Named after a stream that was dubbed “Barnett Stream” by a late 19th century settler, John W. Barnett, the Barnett Shale formation is one of, if not the largest onshore natural gas reserves in the U.S. It also contains a sufficient amount of oil that has only recently become commercially viable to drill for. Although the shale is very hard, causing the formation to be considered “tight” in regards to drilling, there have reportedly been very few dry holes, primarily due to the advances in 3D Seismic Imaging and other technologies in recent years.
The commercial viability of drilling, plus a good past record or low dry hole numbers, means that the Barnett Shale formation is a good target for potential investors looking for investment opportunities with companies drilling in North Texas.
What Area does the Barnett Shale Formation Cover?
Located in the Fort Worth Basin, the formation affects 25 counties, according to the Texas Railroad Commission. Those counties include Denton, Johnson, Tarrant, Wise, Archer, Bosque, Clay, Comanche, Cooke, Coryell, Dallas, Eastland, Ellis, Erath, Hamilton, Hill, Hood, Jack, Montague, Palo Pinto, Parker, Shakleford, Somervell, Stephens, and Young. Only Denton, Johnson, Terrant, and Wise counties are considered “core counties,” though others are active. It is estimated to span over 5,000 square miles west and south of Dallas.
Interestingly enough, much of the formation lies directly below DFW, which has introduced political and technological hurdles to accessing the oil and natural gas below. In an effort to take part in the profits being pulled out of the ground, efforts have been made to drill public land with mixed results. There have also been concerns regarding cleanup and the damaging of infrastructure by large equipment.
Who’s Drilling Oil and Gas Wells in the Barnett Shale?
As of October 2014, the Texas Railroad Commission reports 248 operators in the Barnett Shale Newark, East Field. Some of the largest producing operators are Devon Energy, Chesapeake Energy, XTO Energy, EOG Resources, Enervest Operating, LLC, Quicksilver Resources, Carrizo Oil & Gas, Inc., Legend Natural Gas IV, Premier Natural Resources II, and Barnett Shale Operating. It’s unlikely that private investors will be approached by these larger companies, but many others are likely seeking private, accredited investment in their drilling projects.
What Types of Drilling are being Used?
Because the field is made up of hard shale, recent developments in horizontal drilling and hydraulic fracturing have been the main drivers behind increased production and commercial viability in the Barnett Shale formation. Vertical wells are still being drilled, but they are certainly the minority.
Horizontal drilling allows the operators to reach reservoirs in places that vertical drilling would not, such as under the city of Fort Worth. It also increases production. Hydraulic fracturing, which is a technique used to create the fractures that improve production, allows for many wells to become economically feasible to operate whereas otherwise they would be abandoned.
Investing in the Barnett Shale
As mentioned previously, the Barnett Shale formation is considered by many experts to be the largest onshore natural gas field in the nation, with quite a bit of oil to go around, too. That means that there will be drilling going on here for a long time, by a lot of operators. New companies are still being formed and coming into the play, so there will likely be no shortage of investment opportunities, either, for quite some time.
Invest, but invest wisely. Make sure to read through our oil investment insider’s guide and go through the legit meter process with any opportunities you consider.