Saturday, June 21, 2008

Fort Worth based Approach Resources

Just saying no to the Barnett Shale
By Jim Fuquay

Source: Fort Worth Star-Telegram
Credit: Star-Telegram staff writer
Sunday, April 6, 2008
Edition: Tarrant, Section: Work and Money, Page E1

Approach, based in Fort Worth, isn't afraid to follow a path less traveled.

"Approach's various plays - mostly natural gas but some crude oil present challenges similar to those posed by the Barnett Shale, where producers face what's called a "tight" formation that doesn't let go of its gas easily. In Texas, the company's properties are in tight sandstones. Kentucky and New Mexico are shales, while the Canadian venture, in British Columbia, is both tight sand and shale.

Those properties, called unconventional resources, match Approach's technical expertise, Craft said. But there's another reason the company is active there. With the depletion of more easily reached deposits in this country, they're about the only game in town.

"Tight gas plays and unconventional plays are very expensive because of the massive fracturing and technology you have to apply," Craft said....

...In many unconventional plays, including the Barnett Shale, oil or gas is spread relatively evenly throughout the formation, rather than the stereotypical situation where explorers hope that they hit that hidden pocket of oil or gas that conveniently bubbles right up to the surface. With the usual provisions for the unknowns involved when drilling down a mile or more, unconventional fields offer relatively predictable results.

Not so in New Mexico's Mancos Shale, an oil shale that Craft describes as "our wildcat play." The company expects to drill its first well by June.

"We normally don't do exploration plays, but it was cheap with 90,000 acres under one lease, which is unusual, and under $200,000 a well" for a dry hole, he said.

"If we drill eight wells and don't do well, we still haven't lost a lot of money," he said."

Another Texas-based company, Tecton Energy, LLC , which specializes in unconventional tight gas basins (unconventional recovery "UCR"), has purchased tens of thousands acres of mineral leases in the pristine Galisteo Basin and Santa Fe County.

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