A test well drilled to the Rogersville shale in Kentucky has apparently produced very little, just 19 barrels per day of oil and 115 MCF per day of gas. That would be end of story for the Rogersville shale if those numbers were the whole story.
Companies are exploring the Rogersville shale right now because of test wells that were done in the 1960s and 1970s which produced 10,000 barrels of oil (not per day) and 6-9 MCF per day of gas. So why did this well get such poor results? It’s a vertical well, and it hit a bad spot in the Rogersville shale.
The Marcellus shale used to be a formation that would yield dry holes. Some vertical wells to the Marcellus produced like gangbusters, others didn’t produce a thing. Horizontal drilling changed that. The horizontal portion of the well passes through rock that doesn’t produce and through rock that does produce, and the end product is a well that produces a lot of gas.
So the Rogersville shale still has potential, and will probably be a great formation to develop. It’s going to be expensive, at $18-$30 million per well, but it will also give some really awesome production when horizontal drilling starts.
This begs the question- if the initial test well didnt produce enough for a drilling frenzy in the 70s, and the latest test well produced negligible amounts, what leads one to the conclusion that “really awesome” results will come from horizontally drilling this unproven field? Horizontal drilling cant discover that which is undiscoverable. Do you have seismology data, internal company data from the 70s, anything to support this assertion, which must be described as wild and speculative (at best right) now?
What makes horizontal drilling so interesting is that it is more likely to produce large amounts of gas. It will produce large amounts of gas because the horizontal crosses both the bad parts of the formation and the good parts of the formation. We know that the Rogersville can produce in large quantities because of the old test well, and that it can produce in tiny quantities because of this new test well. That’s similar to the Marcellus. Some vertical Marcellus wells didn’t produce well, some did. Right now there’s no reason to expect the Rogersville to not produce. This opinion of mine certainly is wild and speculative, and I absolutely don’t expect the Rogersville to be economic any time soon, but when they do get around to producing the Rogersville I expect it to be a “really awesome” source of natural gas. I could be wrong. It wouldn’t be the first time. But I am in the business of helping mineral owners put together excellent leases with oil and gas companies. Downplaying the value of the Rogersville might lead some mineral owner to just sign the lease the landman puts in front of them. If they understand the potential (not even actual, but potential) value of the Rogersville shale, they will hopefully be more willing to negotiate hard with the company. At very least they might ask for a higher signing bonus.