Hunton Field Yields Oil, Mysteries

By RUSSELL RAY World Staff Writer - 3/12/00

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Beneath the red dirt and clay of central Oklahoma, oil producers have unearthed a new, abundant reservoir of crude oil with unknown potential. Some wells within the huge oil play are producing as much as 300 barrels of oil each day, a phenomenal feat compared with the marginal production (typically 10 barrels or less per day) of many Oklahoma oil wells. And as producers and royalty owners rake in the profits from these gushers, one University of Tulsa professor is trying to unlock the secrets of the Hunton Formation, a largely unexplored underground reservoir of oil and saltwater.

"We really have discovered a new formation -- a new oil reservoir -- which is a rarity in Oklahoma," said Mohan Kelkar, a professor of petroleum engineering at TU. Using a $3 million grant from the Department of Energy and $9.4 million from Tulsa-based Marjo Oil Co., Kelkar is studying the characteristics of this "unusual" oil formation to determine the best way to recover oil at a reasonable cost. "If we can understand it and come up with better production techniques, we can really optimize the production from this reservoir," Kelkar said. For years, the Hunton was ignored by producers because the reservoir contains large amounts of saltwater. The expense of removing that water was too great, most people thought.

Normally, water production rises and oil production falls during the life span of an oil well. In this case, however, oil production is rising, not falling. "With a traditional reservoir, the oil cut will normally go down as time goes by," Kelkar said. "Why should the oil cut go up?" That's the question Kelkar is trying to answer. Kelkar contends that the oil is trapped deep within small pores of the rock. Once the water is removed, the oil expands, Kelkar said.

"Most of the water is in fractures or faults. So, when you drill the well, the first thing that comes out of the reservoir is water," Kelkar explained.

"Once the water is drained out, then the oil will start coming out of the tight rock.That's why you get improvement in the oil cut." Kelkar's theory hasn't been validated, but it may be the best explanation for the reservoir's strange reaction. Oil from the Hunton Formation is currently being produced in Lincoln County's West Carney Field, which covers about 30,000 acres. But the Hunton is much larger, covering 2.2 million acres throughout central and western Oklahoma. "This has huge potential for turning around Oklahoma's oil economy, "Kelkar said. "Other states have similar formations." But before oil can be produced in profitable volumes, producers must first find an affordable way to dispose of massive amounts of water. Some oil companies, including Altex Resources Inc., already have mastered the process.

The San Antonio-based company uses high-capacity saltwater disposal wells, each of which are tied to multiple oil wells. Some disposal wells are capable of handling as much as 3,500 barrels of saltwater each day, said Kim Booth, Altex operations manager. "We have incredible infrastructure in place for displacing this water", Booth said. But the cost is expensive. At each site, the company spends more than $1 million on disposal wells, pipelines and other infrastructure before starting production. Kelkar said he will examine the use of a downhole separator to remove the excess water and dispose of it into a lower formation. Such technology could lower disposal costs, Kelkar said. Altex operates about 165 oil and gas wells in central Oklahoma. "A lot of them go up" in production, said Alan Stracke, a petroleum engineer for Altex. "Wells that started out making 20 barrels a day now make 40 barrels two years later."

The find surprised many veteran geologists, including Charles Mankin, director of the Oklahoma Geological Survey. "The conclusion was that there wasn't any oil there," Mankin said. No one knows how much oil can be recovered from the Hunton Formation, Mankin said. The reservoir is in the early stages of development. "It certainly is big," Mankin said. "How big it is remains to be seen. I don't think anyone has tested the limits of this yet." Altex is the 15th largest oil producer in the state. "Our goal is to be No. 1," said Tom Chernicky of Altex. Altex is one of a handful of companies that have targeted oil in the Hunton Formation for production. Some companies are recompleting many of the old oil wells that were abandoned long ago. Altex and New Dominion LLC of Stillwater are finding a lot of oil and gas in the Hunton, but their production technique calls for the installation of high-capacity disposal systems. "That's the key to their play a good disposal well so they can handle a lot of fluid and get a lot of oil at the same time," said Mac Alloway, a longtime independent oil producer. "They're reinventing the wheel." Reminiscent of oil's earlier boom days, drilling rigs manned by roughnecks and roustabouts dot the countryside off Interstate 44 in Lincoln and Seminole counties. "I went to the cafe and it was full of oil-field people, just like 20 years ago," said independent producer Tom Oly. "It was exciting." The surge in oil activity has created jobs for rural residents and additional revenues for area schools and county governments. At Carney Public Schools, enrollment has never been higher, said Debi Thompson, school board president. "Our tax base has gone up," she said. For Jim Kinder, owner of Kinder Dozer Service Inc. in Carney, the newfound oil supply has created "tremendous cash flow" for his construction business. In 1996, Kinder employed five people. Today, the business employs 25 and has expanded its fleet of bulldozers, dump trucks and backhoes. "We've got a boom going on here," said Lincoln County Commissioner Ted O'Donnell. The county receives monthly revenues from the state's gross production tax on oil. Over the past year, those revenues have grown from $2,900 a month to more than $31,000 a month, a hike driven primarily by the rising price of oil. But landowners like Willis Dirks and his wife, Jerry, may benefit the most from central Oklahoma's gushing oil supply. In 1996, the couple bought 80 acres near Carney. Each month, they receive a plump royalty check for oil produced from two wells on their land. "It's made our life comfortable," said Willis Dirks, a retired truck driver.

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