American Oil and Gas Reporter - May 2017 - 81

SpecialReport: Mid-Continent Activity Profile
officer Russ Porter, "and it gives the
company a five-year timeline to prove
up, delineate and de-risk our acreage."
In addition to targeting the Meramec
formation, Gastar also is drilling in the
Osage and Oswego formations. "We have
at least five targets on our acreage," he explains. "The Osage is right below the Meramec. There are multiple horizons-the
Meramec, the Hunton, the Osage and the
Oswego. Everything except the Oswego is
sourced by the Woodford. It is all the same
system, sourced by the same formation."
Porter says Gastar has drilled 60
Hunton wells, two Osage wells and eight
Meramec wells. It is completing 14 more
Osage wells this year and is drilling and
completing another 10 in the Meramec.
The company's 2017 drilling plans also
include 30 STACK wells in the varied
horizons. "Everything is one-mile laterals,"
he mentions. "These are in the normally
pressured window, and we have found
one-mile laterals are the most efficient."
Gastar's production is roughly 45 percent crude oil, Porter indicates, with the
remainder split evenly between natural
gas liquids and dry gas. He says Gastar
is drilling one well on each unit to hold
the acreage by production and plans to
increase density tests in the future.
He predicts the company's leasehold
will support six Meramec wells on each
section, and four-eight Osage wells, four
Hunton wells, four Woodford wells and
two-four Oswego wells a section. Some
of its acreage includes all of those horizons,
Porter says, and about half its acreage is
prospective for the Meramec.
Gastar is operating three rigs in the
STACK, he indicates. Two are drilling
Osage wells, which Porter suggests will
attract more attention as the play continues
to develop. The other rig is targeting the
Meramec.
Mississippian Lime
Many Mid-Continent companies will
recall how, several years ago, the Mississippian Lime-which stretches from northern Oklahoma into Kansas-had a reputation as the next big play. However, acknowledges Klee Robert Watchous, president of Palomino Petroleum in Newton,
Ks., that prediction did not come true.
"When out-of-state operators came in

Palomino Petroleum has shot 3-D seismic over almost all its 200,000 acres in west-central Kansas and relies heavily on that data to ascertain where to drill next. Although
Palomino is targeting the dolomite within the Mississippian formations at about 4,500
feet mostly through vertical drilling, it also has begun a horizontal drilling program.

and called it the Mississippian Lime, it
taught us that the formation could be
drilled horizontally," he recounts. "But
they paid too much for the acreage and
thought they could drill anywhere."
By contrast, Watchous says, his company focuses on seismic data to pinpoint
the best areas. Palomino is targeting the
dolomite within the Mississippian formations at about 4,500 feet with a mostly
vertical drilling program in west-central
Kansas, specifically Ness, Gove, Trego,
Scott and Logan counties. He points out
the company has 200,000 acres "scattered
all over the place."
According to Watchous, Palomino,
which will celebrate its 50th year of business
in 2019, was very active in Kansas from
2012 to 2015 before lackluster commodity
prices curtailed its drilling program, along
with those of many small Kansas operators.
"Those still in the business have survived
the last two-and-a-half years," Watchous
says. "We believe better days are ahead."
Although it is not abandoning its vertical drilling program, Palomino recently
has drilled its first horizontal Mississippian
well, he reports. "It is very early, but we
are cautiously optimistic," Watchous expresses. "We have not tried this before,
but the results are encouraging."

Alongside that horizontal well, he
states, Palomino has drilled four vertical
wells in 2017, all of which have been
completed naturally or have used acid
stimulation. Although the foray into horizontal drilling is new for the company,
Palomino is considering more such projects, Watchous reveals. "You have to
change how you do things," he advises.
"We want to extract reserves more quickly.
Necessity is the mother of invention, and
horizontal drilling is more efficient in
certain situations. If you can drill one
horizontal well versus multiple vertical
wells and drain the same area, then it is
more economical. You have to be selective,
however, knowing which area to drill.
We are still very early in this process."
Moreover, Watchous offers, Palomino
will make the most of being associated
with WW Drilling, a drilling company
owned by Watchous and his business
partner, Nicholas P. Gerstner. Although
it serves Palomino, Watchous says, WW
Drilling also actively drills for many
other companies.
Watchous says Palomino has shot 3-D
seismic over the vast majority of its acreage.
The 3-D data, along with the geologic information, are the major factors that determine where to drill, he describes.
❒
MAY 2017 81



American Oil and Gas Reporter - May 2017

Table of Contents for the Digital Edition of American Oil and Gas Reporter - May 2017

Contents
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American Oil and Gas Reporter - May 2017 - Contents
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