THE OIL AND GAS RESOURCE PLAY REVOLUTION AND HOW IT AFFECTS THE ECONOMY OF THE RIO GRANDE REGIONMichael L Davies - October 17, 2012
Agenda• Introduction• What are Oil and Gas Resource Plays• How Oil and Gas Resource Plays are Exploited• The effect of Resource Play development on the Rio Grande Region• Acknowledgements
What is a Resource Play The Continuous (Unconventional) Hydrocarbon Trap (East Texas Field)The location of many Continuous accumulations of oil and gas have been known for many years due to previous exploration efforts forConventional hydrocarbon deposits. Advances in horizontal drilling and fracture stimulation technologies have made these resourceseconomically accessible to the industry. The job of the exploration geologist is to find areas within the continuous deposit where thehydrocarbons can extracted economically .
How do Oil and Gas Companies Exploit Resource Plays (Continuous Reservoirs)
Oil and Gas Well Production Depends on Several Factors• The Thickness of the Reservoir Rock open to the well bore• The Permeability of the rock material that contains the oil and gas (The Reservoir Rock) – How easy is it for fluids to flow the rock material• The viscosity of the fluid that is flowing through the reservoir rock – water flows through a permeable medium more easily than cold molasses.• Reservoir Pressure – The deeper the reservoir rock is buried the more pressure it contains and the more push that can be applied to fluid movement. Advances in Horizontal Drilling and Fracture Treatment Technologies have allowed the oil and gas industry to target and improve the first two production parameters shown above.
INCREASING RESERVOIR THICKNESS Using specialized tools, operators can drill the reservoir horizontally rather thanvertically, effectively increasing the thickness of the reservoir section open to the well bore. Also where geologic conditions exist, thickness can be increased by stacking a sequence of resource reservoirs in a vertical well bore.
INCREASING RESERVOIR PERMEABILITY (HYRAULIC FRACTURING) Fluids and Sand are pumped into the well under high pressure which fractures the reservoirrock. The fluid carries the sand into the fractures, propping them open, so that oil and gas can flow from the reservoir into the well.
What is the Impact of Resource PlayDevelopment on the Rio Grande Corridor
San Juan Basin Resource Play Development in the San Juan Basin of NW New Mexico Paleo-Geography of North Americaduring the Late Cretaceous (85 MYPB) Ron Blakey, Colorado Plateau Geosystems
San Juan Basin Cretaceous Dakota Structure 6000 Durango & Outcrop CI: 1000’ (500’) 40 00 0 -1 50 0 40 00 Aztec 4000 Shiprock Bloomfield -50 -10 0 00 0 1000 2000 Oil Prod. Gas Prod. Area Area 3000 San Juan Basin Production San Juan Basin 0060 40 6000 00 120,000 6,000 50 Liquids, MBbls/Month 00 100,000 5,000 Gas, MMCFPM 00 80,000 4,000 60 60,000 3,000 600 40,000 2,000 Gallup 0 20,000 1,000 0 0 40 01/70 01/76 01/82 01/88 01/94 01/00 01/06 00 MCFPM BOPM BWPM Grants Cum: 31 TCFG & 364 M²BL The majority of SJB production is from the Cretaceous with minor contributions from Jurassic and Pennsylvanian Rocks.
Gallup Target Section Niobrara Age 4800’ – 5500’ TVDUpper Cretaceous Time-Startigraphic Section – San Juan Basin NW New Mexico and SW Colorado
Activity• A few horizontal wells have been drilled in the gas area of the San Juan Basin that have found huge amounts of natural gas reserves, but, because Natural Gas prices are so low development is on hold.• The oil prone area is under active development by several companies including Hunt Oil. So far the results are positive but the play is not yet considered commercial.
Greater Permian Basin Resource Play Development in the Greater Permian Basin SE New Mexico and SW TexasPaleo-Geography of the Western USduring the Early Permian (287 MYPB) Ron Blakey, Colorado Plateau Geosystems
GREATER PERMIAN BASIN RESOURCE PLAY MAP STRATIGRAPHIC COLUMN YESO SHELF 1st BONE SPRING ABO SHELF Cline Sh Map Area
EAST TO WEST CROSS-SECTION ACROSS GREATER PERMIAN BASINA A’ EL Capitan Present Day Surface Sea Level Resource Plays Central Basin Platform West East The resource plays in the greater Permian A’ Basin are concentrated in Lower PermianA (Leonardian & Wolfcampian) and Pennsylvanian aged Rocks.
499 Greater Permian Basin Drilling ActivityOil Gas Map Area
Acknowledgements• I wish to thank my colleagues at Hunt Oil Co. without who’s help this presentation would not be possible.• I also want to thank the Re-Energize Americas Conference and New Mexico State University for the invitation to give this presentation.