AFE Oil-CS 950117 WDS
WDS RESOURCES INC,
Reference: West Dallas County Barnett Shale
WDS Resources is continuing to expand its lease holdings in west Dallas County and the
surrounding area for the purpose of developing high volume natural gas production and large
natural gas reserves in the Barnett Shale. Each well, based on our studies and confirming data
from the Gas Research Institute, is estimated to have reserves in the range of 4BCF and is
expected to command a premium price due to its immediate proximity to the Dallas-Fort Worth
end user natural gas market
The Barnett Shale is the Largest single contiguous gas-condensate reservoir in the state of Texas. It
covers approximately 30,0000 square miles and it promises to become, in the near future, the
hottest on-shore drilling site in the United States. The Barnett Shale has been found to be hi*~dy
productive in nearby Wise and Denton counties based on the incredible perfomance of the
Newark East Barnett Shale Gas Field. The Newark field has produced over 40BCF of natural gas
and 58,000 barrels of condensate as of July 7, 1994; see Dwights' graph. Mitchell Energy
continues to add new wells in the Barnett Shale almost weekly.
The same Barnett Shale which is producing in the Newark East Oas Field is now known to exist in
west Dallas County with the top of the formation located at a depth of 8650' and the bottom
approximately at 9090'. The presence and location of the Barnett Shale in west Dallas County was
confnmed by analysis of Magnolia Petroleum's Trigg Estate Number One drilled, in 1955, to a
depth of 10,23I' close to thc intersection of Valley View and Beltlinc Roads near DFW Airport.
Our Geologist, after examination of the dry samples of the Ma~olia well, has confirmed that our
Dallas County locations have probable natural fractures greater than those in the Newark East Gas
Field. Data available from the Gas Research Institute confu'ms the probability of this fracture
advantage which is based on the theory of increased fractures due to the nearby Ouachita
over-thrust which runs on a north-south l/ne through Dallas County. See the Geologic Report.
Careful consideration of the economics suggest a twenty year life span for each well and, based on
anticipation of higher natural gas prices in the near future and the advantage of end-user
proximity, we can expect each wen to gross $16,000,000.00.
Readers should be aware that this reporter, as the Senior Vice President of W'DS Resources,
stands to gai3~ from the completion of this project; however, I have reported the facts as I know
/~~n the facts, I do recommend this project without refiervation.
Pe~oleum Engineer
5025 Arapaho Road, SuiPo $50, Dallas, roxos 75248
(214) 661-8885 - Fax (214) 661-1618
GEOLOGIC REPORT
CALLEJO BARNETT PROSPECT
DALLAS COUNTY, TEXAS
INTRODUCTION
During the last ten years, the Barnett Shale has become a significant gas
target in the Fort Worth Basin area. The primary objective of this project
is the ubiquitous shale play of the Barnett. The full economic potential of
the shale play has not yet been realized especially eastward toward the
Ouachita foldbelt. The ~'allejo Project is the first deep well activity in
Dallas County since 19~SS. It is located.in the northwest part of Dallas
County, on the JNO E. Holland A-614 survey, of 130 acres. The project is
situated offsetting production and the foldbelt. The Callejo project will,
for the first time, tap this viable source of gas.
PRODUCTION HI STORY
Mitchell Energy Corporation and several other companies have had a
intensified exploration program for the last ten years pursuing the Barnett
Shale in Denton and Wise Counties. The Newark East Field, which the
£allejo Prospect offsets, has so far produced 40 billion cubic feet of gas
and 58,000 barrels of condensate from 130 wells (see Dwights' graph).
Mitchell Energy's success has been amplified by the development of a
completion technique that was developed in conjunction with the Gas
Research Institute. Mitchell Energy has completed and stimulated over
100 wells in the Barnett shale using a massive hydraulic fracture
treatment. This completion technique should extend to other areas of
potential Barnett Shale production including Dallas County.
REGIONAL GEOLOGY
The Barnett Shale is a Mississippian shale deposit during the subsidence of
the Fort Worth Basin by continued collision of the North American and
South American/North African tectonic plates to form a super-continent
called Pangaea.
The extreme eastern margin of the Fort Worth Basin is obscured by
metamorphic, overthrust rocks of the Ouachita foldbelt. This orogeny was
initiated in Late Mississippian time and is approximately contemporaneous.
with the deposition of the Barnett Shale. The'sea inundated this shelf area
and the southern Oklahoma aulacogen. The dark organic muds and a few
thin limestones of the Barnett were deposited along this adjacent shelf
area to the aulacogen. The shale thickens to the northeast and east toward
the aulaco(~en.
BARNETT SHALE OF DALLAS COUNTY
Only one well in Dallas County, the Trigg Est. ~1, has been drilled deep
enough to reach the Barnett shale. The well was drilled by Magnolia
Petroleum Corporation in the spring of 1955. From recently studied well
samples, the Barnett shale in the Trigg well is similar to the Denton and
Wise County wells. The shale is 440 feet thick and is a black, dense, soft,
organic-rich shale. The shale has interbedded thin units of black to white,
microcrystalline to massive limestones and light brown, very fine-grained
sandstones. These beds may also be conduits for better gas production in
the shale.
Fractures were found approximately perpendicular to bedding planes filled
with calcite. Other microfactures were along bedding planes either being
filled with calcite or bedding planes propped open with cavity calcite
crystals along the edges.
The Barnett shale has several distinctive log characteristics. In general,
resistivity values of shales are usually Iow; about iO ohms, but the Barnett
shale resistivity values are high around 1 O0 ohms. The Barnett has an
anomalously strong gamma ray count between 150 to 400 APl units a
result of uranium salts. The microlog shows some cross-over which
suggest probable microfracturing.
CONCLUSION
A Gas Research Institute study indicates that a 160 acre reservoir of 250
feet to 300 feet of Barnett Shale reservoir should recover I to 1.5 billion
cubic feet of gas. With over 400 feet of shale in the Trigg well, the
recoverable reserves should be substantially higher with as much as 4
billion cubic feet of gas and a plus for drilling this project. Based on the
development of the Barnett Shale in Denton and Wise Counties and based on
analysis of the Magnolia Petroleum, Trigg Est. ~1 well, the Callejo =1 is
an exciting prospect with an excellent upside. Additionally, effort should
be made to reenter the Magnolia, Trigg well.
Charlotte D. Klenk
Petroleum Geologist