New Oil: The Giddings Gamble
The Austin chalk is the most perverse, contrary, incorrigible oil field known to man. The big oil companies tried it and gave up. But one man learned the way to make the chalk yield its secrets—and its oil.
James says: Who is that on the cover of the February 1981 publication ? I think his name is David Perkins, anfriend of my brothers from younger years. IF that’s him where is he now ? (October 21st, 2009 at 4:22pm)
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Elated by their success, the three men quickly staked two more wells, the Schkade No. 1 and the Carmean No. 1. Like the M&K, both the Schkade and the Carmean sites were chosen mostly by closeology, but with the Carmean there was a new twist: in picking the location of the well, Holifield used seismic data purchased from another company that had previously tried and failed to find oil in the area. Based on the resonances of sound waves, the data had been obtained by setting off twenty-pound dynamite charges buried at various locations some ninety feet below the earth. After passing through tapes and translation machines, the vibrations from the dynamite charges printed out on a piece of paper as a series of wavy lines layered one on top of the other, reflecting the various depths of the rock layers below the surface.
To the uninitiated, seismic charts look like hieroglyphics, but to a person trained to read them, the subtle differences in the wavy lines suggest much about what might lie beneath the ground. Because of the complexities involved, interpreting seismic is a whole profession in itself, usually performed by a geophysicist, not a geologist. But Ray Holifield was one of those rare geologists who could read seismic (he had picked up the skill while working in Louisiana). What he saw of the seismic in the area of the Carmean intrigued him, because it indicated the presence of a fault in the rock, which in turn suggested that there might be an oil trap of some sort nearby.
Again, luck seemed to be on the side of Holifield and Windsor/U.S. In December 1976 the Schkade came in, making oil at the potential rate of 783 barrels per day. That made it the best Lee County well so far. The Schkade also showed potential gas production of one million cubic feet a day. The oil well completion men danced in the glow of the automobile headlights shining on the well, hugging each other like little children. One month later, after announcing itself with a terrific blowout, the Carmean struck oil too. Though not as big a well as the Schkade, the Carmean had something else going for it: production in not just one layer of rock but two. Initial tests showed that the Carmean could produce 188 barrels of oil a day from the Austin chalk and 145 barrels a day from a deeper layer known as the Buda. This was the first indication that the Giddings field—if indeed it was a field—might have “multipay” zones of oil and gas, which would make it even more valuable.
A Question of Fault
Flying on the wings of their new discoveries, Holifield and Windsor/U.S. immediately planned to drill more wells. They also ordered seismic crews into the Giddings area to begin shooting their own seismic lines. The success of the Carmean well confirmed what Holifield had seen in the old seismic data and gave him a clue about what to go after next. In addition to looking for faults, he was searching for fracture systems, or “sweet spots,” places where the Austin chalk was fractured into thousands of tiny channels that trapped oil.
Theoretically, these sweet spots could be located almost anywhere. The one sure way to find out where they were—and where they were not—was to drill wells. But that could be quite expensive, especially since merely drilling and drilling increased the chances of dry holes. On the basis of what he had seen so far, Holifield developed a unique theory, that the fracture systems in the Austin chalk were located around faults. Through the use of seismic, Holifield could find the faults in the Austin chalk and, he hoped, the fracture systems that might be with them. The method of seismic interpretation Holifield planned to use to find the faults and fracture systems was his own trade secret. He did not explain it even to his clients.
Using Holifield’s seismic calculations, Windsor/U.S. drilled the Molly C. Davis well in the spring of 1977. Everything looked fine — until the drill bit had reached total depth and it came time to run the electrical log test to see if the well was worth completing. The test consisted of lowering an electrical measuring device into the hole to take continuous readings later printed out as parallel lines on the log chart. In oil- and gas- bearing zones, the electrical log’s two main lines, the “SP” or spontaneous potential line and the resistivity line, usually bulged out. But the lines on the Molly C. Davis log chart were almost as straight as railroad tracks. They were virtually no bulges showing oil and gas at the depths where Holifield’s seismic data predicted they should be. Windsor/U.S. had little choice but to plug the well and move on.
The next Windsor/U.S. well was called the Max Fariss No. 1. Like the Molly C. Davis, its location was selected using Holifield’s seismic charts. And once again everything went smoothly until it came time to run the log. Nothing but railroad tracks appeared on the chart. “I’ll carry out all the oil this well will ever produce in a wheelbarrow,” the tool pusher told Max Williams when he arrived on the scene.
