THIRD DRILLING BOOM

Giddings Field Horizontal Drilling Re-completion Program

Holifield Oil Company (HOC) has organized a Horizontal Re-completion Program located in Lee and Fayette Counties, Texas in the Giddings Field.  HOC has selected wells located within one of the most productive oil and gas areas of the Giddings Field for this project. The key for this project lies in a vast proprietary data bank under development by affiliates of HOC since 1975 (Greater than 100 man-years Research and $10,000,000 in Data Acquisition).  HOC has identified hundreds of wells that can be re-completed. Applying significantly less expensive and more accurate horizontal drilling technologies makes this an opportunity with considerable upside potential, in a proven area.  Little risk is incurred to develop proved undeveloped oil and gas reserves as defined by reputable petroleum engineering firms.

First Drilling BoomSeismic Breakthrough
Affiliates of HOC have been active in the Giddings Field for thirty years.  The owner and principal of HOC, B. Ray Holifield, has an extensive background within the oil and gas industry beginning with Texaco, Inc. in 1964.  During his forty-two year career, B. Ray Holifield has been credited with the development of seismic techniques allowing successful development of fracture systems by drilling vertical wells in the Austin Chalk Trend in the 1970’s.  Through the formation of strategic alliances, Ray Holifield & Associates (RH&A), an affiliate, has drilled or caused to be drilled as consultant, more than 1,500 vertical oil and gas wells in the Austin Chalk Trend of South Texas since 1975.  These 1,500 wells (costing approximately one billion dollars) have produced over 200,000,000 barrels of oil equivalent (BOE) * with a value of approximately $4.5 Billion. 

Lee County, Texas is the initial area of interest. The second area of interest is in Fayette County. HOC has an extensive data bank, exceeding all others in Lee County. RH&A has drilled or caused to be drilled 644 vertical wells out of a total of 1,149 vertical wells (56% of all vertical Austin Chalk wells) that have produced from the Austin Chalk and Buda formations located in Lee County, Texas since the Giddings Field was discovered, many of these vertical wells are being re-completed by re-entry horizontal drilling. The cumulative production for the 644 vertical wells to May 1, 1997, excluding production after wells were re-entered and horizontally re-completed, was as follows:

Cumulative Production
647 RH&A LEE CO.  WELLSOIL (bbls)    GAS (mcf)       BOE *
                 Total Production59,810,457  295,201,000   95,248,806
                            Average       92,873         458,000       147,902 **

*BOE – 8.33 mcf gas equals one barrel of oil.
** Average Lee County vertical production for all 1,146 wells is 97,000 BOE. However, RH&A wells average 147,902 BOE – 4.77 times (477%) the oil and gas production per well compared to other operators (averaging 31,001 BOE) of vertical wells in Lee County.  This success is credited primarily to extensive experience and technical database.

Second Drilling Boom - Prior Medium Radius Horizontal Drilling Programs
HOC and affiliates have been a consultant, participant or operator of approximately 200 horizontal re-completed wells during the past twenty years within the Giddings Field.    Of 1,146 Austin Chalk vertical wells drilled in Lee County, Texas, 171 have been re-entered for medium radius horizontal drilling.  Over 300 re-entry horizontal wells are projected to recover an average exceeding 100,000 BOE.  This includes the early experimental wells drilled in 1986 through early 1988, which often have low recoveries, and wells drilled through depleted reservoirs.



In 1987, Ray Holifield and Bechtel Investments Corporation of San Francisco formed BecField Horizontal Drilling Services Company (Becfield) in Houston, Texas.  BecField was the first service company in the world to offer reliable commercial re-entry medium radius horizontal drilling techniques and equipment. BecField drilled several hundred horizontal wells during the time Ray Holifield was Chairman and fifty percent (50%) owner.

Third Drilling BoomShort Radius Horizontal Drilling Technology
A large number of older horizontally drilled wells were drilled with only one lateral in the approximately 750’ thick Austin Chalk interval in Lee County.  Long involvement with horizontal drilling has given our team the opportunity to observe that although significant amounts of known hydrocarbons are being recovered by re-entry re-completion programs presently being conducted in the Austin Chalk, substantial amounts of oil and gas remain unrecovered in many wells previously drilled utilizing medium radius horizontal drilling technology.  Additional oil and gas reservoirs will be recovered by drilling new laterals using either medium radius or short radius technology in horizontal wells previously drilled with only one lateral.  Although many vertical wells have previously produced very large amount of oil and gas from the upper Austin Chalk, previously utilized medium radius horizontal drilling technology with curves of 250 to 500 feet did not allow economic horizontal drilling of the upper Austin Chalk.   Use of re-entry short radius horizontal drilling technology allows the selected development of substantial oil and gas reserves in certain areas in the Giddings field.

In many wells reserves in undeveloped sections of the lower Austin Chalk have not been developed by either vertical or medium radius horizontal drilling technology. A large percentage of the re-completed wells of this program will be re-entered one or more times to develop additional oil and gas reserves.  Economic return will be highly enhanced for subsequent re-completions because the purchase of the leasehold/well has already been recovered and the window in the casing prepared for kick-off in the original re-completion can often be used for subsequent re-completions.  The cost reductions are so large that the economic return for the subsequent re-completion can often be two or more times the original re-completion.

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