The first discovery in the Western Anadarko Basin was made in April 1949 by Sinclair Oil & Gas Co. at its Lips #1 in northern Roberts County, Texas. The 9,557-foot wildcat tested a structural high that Sinclair had detected through seismic and gravity work. The company found oil in fractured Mississippian limestone, and the discovery initially produced a respectable 420 barrels of 38-degree paraffinitic oil per day. However, water rapidly began to encroach the reservoir. Sinclair drilled an offset in the section to the northwest and encountered a gas-producing zone in a Lower Pennsylvanian sand that posted a calculated open flow of 41 million cubic feet per day. Then, the company deepened the original well to 10,706 feet to test zones through the Arbuckle. The deep section was noncommercial, so it plugged back and recompleted the discovery in another Pennsylvanian sand for 3 million cubic feet per day. After drilling several more disappointing deep holes, Sinclair decided to concentrate on developing the gas-charged Pennsylvanian sands. Lips Ranch eventually blossomed into a major producing area in the Morrow, with some wells recovering in excess of 20 billion cubic feet (Bcf) of gas apiece. In 2003, the aged Lips Ranch properties were acquired by Latigo Petroleum Inc., a Tulsa-based independent. Formed in September 2002, Latigo was a relatively fresh face on the scene that was targeting acquisitions and opportunities in the Permian, Anadarko and Arkoma basins. The company bought interests in 21 Lips Ranch wells on 8,000 acres of operated leases from a small independent. The lands were in the northeast quarter of Courson Ranch, straddling the line between Roberts and Ochlitree counties, Texas. "At the time of the buy, the assets were producing a little more than 1.5 million cubic feet of gas and 17 barrels of oil per day," says Pat Curth, vice president of exploration. To all appearances, it was a tired, worn-out field slipping close to abandonment. The company thought it contained some overlooked potential, however. It liked the properties-which it calls Courson Ranch, after the surface owner-because of the multiple producing zones. Throughout 50-plus years of development, Douglas, Cleveland, Novi, Morrow and Mississippian reservoirs had all contributed to the field's production. The Morrow, by far the dominant zone, had been developed on 640-acre spacing, and the shallower zones had been spaced down to 160 acres. "The challenge out here, and the excitement, is that from surface to the deepest possible reservoirs, we are looking at from 10 to a dozen potential zones," says Curth. "When we acquired the properties we thought there was increased-density potential, but the big question was depletion." Latigo drilled its first well on Courson Ranch in mid-2004, and had three wells on production at year-end 2004 and another four wells in various stages of testing and completion. The program has enjoyed early success: Latigo has already nearly doubled production on the ranch to 2.8 million cubic feet of gas and 165 barrels of oil per day, from one new Morrow and two new Mississippian producers. And, the four wells undergoing testing and completing operations are very encouraging, says Curth. In the initial round of drilling, Latigo's goal was to learn as much as it could about reservoir depletion in the very mature area. "The geology is complex due to faulting. We suspected that the zones, particularly in the Morrow, were highly compartmentalized," says Mike Evans, exploration manager. If the prospective locations were indeed fault-separated, reservoirs in a new well could have much higher pressures than those in the surrounding wells. Also, two distinct Morrow sands seemed to occur across the field, separated by some 10 feet of shale. The company wanted to determine if that shale was a competent seal, or if the two sands were in pressure communication. The field's production history added to the complexity. As the original Morrow wells gave out, the previous operators would complete uphole in the Cleveland and Douglas sands. "We had a spotty production history of hit-or-miss zones across the field. We wanted to develop the shallower zones in addition to the Morrow, but there are different amounts of depletion from one part of the field to another in different zones," says Evans. A typical 11,000-foot Courson Ranch well to the Morrow interval costs $800,000 to $1 million to drill and complete, and it might encounter five zones of interest. "The good news is we have all these zones; the challenge is that we have to figure out what is depleted and what is not," says Curth. "We don't want to spend money to set pipe and attempt a completion without verifying the reservoir pressures." Compounding that issue were the pervasive lost circulation zones present throughout the heavily produced area. "We have to run 16 to 20 pounds per barrel of lost circulation material (LCM) at Courson Ranch," says Tony Swindell, manager of operations for Latigo's Tulsa district. "That plays havoc with conventional pressure-testing tools." Indeed, the usual method of checking pressure is with repeat formation testers, and although these tools are widely used in the industry, they can't handle high amounts of LCM. Fortunately for Latigo, a new pressure-testing tool was just breaking into the marketplace. Schlumberger had been developing its PressureXpress tool specifically for work in low-permeability reservoirs. The oil-service company introduced its tool in the second half of 2004, just as Latigo was kicking off its drilling program. "Our new tool provides pressure information in wellbores and types of rock that have heretofore not been appropriate for the conventional wireline-testing tools," says Reid Beecher, Tulsa-based Schlumberger engineer. Prior to the debut of the tool, pressure information in low-permeability rocks could not be dependably recorded. The pressure tester has several attractive features: it can measure formation pressures and record fluid mobility data very quickly, often in less than a minute; it can be run in combination with other tools; and it has a small diameter so it fits in smaller holes and doesn't have the differential sticking problems seen in larger-diameter tools. In addition, because the pretest phase can be controlled very stringently, the PressureXpress tool can successfully record pressures in high-LCM environments. The tool is designed with a sidewall packer that presses against the borehole. "We can test a virtually unlimited number of zones in a well. The operator picks the zones it wants to pressure test from the logs, and they are tested in the same run," says Beecher. Unlike conventional pressure-test tools, the PressureXpress does not sample reservoir fluids. That step is not practical in the low-permeability rocks that are its target. "We have certainly learned a lot since we've taken over this property, and the new pressure tool has helped us both in the drilling and completion programs," says Curth. On its first well, for instance, Latigo used the tool to test the pressures in the two distinct Morrow sands. "They had nearly identical pressures, which confirmed our suspicion that the two sands were joined somewhere in our area. It's something that we had to know, and it aided our understanding of the area." Another application has been in completion design. Latigo drilled one well in which it found the Morrow significantly underpressured. "The pressure test helped us alter our completion design," says Swindell. "We were able to keep a lot of fluid off the zone, and by doing that we made a decent Morrow well out of a very low-pressure reservoir." Latigo is very pleased with the cost savings it has realized. "If we had to perforate and break down five zones to check for depletion, that would run a minimum of $100,000," says Curth. "To test five zones for depletion with PressureXpress costs a fraction of that. The tool has come to us at the right time and the right place." Latigo has two rigs currently drilling on Courson Ranch. During 2005, it is planning to drill 20 wells there and shoot a 3-D seismic survey. It will continue to fine-tune its subsurface picture with the pressure information and data from each well. "It's a classic case of going into an older, densely drilled area and using the latest technology to give us an edge," he says. "We believe that there are considerable reserves left on the property, and we have a lot more locations that we plan to drill."

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