The tool pusher appeared to be right. After three early successes it looked like Holifield and Windsor/U.S. had lost their touch. Whatever “secret” Holifield had discovered in the seismic data now seemed to be a false trail. Without seismic as their guide; Windsor/U.S. would once again be reduced to closeology and blind luck. “We were scared to death,” Holifield recalled later. “We were about to shut down operations.”
Then Holifield got to thinking. He was still confident of his seismic data, so the problem had to be somewhere else. If the Austin chalk’s oil was contained in natural fracture systems, it was quite likely that the cracks were clogged with drilling mud and natural debris. Perhaps these blockages were preventing the oil from flowing out. Down south, in the recent Frio County Austin chalk play, most of the few successful wells had been completed with a formation-opening process called hydraulic fracturing or simply “fracing.” First employed in the northern part of Central Texas in 1947, fracing was traditionally used to create fracture systems in layer of rock, but now it was being used to open up natural fractures as well. Fracing involved pumping huge quantities of sand and water down the hole. The water rushed through the clogged fractures, cleaning them out and opening them up. The sand, which shot through after the water, acted as a bracing agent for these newly opened orifices, much as wood beams buttress the ceiling and walls of an underground coal mine. Then the oil could begin to flow.
Fracing was a much bigger job than acidizing and about ten times more expensive. Fracing required setting pipe—lining the hole with steel tubing—and it required at least half a dozen trucks, huge amounts of sand and water, and all sorts of sophisticated equipment. It cost in the neighborhood of $80,000, or about one fourth as much as drilling the well. But Holifield knew that fracing was the only alternative, his only chance for turning the bad wells into good producers. Although Windsor/U.S. was already way over budget on the Molly C. Davis and the Fariss, he convinced Williams and Deal that is was worth a try.
The Big Break
The frac job on the Fariss No. 1 began in June 1977. As completion man Ted R. Ferguson described it, the operation was “like putting on a big opera.” The Western Company facing crew began setting the stage by digging a water-holding pond near the well, then hauling in three large yellow water tanks and a long yellow sand bin and lining them up several yards from the well. Next, the crew moved in an oblong blender machine, which hooked up the tanks, the sand bin, and the wellhead via a network of pipes. After that, the pumper trucks arrived, parked in a neat row at a right angle to the blender, and hooked onto the long pipe leading from the blender to the well. Finally, the frac van, the truck that housed all the control panels and the crew boss, pulled in next to the blender. With all the truck and machinery now arranged like section of the orchestra, the entire crew of twenty men put on headsets that kept them in communication with the frac van. The crew boss gave the signal for the well stimulation opera to begin, and the crew activated the blender, the water tanks, and the sand bin. The well site was engulfed by a nearly deafening whirring and clanging as the pumpers pumped and the water and sand began flowing into the hole.
Several hours later the water started to come back up, signaling the end of the process, and the fracing crew shut down. Holifield, Williams, Deal, and the drilling crew had nothing to do but wait. Then, slowly, the water began to show traces of honey-colored oil. Soon there was more and more oil in the water. The Fariss No. 1 eventually made initial production gauged at a rate of 717 barrels a day. Holifield’s secret theory about using seismic was on the mark. Just to make sure, Windsor/U.S. went back and unplugged the Molly C. Davis well and fraced it. The well came in, making 215 barrels of oil and just under half a million cubic feet of gas a day. “By this time,” Holifield recalled, “we were thrilled.”
Windsor/U.S. started drilling more wells, based on the new seismic it had shot since arriving in the Giddings area. Both the Schneider No. 1 and the Dean No. 1 struck oil, with the Schneider making a big producer. Now things were really rolling.
Then Deal and Williams had a falling-out. Their disagreement apparently revolved around who was raising the most money to drill and who was doing the most work for their mutual interests. Concluding that the could live better separately than together, Windsor Energy and U.S. Resources got a divorce in October 1977. From that time forward, Windsor and U.S. had only one thing in common: each company continued to consult with the only man who seemed capable of finding oil in the Austin chalk—Ray Holifield.
Holifield, for his part, tried to keep things quiet. He did not brag about his good wells, and he did not publish any professional papers explaining his theory of the Austin chalk. If larger and more experience companies realized what was happening, they would be able to gobble up adjacent leases ahead of Windsor and U.S. Resources. And if another bright geologist figured out how to use seismic to find the sweet spots in the chalk. Holifield would no longer have a monopoly on technical expertise. Instead of sharing his knowledge of the area as geologists often did, Ray Holifield kept to himself. He was what oilmen call a “tightholer.”
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