A relatively late entrant in the growing national debate about shale formations and how much long-term domestic reserves they bring to the United States, the Monterey Shale in California is an extensive old oil play that some analysts are predicting will experience a rebirth in today's shale-dominated domestic energy world.

Estimates earlier this year from the federal Energy Information Administration (EIA) placed Monterey's long-term potential at more than 15 billion bbl, which would make it bigger than the highly touted Bakken and Eagle Ford fields in North Dakota and Texas, respectively. Industry and informed academic sources indicated to NGI's Shale Daily that the EIA estimates may be debatable, but it is clear that after decades of tepid interest, particularly among independents, Monterey is drawing a lot of new exploration and production (E&P) attention.

Officials at the largest independent already involved in the Monterey Shale, Denver-based Venoco Inc., think the EIA estimates are too low. Venoco CEO Timothy Marquez said at the Enercom Conference in Wyoming last month that the EIA estimates are "greatly understated." But he also has said that Venoco's first attempts at horizontal exploratory drilling in the Monterey were unsuccessful. For now they are only drilling conventional, vertical wells.

Marquez quoted Occidental Petroleum Corp. (Oxy) as estimating its acreage alone holds up to 10 billion bbl of reserves, and he considers Oxy's share of the overall Monterey Shale play relatively small. He said Monterey has a "huge amount of potential."

New drilling permits in the state are up by 359 compared to last year at this time, and the majority of them are in Kern County, which includes part of the Monterey Shale play, according to a spokesperson for California's Division of Oil, Gas and Geothermal Resources (DOGGR), which has no specific statistics on Monterey. "Our record keeping is set up to track wells by [six] districts, and the Monterey formation overlaps several districts," he said.

A spokesperson for the Western States Petroleum Association, Tupper Hull, told NGI's Shale Daily that some of his group's members have major interests in the Monterey and others "don't seem all that excited about it." Hull cited a report that estimates that there are more than 10 billion bbl of added oil that could be obtained with conventional drilling offshore central California.

"I also have heard the jury is still out as to whether hydraulic fracturing [fracking] will allow cost-effective recovery of oil from the portions of the Monterey Shale formation not already producing," Hull said.

Confirming the huge potential and the growing interest by independents in the Monterey is Richard Behl, a professor of geology at California State University, Long Beach, and a recognized expert on the Monterey formation. Behl, however, told NGI's Shale Daily he won't comment on the level of accuracy of the EIA estimates at the 15.5 billion bbl level, noting he doesn't do reserve evaluations.

With or without the use of fracking, Behl considers the Monterey formation to have tremendous potential. "It is very heterogeneous rock," he said. Areas that have been ignored for 100 years because they are "not brittle enough to be naturally fractured" are quite similar to shales being developed by fracking elsewhere, he said. "They are incredibly hydrocarbon rich."

Behl said that improvement in production and drilling assessment techniques make going after other unconventional formations also more possible these days, without using fracking.

"No part of the Monterey production is 'conventional', but on the other hand, the naturally fractured -- 'brecciated' -- chert-porcelanite-dolomite plays seem almost conventional to California geologists and engineers," Behl said. "It is the rocks that previously weren't considered economic that are of new interest, and they cover a vast area of California and the Pacific Rim."

Venoco's Marquez takes exception to the labeling of Monterey as an "emerging play," noting that it has been producing oil for the better part of a century. "We've already found 3 billion bbl and that doesn't include any of the recent development by Oxy and ourselves," he said. "Some 3,000 long-term producers in the Monterey make it actually the oldest and biggest shale play out there, and yet it doesn't get any respect."