Modern Shale Gas Development

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This presentation gives a very high level summary of shale gas development.

Modern Shale Gas Development

  1. 1. Modern Shale Gas Development Presented by: J. Daniel Arthur, P.E. ALL Consulting Presented at: Oklahoma Independent Petroleum Association Mid-Continent CBM & Shale Gas Symposium December 8, 2009 Tulsa, Oklahoma 1
  2. 2. Unconventional Natural Gas• Unconventional Resource plays are a growing source of Natural Gas in the U.S. • Coal Bed Methane • Tight Sands • Gas Shales• Since 1998, Unconventional Natural Gas has increased nearly 65%1• Through 2007, total gas from Unconventional Plays approached almost 50% of total Natural Gas production in the U.S.1• For Gas shales, key technologies have included Horizontal Drilling and Hydraulic Fracturing 1 Source: Navigant, 2008 Source: John Perez, Copyright ©, 2008
  3. 3. Shale Gas History• First Commercial Gas well – Fredonia, NY (1821) – New York’s “Dunkirk Shale” at a depth of less than 30 feet• Ohio Shale – Big Sandy Field (1880)• Antrim Shale commercially produced (1930s)• Hydraulic Fracturing used in the Oil & Gas Industry (1950-60s)• Barnett Shale – Ft. Worth Basin Development (1982)• Horizontal wells in Ohio Shales (1980s)• Successful Horizontal Drilling in Barnett Shale (2003)• Horizontal Drilling Technology Applied in Appalachian Basin, Ohio and Marcellus Shales (2006)• Active Companies in the Marcellus Shale Play – Chesapeake Energy, Fortuna Energy, Range Resources, North Coast Energy, Chief Oil & Gas, East Resources, Cabot Oil & Gas, Southwestern Energy Production, Atlas Energy, Energy Corporation of America (ECA), and others.
  4. 4. Shale Gas Plays in the United States 4
  5. 5. The Natural Gas TrifectaThree factors have recentlymade shale gas productioneconomically viable:• Advances in horizontal drilling• Advances in hydraulic fracturing• Increases in natural gas prices 5
  6. 6. Horizontal Drilling• Computer-Driven, State-of-the-Art Technology allows for Horizontal Drilling• Horizontal Drilling allows for Access to a Greater Volume of the Shale Gas Reservoir• Access to a Greater Volume of the Reservoir makes Shale Gas Development Economically Viable Source: John Perez, Copyright ©, 2008
  7. 7. EIA - Shale Gas Outlook United States Unconventional Gas Outlook (Bcf/day)• By 2011 most reserves growth will be from shale gas• By 2030, 18% to 28% of domestic natural gas production will come from shale gas 7
  8. 8. Shale Gas Geology• Organic-rich shales previously regarded as source rock and seal for conventional reservoirs• Shale formations function as both reservoir and source• Shale’s typically produce dry gas (>90% methane) Marcellus Shale Outcrop• Low matrix-permeability must be overcome 8
  9. 9. Data Comparison of Shale Plays Gas Shale Basin Barnett Marcellus Fayetteville HaynesvilleEst. Arial Extent (sq. mi.) 5,000 95,000 9,000 9,000Depth (feet) 6500-9500 4,000-8,500 1,000-7,000 10,500-13,500Net Thickness (feet) 100-600 50-200 20-200 200BTW (feet) ~1200 ~850 ~500 ~400TOC, % 4.5 3-12 4.0-9.8Total Porosity, % 4-5 2-8Gas Content, scf/ton 300-350 60-220Water Production (BWPD) 0Well spacing (Acres) 60-160 40-160 40-560Gas-In-Place (TCF) 327 1500 52 717Reserves (TCF) 44 262-500 41.6 251Est. Gas Production (mcf/day/well) 338 3,100 530 625-1800
  10. 10. Shale Gas Environmental Issues• Land disturbances• Large-volume hydraulic fracturing: • Water sourcing, transportation and disposal • Fracturing fluids employed• Groundwater protection• Drilling and production in urban settings• Naturally occurring radioactive material (NORM)• Noise• Etc. 10
  11. 11. Vertical Drilling – Single Well Pads• Up to 16 - well pads (2 acres each) needed to recover the natural gas resource from 640 acres – 40 acres per Well• Multiple Roads with pipelines and utilities required to access the wells• Total surface disturbance is ~45 acres
  12. 12. Horizontal Drilling - Reduced Footprint• 6 to 8 Horizontal Wells anticipated drilled from each 1 to 3 acre pad• One Road with pipeline and utilities to well pad• Approximately 85% Less surface disturbance than Resource Recovery with Vertical Wells
  13. 13. Good Neighbor Drilling• Horizontal Drilling allows Energy Companies to Avoid Homes and Schools by Drilling from a Mile, or more, away• Where Avoidance is Not Possible, Measures can be Implemented to Reduce Disturbances due to Drilling Activities such as Noise and Lighting
  14. 14. Controlling Noise Sound Blankets and Sound Walls can be used to Control Noise Associated with Drilling Activities
