News

By Sergio Chapa
Reporter, San Antonio Business Journal

Following its recent success in the “Home Run Field” of Brooks County, Texron Operating LLC has put together another venture to drill its second well on the deep South Texas site.

The San Antonio-based exploration and production company plans to starting drilling its “Perez #2” oil well late this summer, having recently obtained a permit from the Railroad Commission of Texas.

In what is considered a “mature field,” the Perez #2 well is an offset to a vertical well that was originally drilled 9,700 feet deep in 1975.

Although the original well produced an average of 500 barrels of oil equivalent per day, it was plugged after a short production life, Texron President Johnny Day said.

“That well didn’t last long because it wasn’t using the propants and technology that we have today,” Day told the Business Journal.

Under the new project, Texron plans to drill further — to 12,700 feet — where the company will use modern techniques and propants to hydraulically fracture the Vicksburg and Loma Blanca Sands formations.

Day expects the new oil well to produce similar results to the company’s nearby Perez #1 site, which targeted the same formations.

The Perez #1 went into production on June 2015 with an initial production rate of 400 barrels of oil equivalent per day.

Although production at Perez #1 has tapered off since then, Day expects Perez #1 and Perez #2 to remain active for decades, unlike the original wells that were drilled on the land.

“Perez #1 will be there for 15 to 20 years,” Day said. “It won’t be making 100 barrels a day, but it will be making 15 to 20 barrels per day.”

Crude oil prices recently hit $50 per barrel before falling again below that mark. But Day said it is still a good price environment in that the price is high enough to make production profitable while low enough to secure good deals on drilling and service companies.

“Now’s the time to do it because rig prices are still great,” Day told the Business Journal.

Texron will be using a rig owned by Orion Drilling out of Corpus Christi for the Perez #2 project, along with services from San Antonio-based Energy First Engineering & Consulting.

Among the company’s partners for the new venture are Gulf Coast Western, Hew-Tex Oil & Gas, Seidler Oil & Gas and Millennium Exploration.

San Antonio Business Journal

Six-year low crude oil prices have become an opportunity for at least one San Antonio-based  company that is seeing healthy production numbers from a working interest partnership at a  mature field near Falfurrias. Johnny Day the president of San  Antonio- based Texron Operating LLC said Six-year low crude oil prices have become an opportunity for at least  one San Antonio-based company that is seeing healthy  production numbers from a working interest partnership  at a mature field near Falfurrias.

Texron Operating LLC successfully drilled the Texron  Perez #1 oil and natural gas well in the historic “Home  Run Field” in Brooks County.

The pre-existing vertical well originally went down approximately 10,000 feet below the surface  but Texron targeted the Vicksburg Sands formation another 2,700 feet down. Texron Perez #1  went into production in early June and is currently yielding 212 barrels of condensate oil a day and 1.72 million cubic feet of natural gas per day from the high-pressure sands.

The company’s president Johnny Day told the San Antonio Business Journal that the deal was two years in the making but is now paying off. “The well is currently on an 11/64 chokehold,” Day said. “We have a goose that’s laying golden eggs right now and we want to be prudent andnot pull the well too hard.” Day said his company did the geology work, secured the lease, obtained a Texas Railroad Commission drilling permit and put together the prospect.

With a multimillion-dollar price tag for drilling and completion, Texron teamed up with Gulf Coast Western as the majority partner in the project. Hew-Tex Oil and Gas, Global NRG and Team Texas Management were among the minority partners while San Antonio-based Company Energy First Engineering served as the engineering firm.

Drilling started in March and took 18 days to reach the target depth. The vertical well was perforated and fracked in three sections of the 200-foot thick Vicksburg Sands formation. Day said the well was drilled under budget noting that the downturn has created an opportunity for Texron through lower prices from rig and service companies.

“Lower oil prices, although we don’t like them, have created an opportunity for Texron by eliminating some of the price gouging through better competition while also freeing up some leases,” Day said. Texron is now looking to drill another Vicksburg Sands well on the Perez lease  as well as starting new projects in South and East Texas