance of 35 feet to 50 feet between the wellheads and a tank battery complex that houses all the facilities for each of the wells on that site. This strategy minimizes costs and reduces environmental impact.
In 2006, Enterra's strategic partner Petroflow Energy drilled 12 horizontal wells on the Trust’s lands under the terms of a farmout agreement where Petroflow pays 100% of drilling costs and the Trust retains 30% of the new production and reserves.
K-9 Project Area
The K-9 Project is located in Grant and Garfield Counties in North Central Oklahoma. Enterra’s assets in this project include extensive undeveloped lands and working interests in 18 producing wells, two saltwater disposal wells and extensive gathering infrastructure.
At K-9, the Hunton formation depth is approximately 6,300 feet. Current production is from a combination of high angle directional wells and short single lateral horizontal wells. Production is primarily rich gas with some 45° API crude oil. The 2006 exit volumes from this project were 7.7 mmcf/day of natural gas and 10 bbls/day of oil.
As of year end, nine producing wells were drilled and one saltwater disposal well was completed. Most of the wells are in the early stages of dewatering, and results are being evaluated with many wells still showing inclining hydrocarbon production rates. The projection for drilling in this field in 2007 is to have 6 to 8 additional wells on production prior to the end of the year.
Central Project Area
The Central project area is located in Lincoln County, Oklahoma. The original phase of development has proven to be a very successful play. The reservoir rock is predominantly a tight dolomitic limestone. Early tests from vertical wells drilled in this field indicated good reservoir porosity with low permeability. Subsequent horizontal drilling has enabled the company to decrease well density and costs, and increase well productivity.
The first producing well drilled by Petroflow in January of this year has exhibited excellent production rates to date. The 2007 drilling program is intended to be very concentrated in this area with 12 to 16 wells planned. Trust exit volumes for 2006 from the area were 5.6 mmcf/day of natural gas and 407 bbl of 44° API crude oil per day.