Why Companies are Interested in Chattanooga Shale
The Chattanooga Shale is a geologic formation that extends beyond Tennessee. The formation is spread out in Eastern Tennessee, Northern Alabama, Southern Kentucky, and Northeast Georgia. The formation’s vast size and ancient age (the shale is over hundreds of millions of years old) has attracted plenty of attention from many geology enthusiasts for its rock formation and the clues that the layers can give us about life in pre-colonial America. However, the shale has also attracted attention from many oil and gas companies who came to the shale in search of oil.
Here are some reasons why oil and gas companies have taken an interest in the shale.
Cheaper to Drill
A lot of oil fields in the Chattanooga Shale are fairly shallow. This means that when drilling, companies do not have to drill so deep or try so hard to try to get the oil out. Deeper drilling usually costs more money, but since the oil in the Chattanooga shale is closer towards the surface, drilling costs are decreased and the oil is plenty.
Oil Rich Fields
Oil fields such as the Wayne Brown Property and Red Hill oil field have proven to be rich in the natural resource. On the Wayne Brown Property, over 260 barrels of oil are produced each day. Ever since the property was first discovered, the field has produced over $13 million dollars’ worth of oil in 2017 prices.
A field like the Red Hill oil field had an initial yield of 300 barrels after 24 hours of acid simulation. In oil fields that are less concentrated in oil, the output is still impressive. The Stover property produces close to 40 barrels per day. While it is not at the level of the Wayne Brown properties or the Red Hill oil field, drilling on the Stover lease is still a safe investment to make considering the low drilling costs.
Promise of More Oil
Countless amounts of geological surveys have shown that the Chattanooga shale still contains a lot of oil that has yet to be discovered. The geological findings have prompted companies to flock to the shale with the hopes of striking liquid gold. Combined with the lower cost of drilling in the shale, the return on investment is far too good from oil and gas companies to pass up on.
Ability to Drill for Oil at Home
Many companies that have started drilling in the Chattanooga shale are mostly companies headquartered in America. Being able to drill for oil in the home country as opposed to going abroad is cost effective since companies do not have to spend extra money on the cost of shipping drilling equipment overseas or the legal fees that can be incurred when learning about the oil laws in foreign countries. American companies drilling in America not only helps save costs, but it also helps boost the American economy which in turn will help oil companies fund more expeditions in the shale. Having the ability to fund more expeditions can lead to more success which in turn creates a cycle of economic success. The Chattanooga shale promises both oil and economic success. Being able to achieve both of those goals is a big reason why oil and gas companies have flocked to the region.
A Viable Long-Term Investment
The oil in the Chattanooga shale shows no intent of drying up anytime soon. There are still many areas to drill and many more areas to survey and research. Once a company sets up shop in the shale, they can be expected to stay for the long term considering the vast amount of oil that has yet to be extracted.
The Chattanooga shale continues to be a popular destination for oil and gas companies to drill for oil. As long as the promise of oil is still there and as long as there is land to be bought, oil and gas companies will be interested in seeing what the shale has to offer for years to come.