Sam Karlin with The Advocate, recently reported that Marathon Oil has acquired more than 250,000 net acres in several new plays, among them a “largely contiguous” position in the Louisiana Austin Chalk at a cost of less than $900 per acre. “Critical to our long-term value creation and full-cycle returns, we captured future potential opportunities through low-cost exploration acreage additions, including a material position in the emerging Louisiana Austin Chalk play,” Marathon Oil President and CEO Lee Tillman said.
ConocoPhillips also recently announced its position in Louisiana’s portion of the Austin Chalk formation, which stretches across Texas through the middle of Louisiana. The formation had little leasing activity here for two decades until the past year or so when EOG Resources announced last fall it had lease 130,000 acres and drilled a test well.
Kirk Barrell, president of New Orleans-based Amelia Resources, said his firm sold 85,000 acres of leases in the Austin Chalk play to Conoco in December for $87 million. Since then, interest in Amelia’s additional 360,000 acres has increased significantly. He said EOG is continuing to lease. Conoco’s exploratory wells are expected to be in East and West Feliciana parishes.
PetroQuest Energy from Lafayette is another company that has announced lease purchases in Louisiana’s portion of the Austin Chalk. Briggs said Redhawk Holdings Corp. and Blackbrush Oil and Gas also have positions in Louisiana.
It remains too early to tell whether the recent activity will spur a resurgence of onshore drilling in Louisiana and whether it will extend across the state. So far, the exploratory well from EOG only provides insight into the area around Avoyelles Parish. But Briggs said leasing also is picking up west of Avoyelles in the larger Master’s Creek and Brookeland fields in central and western Louisiana. Those fields hold the keys to boosting the state and region’s economy, he said.
One of the challenges facing the Austin Chalk is that the formation is more difficult to drill in Louisiana than in Texas, Briggs said. That’s the biggest thing that will “keep us from becoming Texas,” he said, as drillers have to work harder to find suitable areas of the formation for drilling.