  15. 15. Directional Lighting• Illuminates Wellsite for Worker Safety• Directed Downward and Shielded to Prevent Illumination of Residences, Public Roads, and Buildings
  16. 16. Hydraulic Fracturing• Necessary due to low matrix permeability• Fractures created must remain in the target zone• Fracturing out of the target zone is not cost effective: – Adds extra cost to stimulation job – Could adversely affect productivity of the well 16
  17. 17. Pre-Fracturing Evaluations• Geology & lithology• Coring and core analysis• Geophysical logging• 3D Seismic• Correlation Analysis• Fracture gradient analysis• Etc. 17
  18. 18. Optimizing Hydraulic Fracturing• Process is optimized for each new play based on feedback from new wells influencing: – Modeling of stimulations – Monitoring – Effective Example Output of a Hydraulic Fracture Stimulation Model. Source: Chesapeake Energy Corporation. treatment 18
  19. 19. Fracture Fluids• 98-99.5% of slickwater fracturing fluid is water• Each additive has an engineered purpose• And proppant (sand) 19
  20. 20. Fracture Fluid Additives Volumetric Composition of a Fracture FluidSource: ALL Consulting 2008. 20
  21. 21. Life-Cycle Water Management• Water sourcing• Treatment/reuse/disposal of residual waste water• Flowback % varies by basin and within basins (most fracturing fluids remain in the target shale) 21
  22. 22. Total Water Use – 4 Major Shale Plays Total Water Industrial Public Power Shale Gas Use Shale Play and Irrigation Livestock Supply Generation Wells (Billion Mining Bbl/yr) 82.70% 4.50% 3.70% 6.30% 2.30% 0.40% 11.15Barnett 2.30% 1.10% 33.30% 62.90% 0.30% 0.10% 31.9Fayetteville 45.90% 27.20% 13.50% 8.50% 4.00% 0.80% 2.15Haynesville 11.97% 16.13% 71.70% 0.12% 0.01% 0.06% 85Marcellus 22
  23. 23. Water Disposal Options by Basin WaterBasin Class II UIC Reuse/Recycle TreatmentBarnett Local Limited Yes/PartialFayetteville Distant Evaluating Yes/EvaluatingHaynesville Local No LimitedMarcellus Limited/Exploring Yes/Developing Yes/Evaluating 23
  24. 24. Produced Water- UIC Disposal Options• Class II UIC wells are the primary means for management of produced water from gas shales• In areas new to O&G development, existing commercial SWD wells may not yet be available• Some areas (e.g. the Marcellus & Fayetteville shale plays) are geologically challenged with limited available injection zones• Some areas take considerable time to get permits − New York & Pennsylvania 24
  25. 25. Produced Water Treatment Options• Distillation/ Evaporation – To concentrated brine – To crystalline salts• Reverse osmosis• Treatment and recycling 25
  26. 26. Treatment Option Limitations• All approaches have limitations, primarily: – Quality and quantity of water that can be treated – Waste volumes and management: › Concentrated brine from D/E and RO › Salt crystal from D/E – Economic viability• Generally, as the TDS of the produced water increases, the volume of useable treated water decreases and waste increases 26
  27. 27. Produced Water Treatment and Reuse• Many operators and service companies now considering viability of partially treating flowback water sufficient for reuse in the next fracture job• Controlling factors may include: – TDS – Scale producing sulfates – Chemical requirements of next fracture job 27
  28. 28. Benefits of Treatment and Reuse• Reduces treatment costs compared to that required for more demanding uses• Reduces volume requiring disposal and hence costs• Reduces water sourcing and transportation demands 28
  29. 29. Groundwater Protection• The target zone fractured Christmas Pipeline to Flow Process Tree is separated from USDWs Surface and Storage by considerable vertical Cement Casing Intermediate thickness (thousands of Cement Casing feet) of confining strata Tubing Production Casing• Further protection is Cement provided by multiple Oil or Gas Zone Well casing strings and cement Fluids Perforations Vertical Producing Well 29
  30. 30. Naturally Occurring Radioactive Materials (NORM)• Shales naturally contain low levels of NORM• NORM generally remains in drill cuttings or scale• Radiation levels are low (these are not NRC levels of exposure)• Pose little practical risk to general public who normally would not be exposed to oilfield equipment for extended periods of time 30
  31. 31. Invitation to Read 31
  32. 32. Contact Information Dan Arthur darthur@all-llc.com ALL Consulting 1718 S. Cheyenne Avenue Tulsa, Oklahoma 74119 www.ALL-LLC.com 32

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