Dallas-based Mesa Energy Holdings Inc. has leased 1,525 net acres in Garfield and Major counties, OK, and has closed on a farmout agreement with Twenty/Twenty Oil & Gas Inc. covering 1,720 net acres that are held by production.
The Twenty/Twenty transaction also includes the outright purchase of three vertical Mississippian Limestone wells, which would be operated by Mesa Midcontinent LLC, the company’s Oklahoma operating subsidiary.
“The Mississippian Limestone in Oklahoma is a proven zone that has been drilled vertically in our area of interest for many years, so there is substantial well control information available,” said Mesa Energy CEO Randy Griffin. “The emerging horizontal play is mature enough to have a substantial amount of public information available, yet early enough that acreage can still be acquired at moderate prices. This is an opportunity to establish a repeatable drilling program with additional leasing and acquisition opportunities in an area with a high drilling success rate.”
The formation, which stretches across northern Oklahoma, western Kansas and southern Nebraska, is drawing increased industry interest, thanks to cheaper drilling costs and shallower wells compared to North Dakota’s Bakken Shale, according to the “IHS Herold Mississippian Oil Play Regional Play Assessment” (see Shale Daily, Aug. 6). Chesapeake Energy Corp., SandRidge Energy Inc., Apache Corp., Repsol YPF SA and Encana Corp. are top acreage holders in the play.
Mesa said it expects to begin a drilling program in the Mississippian Limestone in late 2012 or early 2013. The leases are generally for three years with subsequent option periods. The company said it is leasing additional acreage in the play and pursuing agreements with operators to acquire acreage held by production. The company’s acreage position in Major and Garfield counties is referred to as the Turkey Creek Project.
The Mississippian in Mesa’s area of interest is at vertical depths of 7,000 feet and is up to 500 feet thick. The Woodford Shale, which would be a secondary objective in any well drilled, is immediately below the Mississippian Limestone and appears to be oil-bearing and is about 50-80 feet thick, Mesa said.
“Based on numerous published reports” and SEC [Security and Exchange Commission] filings by other operators in the area, potential reserves for horizontal wells in the Mississippian Limestone on a per-well basis are estimated to be 300,000-500,000 bbl per well,” the company said. The Woodford Shale zone would increase the potential reserves recoverable by the company.”
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