Chattanooga Shale Natural Gas Field - Tennessee Shale Formation
The Chattanooga Shale is located in Eastern Tennessee, Northern Alabama,
Southern Kentucky, and Northeast Georgia. In Alabama, this Natural Gas Formation is located below the Floyd Shale which extends
2,500-6,500 feet below the earths surface. The Chattanooga Shale, while still in its infancy, is a fairly small
gas shale play in the USA but companies such as Atlas Energy ATN, CNX Gas Company CXG , and GeoMet GMET
are actively pursing this shale deposit. These companies are snapping up Mineral Rights ( Drilling Rights ).
Location - Aside from many
misspellings, Chatanoga Shale, Chattanoga Shale, Chatanooga Shale, this Natural Gas Shale has been around and known about
for a long time. Only several years ago did geologists discover one thing. The Chattanooga Shale Formation does
not stop at the Tennessee and Kentucky state line. The Chattanooga Shale Field is actually an
extension of the Appalachian Basin Devonian Shale, which is known to most as the Marcellus Shale. As described in the above paragraph, the Chattanooga Shale also extends in Alabama as well. The area in
Alabama is referred to the Black Warrior Basin.
The Devonian Chattanooga Shale is an organic, hydrocarbon rich shale found throughout Eastern Tennessee. This
productive horizon is located beneath the Mississippian Fort Payne Limestone at a depth of between 3,000 and 4,000 feet. The
shale thickness ranges from 80 to over 200 feet and is thought to be the source rock for the hydro-carbons produced from many
of the conventional reservoirs in Tennessee. The Chattanooga Shale is the stratigraphic equivalent of the Lower Huron found
in Eastern Kentucky and West Virginia.
The Chattanooga Natural Gas Field in eastern Tennessee averages 80-200
feet in thickness. As you go North into Kentucky, the Chattanooga Shale thickens greatly to over 1,000 feet and
holds rich areas of natural gas in shale, mainly in southeastern Kentucky. The thin Chattanooga Shale in eastern Tennesee
and the combination of higher natural gas prices have sparked a lot of interest in Tennessee for drilling in this area.
Companies believe this shale formation could be very profitable due also to the new stimulation techniques like fracturing
and horizontal drilling. Gas is trapped in the shale rock. Drilling companies drill a vertical well followed by a horizontal
directional drilling technique. The natural gas is then extracted and run through various pipelines.
Atlas Energy recently came out with news regarding their wells in the Tennessee Shale. They state that drilling a
3,000 foot shale well has an expense of around 1.1 million in the Tennessee region. These gas wells are capable
of stabilized production into a pipeline of between 300 and 500 million cubic feet per day.
Companies involved in the Chattanooga Shale Play - Chattanooga Shale Stocks
- Atlas Energy ATN - Atlas Energy ATN has a strong presence at Chattanooga Shale - Atlas Energy has accumulated 105,000 net acres
located in Eastern Tennessee. The Company believes that its acreage contains up to 500 potential horizontal drilling locations
in the Chattanooga Shale. Furthermore, most of this acreage is prospective from conventional reservoirs, such as the Monteagle
(Big Lime), the Fort Payne Limestone, the Stones River and the Knox Group, for which the Company believes it has up to 750
locations.
- CNX Gas Company CXG - CNX Gas has acreage in the Chattanooga Shale Play - In the Chattanooga Shale,
CNX Gas drilled three horizontal wells in the quarter, bringing the yearly total to seven, and the project total to eight.
No wells were connected during the September quarter, although the fifth well was connected last week. The first four wells
are seeing current daily production rates of 230, 160, 100, and 230 Mcf per day, for a total of 720 Mcf per day. The daily
rates for the better wells have been stable. The latest well was drilled and completed for only $900,000. CNX Gas will be
performing micro-seismic work in the fourth quarter in order to better understand the variances in individual well production. Two conventional wells were also drilled in Tennessee in the September quarter. CNX Gas has two rigs drilling in the
Chattanooga Shale for the remainder of the year in the areas that have shown better initial results.
- Range Resources RRC - Range Resources tested the Floyd Shale section of the Chattanooga Shale Field - Let me quickly
update you on the three plays in which we’re followers. In the Floyd Shale play Range has 50,000 acres in Alabama. We
drilled one vertical well there last year. We tested the Chattanooga
Shale section and it was disappointing. The well was abandoned without testing the Floyd Shale. It was written off in the
fourth quarter as a dry hole.
- Chesapeake Energy CHK - CHK is testing Chattanooga Shale Formation - The Alabama shale plays, we were targeting both the Conasauga
and Chattanooga and we are drilling our second
well there in our 50-50 partnership with Energen and in respect and deference to them, I will let you approach them for information
about that play. We are the operator but they have home team there and so we'll move on from that.
- GeoMet Inc. GMET - GMET has acreage in the Chattanooga Shale Natural Gas Field
- At our Garden City Chattanooga shale prospect
we had drilled five core holes and three production wells at the end of 2007. Since then we have drilled our first horizontal
well in the prospect area and plan to drill two additional horizontal wells and one vertical well in 2008. We expect to connect
three wells to gas sales this quarter in order to facilitate longer term testing. We are continuing to expand our 72,000 gross
acre lease old position in this area. At our
Garden City Chattanooga shale prospect we had
drilled five core holes and three production wells at the end of 2007. Since then we have drilled our first horizontal well
in the prospect area and plan to drill two additional horizontal wells and one vertical well in 2008. We expect to connect
three wells to gas sales this quarter in order to facilitate longer term testing. We are continuing to expand our 72,000 gross
acre lease old position in this area.
Energen EGN - CHATTANOOGA SHALE WELL UNDER WAY - Energen Resources' new Chattanooga shale test well, the Westervelt
19-2 #1 located in Tuscaloosa County, Alabama, has been drilled to a vertical depth of approximately 8,700 feet and logged.
The company plans to drill a 3,000-foot horizontal leg, test the well, and make an assessment of the Chattanooga shale's economic
viability this summer.
Energen also has re-entered the Marchant well in Bibb County as a means of cost effectively evaluating
the Conasauga shale potential in Alabama. The Marchant well was drilled to a total depth of 12,400 feet in 2008 in conjunction
with Chesapeake Energy Company; as reported in December 2008, the well had good shows on the mud logs and 6-8 potential pay
zones but did not produce meaningful amounts of gas when operator Chesapeake fracced the lowest interval at 11,500-11,700
feet. Results of additional testing in the Marchant well will help the company determine the feasibility of drilling a new
well in the Conasauga play, as originally planned.
