Independent takes midsize gamble on Woodbine Play

Jason Lane’s “aha” moment came when a company asked about filing a seismic permit on land beneath the home he shared with his wife and daughter in the East Texas town of Brownsboro.

The process intrigued him, and soon he was working as a landman, negotiating with landowners to acquire mineral rights or develop other deals for oil and gas companies.

Sixteen years later, Lane and his small team at JBL Energy Partners are about to take another leap, launching their most ambitious move yet on 3,800 acres in the Woodbine Play just north of Houston.

After years of land deals and joint ventures, Lane’s company will serve as the operator on a series of wells planned for Leon County. Drilling on the first well is expected to begin in early February.

“It’s time to move ahead,” the 38-year-old Lane said. “You’re going to have a little more risk, but we don’t believe there’s much risk in the Woodbine.”

Just up Interstate 45 from Houston, the Woodbine is still little known outside energy circles and the courthouses in a cluster of counties where leasing has kept things hopping.

“The past 12 months have been busier than any time since I’ve been here,” said Grimes County Clerk David Pasket, a 24-year veteran of the job.

His office shifted records online this fall; until then representatives of oil and gas companies had to come into the office to determine owners of mineral rights on certain parcels of land.

“When you bring that many people in, they stay at local hotels, they buy gasoline at local stations,” Pasket said. “It has an impact.”

The Woodbine formation stretches across East Texas, but most of the current action is concentrated just north and northwest of Houston.

It was explored decades ago with conventional vertical drilling technology but, as has happened elsewhere, found a second life through the use of horizontal drilling and hydraulic fracturing.

The area is a stacked play with reservoirs at different levels, but Scott Pearson, an analyst with research and consulting firm Wood Mackenzie, said most operators target the Woodbine formation.

The latest round of activity began in 2006, and people really started to take notice over the past year or so.

And although a few larger independents are working in the area, Pearson said, the Woodbine is unlikely to become a target of the major oil companies.

That happened in the Eagle Ford Shale in South Texas, where small operators began leasing land, only to be eclipsed by large independents and the major oil companies later. But the Eagle Ford covers a huge area, 400 miles long and 100 miles wide.

“It’s not like other large-scale resource plays, where you can pick up hundreds of thousands of acres,” Pearson said of the Woodbine. “There’s definitely potential for people to build on their position, but as far as potential for one of the bigger guns to build on the play, it’s probably limited.”

But the prospects for hot new fields are practically unlimited, he said, as drillers return with new technology to areas that formerly produced conventionally.

Growing with the play

That’s fine with Lane and the rest of the management staff at JBL Energy Partners – land manager Matt McEachern, geologist and geophysicist Fred Hoffman and senior landman John Gilliland.

With decades of experience in the oil patch between them, they say it’s still fun to be in on the beginning of a new play.

In some ways, McEachern said, the Woodbine is the best of both worlds. In Leon County, where JBL is focused, landowners have been through previous rounds of drilling.

‘Reasonable to deal with’

“They’re reasonable to deal with,” said McEachern, a veteran landman who started working with Lane three years ago. “Over the last 50 years, they’ve been part of the process, as opposed to the newer shale plays, where there’s a really steep learning curve.”

Still, he acknowledged, leasing land in the Woodbine has become more competitive, especially as people hear about high prices paid for leases in the Eagle Ford and some of the other shale plays.

Lane said the fact that he has a farm in Leon County has helped.

“We contribute to the schools,” he said. “We know people.”

Lane launched JBL Energy Partners in 2004 and added an office manager the next year.

The company was growing by 2008 when he moved the office to Tomball, where he lives with his family, but it remains small, with about 15 employees.

But if the first few wells in the Woodbine – ultimately the company hopes to drill in 16 locations over the next two years – perform as he expects, Lane said the company could bump up to a new level.

“We want to be a midsize independent,” he said. “We want to be larger, to operate in three or four places at a time, rather than selling out some places because we can’t operate them.

“There’s only so much Fred can do,” he said, referring to the acreage he and other members of the team ask Hoffman to evaluate. “We’d like to do more.”