A Report on Operation in Unconventional Play with special reference to OIL’s Niobrara JV
Shale plays first come to mind when one considers unconventional resources. These unconventional
resource plays may yield natural gas, gas condensates, and crude oil. Some of the more noteworthy
shale plays in North America include the Bakken, Eagle Ford, Marcellus, Fayetteville, Woodford,
Niobrara, Haynesville, Horn River, and Utica formations. Tight gas, coalbed methane, oil sands, and
heavy oil are non-shale unconventional resources……………………………………………………………….OIL USA Team
Introduction
This Report has been prepared to give an idea about the amount of activities that has been undergoing
in a typical unconventional play in US.
Also we have discussed here on different aspects of drilling in unconventional plays and methods
adopted for gathering information from a drilled well giving
special reference to operation in Denver basin, where, Oil India
Ltd. (OIL) has formed a JV with Carrizo Oil & Gas (Carrizo), a
Houston based company, to explore and develop an
unconventional play known as Niobrara Formation in the state of
Colorado. USA.
Presently, main activities are concentrated in Weld County. The
targeted formation is Niobrara ‘B’ Bench, however, ‘A’ and ‘C’
Benches are also tested and initial results are encouraging.
Niobrara Formation
The Niobrara shale formation is situated in northeastern
Colorado and parts of adjacent Wyoming, Nebraska, and Kansas.
Primarily an oil play, it is in the Denver (Denver-Julesburg) Basin,
which has long been a major oil and gas province.
Companies have been producing resources from Niobrara for
more than 100 years, but the formation is considered a young play because much of the oil and gas was
inaccessible until very recently. Like many other recent oil and gas plays, horizontal drilling techniques
and hydraulic fracturing have opened up the Niobrara formation to new production possibilities.
Exploration History in Colorado & neighboring States
Oil and gas have been produced from the Denver Basin since the discovery in 1901 of oil in fractured
Pierre Shale at the McKenzie Well, part of the Boulder oil field in Boulder County, Colorado.
The great majority of Denver Basin oil and gas fields produce from Cretaceous sandstones, although the
Permian Lyons Sandstone is also a producer. Oil has also been produced from Permian sandstones and
dolomites and Pennsylvanian limestone in the Nebraska part of the basin.
Weld County
The Wattenberg Gas Field, one of the largest natural gas deposits in the United States, is a basin-
centered gas field just north of the Denver metropolitan area.
The field has produced more than 4.0 TCF
of natural gas from the J Sandstone, Codell
Sandstone, Niobrara Formation, Hygiene
Sandstone, and Terry Sandstone (all
Cretaceous). In 2007, the field made 11
million barrels of oil and 170 BCF of gas
from more than 14,000 wells, making it
the 9th largest source of natural gas in the
United States.
Biogenic natural gas is recovered from
shallow gas fields (less than 3,000 feet) of
the Niobrara Formation in Yuma, Phillips,
and Washington counties of northeastern
Colorado and Cheyenne and Sherman
counties of northwestern Kansas. To date,
2,900 wells have produced 470 BCF of gas.
Drilling is currently very active, and the
play is expanding into Perkins, Chase, and
Dundy counties, Nebraska.
Colorado has 52,768 (Oct’14) active wells, out of which
21,731 wells are in Weld County. Total area of Weld
County is 4,022 sq miles (10,417 km²), hence, average
density is 2 wells/km² (approx.). Colorado Oil & Gas
Conservation Commission has permitted 2468 and 1842
wells for drilling during 2013 and 2014 respectively in
Weld County alone. All these permitted wells are
unconventional. In May’14, oil production in Weld County
is 6.2 million barrels (monthly cumulative production).
The success story of Shale Oil/Gas in Colorado
More than 1,500 barrels of crude oil per day gushed from
the “Jake” oil well when EOG Resources drilled and
fracked the well into the Niobrara shale in northern
Colorado in the fall of 2009. That gusher marked the
beginning of one of the biggest oil booms in the state’s
history.
These booming shale oil and gas plays are all successful
because of advances in fracking and horizontal drilling
technology and the speed with which companies are drilling new wells.
Hydraulic Fracturing
Hydraulic fracturing is a method used to increase the production of oil or natural gas from a reservoir.
In many unconventional plays, the
oil or gas is trapped within low
porosity or permeability rock such
as shale or tight sands. Hydraulic
fracturing uses high pressure fluid
(i.e. water) and a Proppant (i.e. sand
or ceramics) to create fractures in
the rock and prop them open,
enabling the trapped oil or gas to
flow towards the production well.
Micro-seismic Frac’ Mapping:
Micro-seismic monitoring is
increasingly accepted as the best
method to observe and track the
creation of fractures in a reservoir.
By locating micro-seismic events
associated with the fractures, it is
possible to determine the geometry of a fracture and the effective production volume, observe any
interactions with existing faults and monitor for
events locating out of zone.
