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APACHE CORPORATIONEXPERIENCES IN SHALE GAS EXPLORATION IN THE USA
George E. King9 August 2012
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Liquids Rich Examples Bakken, Eagle Ford, Monterey,
Bone Springs, Avalon, Utica? Barnett Oil Window
Gas Examples Marcellus, Barnett,
Haynesville, Horn River, Fayetteville, Woodford, Montney
TOP 20 NORTH AMERICAN SHALE PLAYS: SOME SIMILARITIES & MANY DIFFERENCES
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TECHNICALLY RECOVERABLE SHALE GAS
Kennedy, SPE 160855
In January 2012, US EIA Reduced TRR for shale gas from known reservoirs from 862 to 482 tcf
Why? Factual data replaced the estimates in the first analysis – Drilling and Production gives much better information.
5 Worldwide Unconventional GIP Resources, from Kuuskra (EIA – 2011) – Kennedy SPE 160855
(Gas in place!)
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Year % OGIP Recovery (OGIP = original gas in place)
Technologies Applied Shale in Development
Average gas price $/mmbtu
Shale Gas Tech. Rec. Reserves (TRR)
1980’s 1% Vertical wells, low rate gel fracs Devonian $1.98 <0.3 tcf1990’s 1.5 to 2% Foam fracs 1st slick water in shale Devonian $1.91
2001 2 to 4% High rate slick water fracs Barnett $4.25
2004 5 to 8% Horizontal well dominant, 2 to 4 fracs Barnett $6.10
2006 8 to 12% Horiz, 6 to 8 fracs, stimul fracs, water recycle trial
Barnett $7.25
2008 12 to 30% 16+ fracs per well, Petrophysics increases
Barnett $9- drop
2010 30% to 40% Technology to flatten decline curve, feeling pinch for frac water
Haynesville $4.20
2011 30% to 45% (very play dep.)
Pad development drains 6000 acres, salt water displacing fresh for fracs
Horn River $4.00
Future project ? Green chemicals, salt water fracs, low disposal volume, reduced truck traffic, pad drilling, electric rigs and pumps
Numerous Depends on market
> 480 tcf
Source: King, SPE 152596
Learning curve increases reflect the ability to invent, adapt and optimize technology to meet the challenges offered in each area.
LEARNING CURVE – APPLICATION OF TECHNOLOGY
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SHALE WELL COSTS
Lateral lengths, when not limited by lease size of shape, may surpass 10,000 ft.
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DECLINE CURVESFour Different Major Gas Shales – from the shallowest to the deepest
Barnett
Fayetteville
Eagle Ford
Haynesville
NORTH AMERICAN SHALE PLAYS
AVERAGE GAS RECOVERIES EUR (Estimated Ultimate Recoveries) will vary by an order of magnitude across a single shale play.
EIA Figures
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SHALE OIL RECOVERIES
Oil recovery from shale is also increasing as technology is improved.
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Macro – Large Picture: Basin View
Maturity, Depth, Recoverable Reserves, “Sweet Spots”
Micro – Small Picture: Shale Fabric
Mineralogy, Natural Fractures, Saturations, Reactions
FIRST – MAP THE SHALE
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SCALE DOWN TO THE BASIN.
Conant and Swanson, 1961
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AREAL VIEW WITH SUBSURFACE EVENTS
What has each of the events created that well completions and stimulation must take into consideration?
Is production different on the high side of a fault from the low side?
17 Source:
THE LITHOLOGY (ROCK SOURCE AND TYPE)
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N => S & W => EAs vertical views are examined, the effect of uplifts demonstrate their effects on shale thickness, formation pinch-outs, depth differences, frac barriers and perhaps some geologic factors.
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FAULT SYSTEMSFaults confuse drilling and may concentrate or release stresses (definitely change them) – this impacts fracture placement and may adversely affect water production.
Deep, extensive faults may act as conduits over time intervals for water influx and gas escape, raising potential for sub-optimum wells.
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“SHALE” MINERALOGY – WIDE VARIANCE
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Many different combinations of mineralogies can still be economic. You must modify the completion and stimulation to make it work,
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ISOREFLECTANCE OR VITRINITE REFLECTANCE: MAP OF BARNETT MATURITY
Approximate Maturity Ranges:
<0.6 - Immature0.6 to 1.1 – Oil generation1.1 to 1.4 – oil to wet gas to drier gas>1.4 mostly dry gas ~ 3 decomposition to CO2 and H2S?
