Gas and Oil Producing Shale and Nonconventional Oil Opportunity with Knowledge and Technology

r. marc bustin

DEFINITION OF UNCONVENTIONAL RESOURCES

hydrocarbon distribution controlled not necessarily by buoyancy no obvious reservoir seal
Low Matrix Permeabilities (<0.1 md) or high viscosity fluids Adsorption Mechanisms and diffusion maybe important Pressures maybe abnormal

economic recovery require non-standard exploration and operating practices

Geomechanics and geochemistry disproportionally important in delineating sweet spots Wellbore and Completion Designs Well and Formation Testing Procedures Development Strategies

UNCONVENTIONAL GAS AND RESOURCE PLAYS

TIGHT GAS SANDS Continuous Deposition Low Permeability Both Traditional and Basin-Center Settings
COALBED METHANE Self-Sourcing Reservoir Gas Adsorbed in Coal Requires Depressuring and Usually Dewatering

RESOURCE PLAYS
GAS and Oil Prod. SHALES Self-Sourcing Plus Traditional Porosity Reservoirs Gas Adsorbed in Organic Matter Requires Pervasive Natural Fract. Network or K pathways

METHANE HYDRATES

Kuuskraa, 2006

UNCONVENTIONAL GAS AND RESOURCE PLAYS

TIGHT GAS SANDS Continuous Deposition Low Permeability Both Traditional and Basin-Center Settings
COALBED METHANE Self-Sourcing Reservoir Gas Adsorbed in Coal Requires Depressuring and Usually Dewatering

RESOURCE PLAYS
GAS and Oil Prod. SHALES Self-Sourcing Plus Traditional Porosity Reservoirs opportunity Gas Adsorbed in Organic Matter Requires Pervasive Natural Fract. Network or K pathways

METHANE HYDRATES

Kuuskraa, 2006

Conventional Oil in Unconventional Rocks UNCONVENTIONAL OIL PLAYS Unconventional Oil in Conventional Rocks

unconventional reservoir rock

conventional reservoir rock

modified form Russum, 2010

opportunity

opportunity

opportunity

Russum, 2010

opportunity - understanding and

evaluating rock systems and application of appropriate technologies can result in commercial exploitation of hydrocarbon resources previously considered sub economic

assess to opportunity- network of

contacts and companies who want to do business and savvy to make it work

East-West Competitive Advantage

experienced technical professionals access to ideas, technology and innovation strong committed board of directors business savvy strong and very very aggressive financial support access to opportunity- strong land position and access to much more

GAS SHALES- source rocks with retained HCs Oil & Gas Shales- source rocks with retainedHCs
Burial of Organic Rocks
Cap Rock

Kerogen
Biogenic Gas

Source Rock Reservoir Rock Gas Oil Gas and Oil

Thermogenic Gas and Oil

Wet Gas

Dry Gas

background

Oil & Gas Shales- source rocks with retained HCs GAS SHALES- source rocks with retained HCs
Burial of Organic Rocks
Cap Rock

Antrim

Green River

Kerogen
Biogenic Gas

Source Rock Reservoir Rock Gas Oil Gas and Oil

Eagleford

Thermogenic Gas and Oil

Wet Gas

Haynesv.
Dry Gas

background

Conventional Oil in Unconventional Rocks Unconventional Oil in Conventional Rocks

Conventional Oil in Unconventional Rocks Unconventional Oil in Conventional Rocks

reservoir access

heavy oil

tight rock

GAS SHALES- source rocks with retained HCs Oil & Gas Shales- source rocks with retainedHCs
Burial of Organic Rocks
Cap Rock