Micro-seismic activity is measured using arrays of
geophones positioned in a nearby observation
well (Listening Well) or using an array of near-
surface sensors.
Observation in a Carrizo Well
Listening well = Sohio State #1 (Old Vertical Well) Monitored = State 36-24-9-61 (Horizontal Well)
Majority of events within 500’ most within 250’,
indicating half Length is less than 750’
Event tendency is towards east (Event
Shadowing) due to location of the listening well
Significant Stress changes along the wellbore
with event alignments from 44 to 114 deg.
Pumping Truck
Wireline Truck Water Table
Geophone
s
Well
Fractures Micro-seismic Events
(In Color) Shale/Tight Formation
Above is an ELAN process results with PEX-ECS showing log response against main producing zone, i.e.
Niobrara ‘B’ Bench, along with two secondary target zones, Niobrara ‘A’ & ‘C’ Benches. Log suit
recorded in some of the key Carrizo wells are shown below –
• Array Induction-Platform Express
• Caliper
• CBL-VDL
• CNL-Litho Density-Platform Express
• DIL-SP-GR
• ECS
• HNGS
• Microlog-Platform Express
• Triple Combo-Platform Express
• FMI
• Sonic Scanner
Crude Oil Characteristics (Single Well Sample from Carrizo well)
Specification Test Method Units Results
API Gravity API 60/60 33
RVP @100 Deg F D323 PSIG 5.9
Sulfur D2622 WT% 0.490
Visual Appearance - Viscous, Dark Brown
Niobrara ‘B’ bench (Chalk)
Main Producing Zone
Niobrara ‘A’ bench (Chalk)
Secondary Target
Niobrara ‘C’ bench (Chalk)
Secondary Target
Rotary Sidewall Cores in a Carrizo well (50 nos. approx. from different depths) – Cores are used for
Azeotrope Cleaning, Core Photo, X-Ray Diffraction, Thin Section, VR & RockEval, Fluid Sensitivity test,
etc. and collected mainly from Niobrara ‘A’, ‘B’ and ‘C’ Benches.
Above, a typical Mud Log (Log created using Lplot VH Version 3.0) showing sample photographs, Drilled
Depth in TVD & MD, Azimuth, Inclination, GR, Lithology, Formation Tops, Gas Reading, Gas Composition
in ppm, CO2 in ppm, Mud (in/out), ROP (ft/hr), identification of possible faults, etc.
Niobrara ‘B’ Bench Rotary
Sidewall Core Sample
Frac’
stages
AFE (Authorization for
Expenditure) - Planned
(in Million $)
Average MD
(in Feet )
Average TVD
(in Feet)
11 3.22 9093 6015
13 3.46 9966 6015
14 3.78 10750 6190
15 3.83 10571 6211
16 3.83 10932 6329
17 3.86 11044 6300
18 4.21 11634 6375
22 4.67 13168 6324
25 5.07 13814 6430
26 5.25 14042 6344
27 5.32 13673 5900
Above Table shows well cost against Frac’ Stages vis-à-vis Depths in MD & TVD. These are actual data
derived from Carrizo wells drilled in Niobrara JV area. Majority of the wells have been drilled in 14 to 16
stages. As can be seen, the well cost largely depends on number of Frac’ stages and lateral lengths.
Status of the Niobrara JV
As on October’14, Carrizo has completed and brought into production 110 wells. There are other
partners (JV Non-Operators), who are also active in the play. Along with Carrizo, OIL has participated in
57 completed wells of Noble Energy and 16 wells of Whiting Petroleum Corporation and 1 well of
Continental Resources. Further, OIL has given consent for participation in additional 100 wells to be
drilled by above operators.
Various kind of experimentation is in progress to maximize production in Niobrara Play. Main effort is to
optimize lateral length, stages to be fractured, well spacing along with frac’ fluid, Proppant quantity,
pressure to be applied in fracking, etc. Apart from Niobrara ‘B’ Bench, wells in new formation like
Niobrara ‘A’ and ‘C’ Benches have been tested.
At the time of acquisition in 2012, Niobrara wells were having 160 acres well spacing. There is a
continuous effort to downspace the wells and see the production results. Now, the wells are drilled in
40 acres (300 ft) spacing. Individual oil tracers have been run to determine the effect of fracture
stimulation and possible interference in the adjacent wells.
Not necessarily in every well, but in key wells advanced wireline logs have been recorded for evaluation
of different properties of targeted formation.
Carrizo has identified several discreet areas (prospectivity-wise) within Niobrara JV and evaluated
development potential and economics separately. Areas are ranked based on geologic/petrophysical
quality, activity level and production results. So-Phi-H (oil saturation-porosity-thickness) maps have been
generated for determination of hydrocarbon pore volume to identify future focus areas.
As per Carrizo’s estimate, with 80 acres spacing, there are 355 future net wells available for drilling
within ‘B’ Bench in Niobrara JV area. If wells completed in ‘A’ and ‘C’ Benches become successful, then,
about 100 more wells can be added for future drilling.