American Oil and Gas Reporter - June 2017 - 73

SpecialReport: Permian Basin Profile
vertical wellbores trims drilling costs by
about $1 million a well.
He reports Lilis has drilled and completed its first two operated horizontal
Wolfcamp B wells with initial production
rates exceeding management's expectations. The Bison No. 1H well was turned
to sales in January, and had a 24-hour
rate of 2,375 boe/d (75 percent liquids)
or 344 boe/d per 1,000 lateral feet. After
55 days on line, the company indicates,
the well was producing on a restricted
choke with more than 1,000 pounds of
flowing tubing pressure. The Bison's
6,897-foot lateral was completed with
35 stages and approximately 2,200 pounds
of sand per foot, Mirman says.
According to the company, the Grizzly
No. 1H well was turned to sales in February
and had a 24-hour rate of 1,666 boe/d (65
percent liquids) or 406 boe/d per 1,000
lateral feet. Its 4,103-foot lateral was completed with 20 stages and 2,200 pounds of
sand per foot. After 34 days, it was producing
on a restricted choke with more than 1,850
pounds of flowing tubing pressure.
Since then, Mirman indicates, the company has drilled two more wells, the
Hippo No. 1H and the Lion No. 1H. He
says the company plans to drill one well
a month in 2017 and two a month in
2018. He suggests its position in the
Delaware Basin features as many as seven
prospective benches: the Wolfcamp A,
B and C, as well as the Atoka, Strawn,
Avalon and Bone Spring.
"The Permian is here to stay for a
long time," Mirman contends. "We will
continue to press the gas pedal. We are
in a great place at the right time."

Orogrande Basin Project
Although many consider the Permian
Basin to be divided between the two
major sub-basins of the Midland and the
Delaware, Plano, Tx.-based Torchlight
Energy Resources Inc., is expressing
hopes to open a third. Torchlight and its
operating partner, Founders Oil and Gas
LLC, say they have signed a drilling and
development unit (DDU) agreement for
the Orogrande Basin Project. The companies signed the deal with the University
Lands organization, which manages the
surface and mineral interests of 2.1 million
acres of land across 19 counties in West
Texas for the benefit of the state's permanent university fund.
Torchlight CEO John Brda says the
Orogrande Basin lies west of the Delaware
Basin in far West Texas, a mere 30 miles

east of El Paso in Hudspeth County. According to UL personnel, the agreement
combines all the existing 192 leases covering
133,000 acres into one lease for development
purposes, making it one of the largest
DDU agreements UL ever has granted.
"We are targeting Pennsylvanian-aged
rocks at 5,200-6,000 feet," Brda explains.
"We believe there are between 600 and
700 feet of continuous pay. Based on our
tests, we believe its rocks and pressure
are similar to portions of the Permian
Basin, but the question is how we fracture
it. The rocks are more like reservoir rocks
than source rocks, based on porosity and
permeability. We think it will be an unconventional play, but we can put too
large a frac on it. Of course, we cannot
do too small a frac, either.
"The good news is, we have unprecedented visibility into the play and into
the particular geology underlying the
play," he continues. "Using state-of-theart technologies and operating procedures,
we have a unique ability to tailor our
well design on a well-by-well basis to
execute on the most derisked strategy
available. Of course, we never know
what will happen until we actually come
to operations, but we are only here-
taking our thesis to completion-because
we were able to identify what our predecessors could not. We have a second
mover advantage that is 20 years of macro
technology evolution in the making. We
are excited to stress test our designs and
local analysis, using the most aggressive

technological approach available against
this geologically complex formation."
He says Torchlight plans to drill two
horizontal wells in the Orogrande Basin
this year and four more next year. However,
the dearth of drilling activity in this part
of West Texas means the area's forerunners
have a lot to learn. "We will use slickwater
fracs, but will we pump 90 barrels a minute
or 50 barrels a minute?" Brda poses.
"That's what we need to figure out."
According to Torchlight, the drilling
obligation begins with one well in the
first year and increases to five wells a
year by 2023. The time to drill on the unit
runs through April 2023 on the first extension. The agreement also grants exclusive
rights to continue through April 2028, assuming compliance with the agreement
terms and payment of the extension fee.
"Based on the sheer size of this play,
its development by an independent under
multiple leases would be nearly impossible," Brda assesses. "The DDU creation
makes the Orogrande Basin Project manageable at reasonable cost and maximizes
the attractiveness of the play to potential
suitors in any future sale discussions."
He estimates the Orogrande Basin
project may contain as many as 2,000
drilling locations, depending on the number
of benches that prove economical. Brda
says the company plans to run its wells
with gas lift. "It is a whole new area, a
whole new play, and we own it all, right
in the heart of the play," he marvels.
"There is not much beyond."

Torchlight Energy Resources Inc. and its partner, Founders Oil & Gas LLC, express hope
that they can establish the Orogrande Basin in far west Texas. Torchlight says it believes
there are 600-700 feet of continuous pay in the Pennsylvanian-aged rocks at 5,200-6,000
feet.

JUNE 2017 73

American Oil and Gas Reporter - June 2017

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