Antrim

0.38 nm Kerogen
Biogenic Gas

Source Rock Reservoir Rock Gas Oil Gas and Oil

Eagleford

Thermogenic Gas and Oil

Wet Gas

Haynesv.
Dry Gas

background

Complexities and Predictions

ANTRIM SHALE OHIO SHALE LEWIS SHALE

facies controlled permeability fracture or fraced controlled permeability

haynesville

barnett fayetville woodford ohio montney eagle ford

lewis

background

Definition: Gas/Oil Shale

Shale gas/oil is defined as a fine grained reservoir in which gas/oil is self sourced and some of the gas is stored in the sorbed state Sorbed gas is predominately stored in the organic fraction so organics present Not just shale
limestone ie. Eagle Ford, Muskwa dolomite ie. Montney chert ie Woodford mudstone ie.Marcellus, Muskwa siltstone/vfg sandsone ie. Lewis shale ie. Anrtrim

Bustin, 2005, AAPG

Clay <2 um Silt <62.6>2 um

Background

Classify Petroleum Systems as Conventional

USGS 2003

or Continuous

USGS 2003

Characteristics of Continuous Accumulations

Regional in extent Diffuse boundaries Low matrix permeabilities No obvious seals or traps No hydrocarbon/water contacts Close to or are source rocks with non expelled hydrocarbons Low recovery factors Includes tight sandstones, coalbed gas, oil and gas in shale and chalk

NATURAL GAS PYRAMID

technology
High Quality
1000 md 100 md

price

Medium Quality
1 md Tight Gas Sands CBM Gas Shale

Low Quality

Produced Reserves
Undiscovered Resources

Low Btu

Gas Hydrates / Other

0.00001 md

New Fields CBM

Tight Gas Gas Shales Low Btu

Emerging / Future Resources

Sub-Volcanic New Gas Shale New Tight Gas

Deep CBM Basin-Center

Gas Hydrates / Other

Eagle Ford Shale Wet Barnett Wet Marcellus Duvernay

0.5 mm

Implications of the New Gas Shale World

What are the World Gas Shale Resources and Reserves?

estimates based on source rock studies with assumptions about how much gas retained in source rocks -Rogner 1997 estimate Resource Endowment at 16,119 TCF -US NPC estimates total unconventional at about 32 000 TCF -IEA World Energy Endowment assumes 40% of endowment is recoverable 6350 TCF -so we are pretty much making intelligent guesses.....

Estimates of World Wide Distribution of Unconventional Gas Resources

Region
North America Latin America Western Europe Central and East Europe Former Soviet Union Mid East & North Africa Sub-Saharan Africa

Coalbed Methane (TCF)

3017 39 157 118 3957 0 39

Shale Gas (TCF)

3842 2117 510 39 627 2548 274 3528 2313 314 0 16112

Tight Gas (TCF)

1371 1293 353 78 901 823 784 353 705 549 196 7406

Total (TCF)
8228 3448 1019 235 5485 3370 1097 5094 3487 862 235 32560

Centrally planned Asia 1215 and China Pacific (OECD) Other Asia Pacific South Asia World 471 0 39 9051

US NPC SPE 68755 Source: "Tight Gas Sands", Journal of Petroleum Technology, June 2006, Page 86-93. Table 1 - Distribution of Worldwide Unconventional-gas resources (After Rogner 1996, Taken from Kawata and Fujita 2001)

North American Gas Production Forcast

EnCana, 2010, IP

Producing Shale Plays

Horn River
100-150 Bcf/sect.

Duvernay Montney
100 Bcf/sect. ? Bcf/sect. ? Oil

Utica
45 Bcf/sect.

green denotes liquids production

Ohio
5-10Bcf/sect.

Antrim
6-15 Bcf/sect.

New Albany
7-10Bcf/sect.

Marcellus
45 Bcf/sect.

Lewis
40 Bcf/sect.

Woodford
100 Bcf/sect.

Fayetteville
25-65 Bcf/sect.

Barnett
140-160 Bcf/sect.

Haynesville
150-200 Bcf/sect.