Varies w/ kerogen type & other factors
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Thickness is often “constant” over a region but highly variable in a few specific locations.
Nothing replaces a good geologic model and plenty of mapping.
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DEPTH TO SHALE BASE (BARNETT)Darker shade is the Barnett core.
Yellow shade indicates potential production (best are eastern Parker and most of Johnson Co.’s.
Blue areas are generally poorly productive.
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ONE COMPANY’S EVALUATION OF MARCELLUS ACREAGE
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RIGHT DOWN TO MICROSCOPIC LEVEL - FLOW PASSAGES
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IN GENERAL, PROSPECTIVE SHALES HAVE: Limited clay constituents, usually less than 40%. Static Young’s Modulus in excess of 3.5 x 106 psi. Dynamic to Static Young’s Modulus consistent with
clastic reservoirs, not ductile or high clay content shales.
Are fairly isotropic on the core plug scale (not many/any laminations evident.
Flow gas at effective confining conditions through an un-propped crack at reservoir stresses.
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CANDIDATE SELECTION CHARACTERISTICS
28Source: SPE 133456
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Protecting the Environment – Yes, it is possible. Emission Reductions in Frac flow back and production.
Low pressure gas recovery on flowback and production. Minimize trucking Well construction must be done right to protect air and water.
Alternate water supplies – salt water can be a good frac fluid. Fracturing is the same as conventional fracturing - smallest
chance of pollution of any major energy source enabler. Horizontals give 93% reduction in environmental footprint.
SHALE DEVELOPMENT CHALLENGES - ENVIRONMENT
VERTICAL OR HORIZONTAL WELLS? 9+ SQ. MILE AREA (6000 ACRES)
Horizontal well advantages:• Less land used •Fewer surface penetrations •Agreed on pad placement• Less traffic, dust, & emissions • Less urban & wildlife disturbance,• All wells penetrate the ground in the same area – can be easily monitored•Sharply lower methane vapor loss (using low press capture & compression)
6000 acres: Items Vertical Wells Horizontal Well Pad
Wells (80 acre spacing) 75 12
Roads (miles) 28 2Gas/Oil Pipelines (miles) 30 4Frac Water supply pipeline (miles) 30 2
Facility Pads 8 1
Trucking Miles 45000 36000 (or 1400 w/ pipeline)
Rig Mob/De-Mob 75 1Fresh water monitor area 6000 acres 8 acres (99.9% reduction)
Pad Footprint (acres) 150 6 (96% reduction)Total Development Footprint 566 acres 45 (92% reduction)Total Production Footprint 491 acres 33 (93% reduction)
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Many wells = economic dependency Well costs – Drill, Complete, Frac, Produce
Water Supplies – treating and recycle?, Total water cost Water Storage – how, where, how long, how much Transport – fresh, salty and waste
Proppant supplies – quality and quantity People – Quality over quantity Dry gas value in the market –
Cannot lower cost of operations much, Can we enlarge the market?
SHALE DEVELOPMENT CHALLENGES - ECONOMIC
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All Shale Developments are Technology Driven Optimized sweet spots to select areal and vertical well position Horizontal, Long lateral, multi-fractured well bores Fit for purpose frac fluid (few additives, pumped at high rate), not recipes Optimum production methods that maximize NPV. Low cost drilling Large number of low cost wells needed for shale development. Some technology is transferable – Barnett technology MAY shorten learning
curve, BUT specific technologies are needed for specific shales. Large Differences in the Gas Shales – vertically and aerially Shale gas is disruptive to other energy supplies and suppliers – it can
produce enormous gas reserves, but takes technology, and technology development takes time and money.
OBSERVATIONS
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Kennedy, R.L., Knecht, W.N., Georgi, D.T.: “Comparisons and Contrasts of Shale Gas and Tight Gas Developments, North American Experience and Trends,” SPE 160855, SPE Saudi Arabia Section Technical Symposium and Exhibition, Al-Khobar, Sandi Arabia, 8-11 April 2012.
King, G.E.: “Thirty Years of Gas Shale Fracturing: What have We learned,” SPE 133456, SPE AATCE, Florence, Italy, 23-25 Sept 2010.
King, G.E.: “Hydraulic Fracturing 101:…,” SPE 152596, SPE Hydraulic Fracturing Conference, The Woodlands, TX, USA, 7-8 February 2012.
SHALE REFERENCES