Devon got the market’s attention earlier in April when they said they had staked over 500,000 acres and had an unrisked 3.6 billion barrels of oil there. Devon gave a “type curve” for a Cline Shale well—a guess at how much the well would produce over time—of total production 570,000 barrels of oil equivalent—and 85% of that would be oil and liquid rich gas. The well would flow an average 600 boe/d for the first month and cost $6.5 million.
The Cline is organic rich shale, with Total Organic Content (TOC) of 1-8%, with silt and sand beds mixed in. It’s about 60-150 metres (200-550 feet) thick. Contrast that to the Bakken where the payzone is often only 10-25 m thick. It lies in a broad shelf, with minimal relief (that means it lies nice and flat), and it’s in the “oil window” (a depth where the right temperature and pressure allow the ancient organic matter to turn into oil—gas is below oil) and has nice light oil of 38-42 gravity with excellent porosity of 6-12%. So there are lots of holes in the rock containing oil, but all those holes aren’t well connected, meaning it has low permeability. That is normal in these tight oil plays. And there are frack barriers above and below the shale—rock types that are really hard and would likely halt any fracturing beyond the Cline—this is important because it means that water will not likely be able to come into the well (and water supersedes oil in coming back up the well—most of the time it’s a real negative) from other formations.
Technically, the Cline Shale—also called the Lower Wolfcamp formation—looks like a great play. And because it’s in the Permian Basin, services like drilling rigs and fracking spreads are inexpensive and easy to access. The Permian Basin is already one of the most prolific oil areas in North America, producing 35 billion barrels from multiple zones. But now there are even more zones, but they’re all “tight oil.”