Eagle Ford
50-150 Bcf/sect.

based map modified from EnCana IP. 2009

Projected Gas Supply TransCanada Pipeline

TransCanada Pipeline (June 2010, Investor Presentation)

EnCana Investor Presentation, 2010

Trend to fewer wells with longer lateral lengths with more frac stages

Range Resources, April 2010

the learning curve continues to flatten

Southwest Energy, March 2010

The costs of shale gas

Source: Chesapeake Energy: January 2010 Investor Presentation

Source: Vello Kuuskraa, President of ARI Inc, in presentation to the Copenhagen summit, 12 December 2009

Horsfield and Schulz, 2010 AAPG

unconventional opportunities exist where ever Conventional conventional production exists Gas Distribution and many other areas

Source: Oil and Gas Journal

Geological Characteristics Common to Producing Gas and Oil Producing Shales

Organic rich Marine to transitional marine Interbedded source and seal Comparatively thick Permeability enhanced by fracturing or interbedded facies with higher perm.

What gas/oil shale properties are important?

gas/liquid composition gas and liquid capacity and contentsorbed and free gas

permeability- fracture or facies controlled thickness lateral extent ease of completion, reservoir access

gas and oil producing shales

producing shales range from organic rich, fine grained rocks such as the Antrim or Ohio Shale to variable facies rocks such as the Lewis Shale

Background

SOME EXAMPLES

Antrim

New Albany

Lewis

Barnett

Ohio

Background

Outcrop

Shales are heterogeneous rocks

Hand Spec.

Light SEM

FESEM
200 000 nm

TEM
50 000 nm 200 nm

Background

Pressure and Temperature Space of Producing Shales

4500

Haynesville
Barnett

Muskwa

Pressure (PSIA)

3000

Utica Marcellus
1500 Ohio

Woodford Caney Fayetteville Eagle Ford

Lewis

Antrim
0 0
20 40

New Albany
60 80 140

Temperature C
Background

Maturity and Organic Matter Content

2.0

Haynesville

THERMOGENIC GAS
Woodford Caney Fayetteville

Lewis
1.6

Muskwa

Rom (%) ax

1.2

Barnett
Ohio
Eagle Ford Utica Marcellus

0.8

New Albany

OIL WINDOW

0.4

Antrim

BIOGENIC GAS
00 4 8 12 16 20 24

TOC (%)
Background

Complexities and Predictions

ANTRIM SHALE OHIO SHALE LEWIS SHALE

fracture or fraced controlled permeability Buckinghorse Shaftsbury

Muskwa/Otter Park/Evie

facies controlled permeability

Montney

Nordegg

Complexities and Predictions

ANTRIM SHALE OHIO SHALE LEWIS SHALE

True Shale/Porcellanite

Tight SS

What We Know!
rocks referred to as gas/oil shales range from true shales to tight sands individual formations, members or units within a shale unit may be extremely heterogeneous in mineralogy and fabric and hence pore system and flow characteristics

Gas/Oil Shale Model

Mapping TOC Wireline logs Geochemistry Adsorbed Gas TOC

Shale Area Thickness Maturity Gas Capacities Solution Gas

Moisture

Temperature

Free Gas

Pressure

Producibility
Permeability

Al2O3 fraction

Sedimentology

Porosity Fracturing So, Sg, Sw,

Diagenesis

Coarser horizons

Silica contents

thickness

TOC Porosity

fabrics/ fractures

permeability diffusivity
effective stress

gas in place

Reservoir exploration and development

gas in place

deliverability

thickness

TOC Porosity

fabrics/ fractures permeability diffusivity effective stress

gas in place

Reservoir exploration and development

gas in place

deliverability
Outline

Factors Governing OOIP & GIP in Shale

Total Gas = Free Gas + Adsorbed Gas+ Solution Gas

Free Gas in Pores and Fractures

Adsorbed Gas

Solution Gas

Area Thickness Pressure Temperature Porosity Gas Saturation

Area Thickness Pressure Temperature Total Organic Content Maturity

Area Thickness Pressure Temperature Total Bitumen/ Liptinite content Maturity

BACKGROUND

Isopach Net and Gross Pay Frac barriers Structure Map Vertical Depth Temperature Gradient Pore pressure Gradient Bulk density

