Falcon Oil and Gas Summary - # 5 Posted By: JR~EWING
Canada’s Falcon Oil & Gas Ltd. began drilling operations on its
seven-well program in Hungary in November 2005. Falcon’s corporate
offices are based in Denver, but it operates the deep gas project in
Hungary through its wholly owned subsidiary Hungarian TXM Energy
LLC, based in Budapest.
The company has two exploration licenses covering 2,329 sq km
(575,263 acres) in south central Hungary, near the border with
Romania (Fig. 1).
In January 2005, Falcon/TXM acquired the first license to explore
and drill 955 sq km (235,885 acres) in the Tizsa area from Mako
Energy Corp.1 The Tizsa license initially became effective June 11,
2001, was set to expire on Dec. 31, 2005.
In June 2005, Falcon/TXM acquired a license over 1,374 sq km
(339,378 acres) in the Makó area from Mako Energy. The Makó license
was initially awarded Sept. 29, 1998, and was scheduled to expire on
Dec. 31, 2005.
On Dec. 12, Falcon announced that the Hungarian government extended
both the Tisza and Makó exploration licenses through Dec. 31, 2007.
Well permits are issued by the Mining Bureau in Budapest and signed
by the Mining Captain in Szolnok.
The play
The Makó basin trends northwest and is flanked by the Algyo
structural high on the west and the Battonya structure on the east.1
Allan D. Laird, director at Falcon and managing director of TXM,
told OGJ that the company views the play as a basin-centered gas
accumulation (BCGA), similar to the Jonah gas field and Pinedale
anticline in Wyoming’s greater Green River area. Ben Law originated
the BCGA concept in the 1980s while he worked for the US Geological
Survey.
This Hungarian basin has a geopressure gradient of more than 0.65
psi/ft, slightly less than that in the Green River basin. The rocks
are also extremely hot, Laird said, in the range of high 300s-low
400° F. These are “expensive wells, in extreme conditions.”
Falcon says that John Gustavson of Boulder, Colo.-based Gustavson
Associates Inc. assigned a potential resource of 796 million bbl of
oil and 17.5 tcf of gas to two key Miocene formations within the
Makó Trough: Szolnok and Endrod.
These are very thick sections of young (10 myo) sandy rocks, with
permeabilities in the 0.1-1 md range. Wyoming’s Upper Cretaceous
Jonah field, in comparison, has a permeability of only 0.01 md.
Miocene is considered very young for a BCGA, the youngest known,
according to Ben Law.
Rigs, pipe
In June 2005, Falcon/TXM signed two drilling contracts with
Croatia’s Crosco Drilling & Well Services Co. Ltd. to drill three
wells in Hungary and secured options to drill four additional wells
with two different rigs. Crosco will drill two or three shallow
wells in the Tisza license area with its 4,000 m (~13,000-ft
capacity)
Rig 403 and one to four deep wells in the Makó license area with its
8,000 m (~26,000 ft) Rig 801.
Rig 403 was brought in from Croatia and Rig 801 was brought from
Albania, where it had been working for Occidental Petroleum Corp.
(OGJ, Dec. 19, 2005, p. 47). Falcon/TXM added a top drive to Rig 403.
In the same month, Falcon signed a $10 million purchase order with
Aberdeen-based broker, Apex Tubulars Ltd., for 182,000 ft of drill
pipe, casing, and other materials, primarily from German and Russian
mills.
“These casing contracts are a key element of our drilling program,”
said Laird, after signing the contracts, adding that premium casing
is difficult to find right now.
Hungarian drilling requires pipe and equipment suitable for the high-
temperature, high-pressure conditions. Expected well conditions are
based on two key offset wells: the Hod-1 well in the heart of the
trough and the Makó-3 well in the south.
The Makó basin discovery well was drilled in the 1960’s. Although
there is limited gas composition data available from the Hungarian
geological survey, Laird said that the company did not expect any
H2S. There is a possibility of CO2, however, which raises the
possibility of corrosion.
Geophysics
Falcon/TXM has an aggressive 3D program, Laird said, primarily
vibroseis. The company uses Budapest based GES for acquisition and
some processing. GES was formerly a part of the national oil company,
Magyar Olaj-Es Gazipari (MOL), privatized in the 1990s.
The company bought and reprocessed another 3D seismic dataset from
MOL in early 2005, covering the north edge of the Tisza area. Falcon
uses Gustavson Associates for some of its geophysical processing.
Falcon/TXM also ran three seismic surveys in 2005:
• A 63 sq km, 7 x 9 km survey around Makó in spring.
• A 16 sq km survey in summer, over wetlands in the Tisza area.
• A 95 sq km survey, the largest to date, in the Mako area in the
fall.
In February 2006, the company will begin the fourth seismic survey,
in the Makó area.
Based on the seismic data, the company initially selected the Makó 5
well location and the Pusztaszer and Szekkutas locations (Fig. 1).
Operations
Falcon/TXM set conductor in both license areas in late October 2005.
Crosco used Rig 403 to spud the Pusztaszer-1 (P-1) well (Fig. 2) and
Rig 801 to spud the Makó-6 well.
Falcon upgraded its previously announced drilling locations based on
new data from summer seismic programs. The P-1 well is an Sshaped,
directional well, planned to avoid a nearby national park and
wetlands, and drilled with downhole motors.
In January, Falcon’s President and CEO Marc A. Bruner said “both
rigs are making good progress...and the operations team has
proceeded to construct the next surface location at Szekkutas-1.”
Halliburton is on location to provide drilling and project
management.
Schlumberger is providing cementing and logging services.
Laird told OGJ that the company would move Rig 403 to the
Szekkutas well location from the P-1 well site in late January or
February. This rig is limited to drilling the shallower locations on
the basin margin, and the Szekkutas location is on the eastern edge.
The Makó-6 is a nearly vertical well, planned to test a four-way
closure. It will take about 4 months to drill, and the rig will be
ready to move in March 2006 to another Makó location (4, 5, or 7).
More than 10,000 wells have been drilled in Hungary, with major
discoveries in the 1950s-70s. Falcon/TXM’s activities could spur
more. The company says it is learning a lot from recent drilling and
expects significant breakthroughs and higher penetration rates than
seen in the past, thanks to the updated drilling equipment.
References
1. Lencioni, L.C., Resource Evaluation Report on the Makó Trough
Property, Hungary (N151-101),
Mar. 15, 2005.