Santa Fe Petroleum Inc. announced Thursday that it had acquired additional leased acres in North Central Texas for oil and natural gas drilling, expanding its position in the Barnett Shale.
Santa Fe -- an E&P company based in Plano, TX, formerly known as Baby All Corp. -- said the transaction to purchase approximately 1,628 acres near its test well targeting the Barnett was finalized on Feb. 11. The deal with an undisclosed seller boosted Santa Fe's total holdings to 1,704 acres.
Santa Fe CEO Tom Griffin said the company planned to acquire an additional 10,000 to 20,000 acres in the region. "We are very excited about the purchase of these leases and recognize that this is a significant first step as part of our leasing acquisition plan in the area."
Santa Fe said it plans to identify between 12 and 20 drilling locations on its recently acquired acreage, depending on the number of oil wells eventually drilled in the Barnett and the associated Marble Falls formation.
The company completed a test well targeting oil in the Barnett last November. Griffin said its engineers have projected, through previous tests by Baker Hughes Inc. and Weatherford International, that the well could produce an estimated 75 b/d of oil with gas pressurization and significant volumes of water.
"We know this is typical in most shallow wells being drilled in the Barnett Shale and Marble Falls formations in the North Central Texas area," Griffin said. "Based on this information, we plan to drill a number of water disposal wells along with the production wells throughout our drilling program in this area."
Santa Fe said data from Baker and Weatherford indicate the Barnett holds an estimated "barrels of oil in place" average of more than 18,000 bbl/acre. The results estimated a 20% recovery rate, which equates to approximately 3,590 bbl/acre of oil.
The Railroad Commission of Texas recently issued a preliminary report that showed crude oil production in the state for November had increased from the year before -- from 29.9 million bbl (996,694 b/d) to 41.15 million bbl (1.37 million b/d) -- but natural gas production declined (see Shale Daily, Jan. 31).