The Cline Shale in West Texas will play a big role in a market rebound, according to the E&P company First Titan Corporation, which is eyeing further acquisitions in the region.
The Cline Shale, is a deep oil play east of Midland, Texas which underlies ten counties: Fisher, Nolan, Sterling, Coke, Glasscock, Tom Green, Howard, Mitchell, Borden and Scurry County, Texas. Initial estimates set the total recovery as high as 30 billion barrels, although the play is not without its problems. One of them is the depth of the deposits, which would add as much as $1 million to drilling costs than a typical (shallower) Wolfcamp well. Also, some analysts question the high recovery estimates. Speaking to Platts, Benjamin Shattuck, research analyst at energy consultants Wood Mackenzie, said: “I don’t think we would agree that’s a viable number. Twelve to 18 months ago, the Cline was the next big thing. But the data just wasn’t there to support it.”
Despite the doubters, exploration companies involved in the Cline – such as Pioneer Natural Resources and Range Resources – have been very complementary of the play. Range Resources’ Chief Operating Officer and Senior Vice President Ray Walker said they were “very encouraged” by the well drilled in the Cline Shale, adding “We haven’t seen any of the wells clean up like this [so]early.”
Now it seems that First Titan is also ready to bet on the Cline Shale.
Following signing a letter of intent to purchase a producing field in the Cline Shale region in October, First Titan Corporation has announced it is conducting due diligence that could lead to another important mineral rights acquisition deal in the surrounding area of west Texas. The company has already made the first steps towards adding these properties to its growing oil and gas portfolio. The Cline Shale is an extension of the legendary Permian Basin, long one of the most prolific onshore producing areas in the state and in the nation.
“We’re looking at some promising fields,” said First Titan’s CEO Sydney Jim. “The Permian Basin has a lot of life left in it thanks to the new drilling and production technologies now available and the Cline Shale will play a big role in a market rebound. We still have some serious due diligence ahead of us, but right now, we like what we see. Should the right opportunity arise, we will take advantage of it, as per our strategic long-term business plan.”
Geologists have rated the Cline Shale as one of the hottest oil and gas plays going at present, behind only North Dakota’s world-class Bakken region. The Cline Shale formation contains light, sweet crude – the type generally preferred by refiners as it is easier to process – and petroleum liquids.
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