Savoy Energy Corporation, an oil and gas company known for the re-working of previously abandoned sites, is focusing on getting oil and gas from source rocks. The primary emphasis is in the Texas Cretaceous Trend, the largest single pool field in Texas, which has already given up over 1.2 billion barrels. The plan is to establish long-term, maintenance-light production from existing completions, providing the cash flow to then push into areas where proven resources have yet to be exploited.
Of particular interest to Savoy is the Eagleford Shale Formation in south Texas. The oil quality in the company’s focus area varies from heavy to very desirable high gravity crude. In most cases Savoy plans to pull oil from above the 11,000 foot level. The company believes it can pull from 5,000 to as much as 140,000 barrels from a single vertical well, depending upon natural fractures, with the entire initial target area holding hundreds of millions of barrels. However, identifying the best spots is key to effective recovery.
Savoy has several properties in Gonzales County, Texas, which it considers prime for tapping Eagleford resources. Their Savoy/Louis Zavadil #1 well generated up to 35 BOPD (barrels of per day) on tests back in 1978 before being plugged in search of higher deliverability. The best long-term producing Eagleford well in Gonzales County produced over 8,700 barrels per year for 9 years, plus an average of 5,378 barrels per year for another 5 years. This shows a decline that is relatively slow, suggesting significant opportunity for profitable long-term development.
Savoy isn’t the only company that sees potential in the Eagleford. Apache Corporation (NYSE: APA) has begun fairly widespread production there and is now producing approximately 200 BOPD from the Eagleford since commencing operations in December, 2007.
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