While exploration in Oklahoma has been declining since 1981,
exploration activity in Michigan's Prairie du Chien natural gas
strata has been steadily increasing, receiving the attention of
Michigan independent operators and integrated oil and gas companies.
Oklahoma City-based Grace Petroleum Corp., which is a
participant in 10 of the 40 wells completed on the play, is among
the more active companies.
Exploration for hydrocarbons in Michigan is nothing new. Major
oil and gas companies had district offices in the state since the
1920s, when oil was produced from shallow reservoirs.
But the Prairie du Chien was too difficult to explore because
the seismic technology was not advanced enough to strongly reflect
The Prairie du Chien is the subject of controversy because the
formation's limits are not defined. In some counties, the upper
sands produce, while in other counties, the lower or middle sands
produce, said Doug Strickland, assistant vice president and chief
geologist for Grace, a subsidiary of W.R. Grace & Co.
"There's a lot of stratigraphic variation, especially at the top
of it (the Prairie du Chien)," Strickland said. A "zone of
unconformity" made up of several sands rests on top of the Prairie
"What we don't know is: Are these separate sands, or a reworked
part of the Prairie du Chien?"
The Prairie du Chien stretches over 24,000 square miles in
Michigan and is situated at depths varying from 6,400 feet to 11,600
The Prairie du Chien is part of the Ordovician system and is
equivalent in a time sense to the Arbuckle Group, Strickland said,
though the Arbuckle is a carbonate formation while the Prairie du
Chien is a sandstone formation.
"You almost have to prospect by seismic claim," Strickland said.
Most of the basin area is covered by glacial till, sediment left
in the path of the retreating continental glaciers. The till can be
as thick as 1,000 feet in some parts of Michigan, and distorts the
features of the formations below the surface, Strickland said.
Seismic technology advanced enough in 1985 that companies were
able to get a better idea of where the gas deposits were located,
Grace had a 50 percent success rate in exploratory drilling from
1983 to 1987, compared to the industry average of 35 percent in the
same time period. The company was successful in developmental
drilling 75 percent of the time, while the industry was successful
approximately 50 percent of the time.
"Seismic technology was the break that helped us get going in
this play," Strickland said.
Natural gas reserves can be found in Michigan at depths of 8,000
feet to 11,000 feet.
The Springer sand in Oklahoma is comperable to drilling in
Michigan, Strickland said. A 16,100 foot deep Springer well's
completed cost is $1.55 million, while a 9,000 foot deep Michigan
Prairie Du Chien well's completed cost is $1 million, Strickland
Michigan finding costs, which are the sum of accumulating the
leasehold acreage, the geophysical research and the drilling and
completion costs, are one-third of those in Oklahoma, Strickland
"You can get significant reserves for those depths and we're
also getting a good price for the natural gas," Strickland said.
While the spot price of natural gas in Oklahoma is $1.25 per
thousand cubic feet, the Michigan contract price is $2.20 to $3 per
thousand cubic feet, he said.
"A lot of that has to do with the Michigan market," Strickland
said. "You have some fairly significant local markets and it's a
friendly regulatory climate.
"Michigan is an importer of natural gas, so by developing
reserves in-state, you basically get a better price."
The Oklahoma natural gas, with its added transportation charges,
firms up the botton half of the natural gas price range in Michigan,
Strickland said. …