Viability Of Brown Dense Oil Field a Mystery

by Luke Jones  on Monday, Jun. 4, 2012 12:00 am  

Local Effects
Southwestern's stake in the play is by far the largest.

"They beat the competition out of the gate," said Tom Daily, a Fort Smith lawyer who represents the oil companies.

Unlike the rush for acreage seen in the Fayetteville Shale, other companies didn't race to beat Southwestern for its share.

"Southwestern succeeded in securing such a strong lease position so quickly that I'm sure it discouraged a lot of the potential competition," Daily said.

He noted that because the Brown Dense wasn't as vast as the Fayetteville Shale, it was easier for Southwestern to secure a dominant lease position before other companies realized what was happening.

Southwestern's big stake did have an immediate effect on local landowners. County Judge Atkinson said Southwestern's exploration left Columbia County landowners with a lot of cash they didn't have before. However, Atkinson said the energy companies' exploration efforts weren't as dramatic as he expected.

"They spent a lot of money and leased a lot of land, but I haven't seen as much activity as I anticipated," he said. "I'm not saying it's not coming, but the community expected an overflow of equipment. It hasn't happened yet."

Atkinson is still hopeful, as successful prospecting would "have a domino effect in the community" as newly employed oil workers patronize local restaurants and hotels and companies buy equipment and supplies - the kind of economic activity that started in the Fayetteville Shale about six years ago.

"We are waiting," Atkinson said. "We hope they haven't decided to go anywhere else."

Whether or not the Brown Dense exploration will be another boom for Arkansas is a question that won't be answered for a while.

"We're seeing the very infancy right now of exploration in this play," Ratchford said. "We're pretty sure there's going to be residual oil in the Brown Dense. The question is more of engineering - how are we going to get it out of the rock economically?"

In the best case, Larry Bengal said, the wells will prove the formation to be viable and the energy companies will begin drilling in earnest. Bengal said the worst case would be if only the Louisiana portion of the Brown Dense turned out to be viable, leaving Arkansas dry of the attached economic prosperity.

"That would even be worse than just not being productive in Arkansas," he said.

Now there's not much to do but wait until Southwestern finishes its testing in the Brown Dense. Ratchford said he hoped the exploration proves a success.

"We're still importing 50 percent of our nation's oil," he said. "Don't ever forget that."

(Correction, June 6, 2012: The headquarters location of Border Exploration LLC was incorrect in the original version of this story and has been corrected.)



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