OGIP Workflow
log based sample based
Adsorbed Gas

Interpolation adsorbed gas through pay interval via calibrated logs Interpolation free gas + HC liquids in net pay via calibrated logs Interpolation of solution gas through pay interval via calibrated logs

Calibration well logs to TOC

Adsorption Isotherms on samples of varying TOC

Measurement TOC on representative samples Measurement total porosity, Sw, So representative samples

Free Gas + Liquids

Calibration porosity, Sw and So to well logs

Measurement of pore compressibility

Solutio n Gas Gas Compositio n

Calibration porosity, Sw and So to well logs

Measurement or calculation gas solubility reservoir P & T & salinity

Measurement total mobile water

Gas Chromatography isotopic analyses

Canister Desorption gas sampling f(t)

TOTAL OGIP = adsorbed + free + solution gas + liquid HCs Accessible OGIP = Total OGIP/m3

Stimulated Reservoir Volume

Applying Type Curves

type curves are decline curves that are anticipated to (or do) reflect the production profile of a well with a particular completion (ie lateral length, number of stages etc.) and represents the P50 case at exploratory stage type curves of what are considered to be analogous reservoir are used with early production IPs are manipulated and later b typically operational changes and more stages result in higher IPs with typcally similar curve shapes
number of stages

EnCana, 2009 IP

thickness

TOC Porosity

fabrics/ fractures

permeability diffusion

gas in place
Reservoir exploration and development

effective stress

gas in place

deliverability

Geomechanics- Rock Mechanics

whether a rock is currently fractured and its ability to be fractured are dependent on mechanical properties which vary with mineralogy, fabric and diagenesis and hence stratigraphy

the future is mechanical stratigraphy

goal is to develop a geomechanical model of the potential reservoir to assist in drilling, completions, and development

required for: predicting orientation of frac (SRV) density, width and orientation of natural fractures optimal direction for horizontal wells for stability and for intersecting fractures that are open borehole stability change in reservoir permeability during production

requires knowledge of: in situ stress orientation and magnitude pore pressure pre existing rock fabric and moduli thermal and chemical state of reservoir and fluid system

 appears most thermogenic gas and oil shales have FEW preexisting fractures or those that exist are healed object then is to shatter the rock during fracing to increase the surface area available for drainage maximize the stimulated reservoir volume not to connect to a pre-existing fracture network many shales do not have a pre-existing k network

0 0

0 0

 appears most thermogenic gas shales have FEW pre-existing fractures or those that exist are healed object then is to shatter the rock during fracing to increase the surface area available for drainage maximize the stimulated reservoir volume not to connect to a pre-existing fracture network many shales do not have a pre-existing k network

0 0

0 0

Strong correlation between SRV and production (excellent correlation between number of stages at IP)SRV function of completion
Hmin>>Hmax Hmin=Hmax

Mayerhofer et al SPE 102103

Stimulated Rock Volume (SRV) and shape of SRV is a function of the in situ stress field, mechanical properties of the rocks and frac design and execution

completion function of in situ stress, rock properties and design and implementation of frac

100

Friction Angle = 44.19 Linear Cohesion = 7 MPa

Shera Stress , t , MPa

80

60

40

SRV estimated from microseismic

20

0 0 20 40 60 80 100 120 140 160 Effective Normal Stress (Residual), s , MPa Mohr's circle at 14 MPa Mohr's circle 31 MPa Coulomb failure Envelope

a farming operation- you don't frac it you don't get the gas

http://www.ashdown.org.uk/spps/images/Carol_Talbot/BA2008_CarTal_Tractor%20ploughing%20field.j pg

high density horizontal well pad designed to harvest gas

Geomechanics and Permeability/Diffusion Rate

Darcy Flow
Coals- fracture (cleat) spacing is so low that matrix perm/diffusion is not considered rate limiting Shales- fracture spacing is commonly >5 cm and matrix perm/diffusion may be rate limiting

Matrix Block

Diffusion/ Mass Flow

Permeability/Diffusion
Desorption

reservoir perm requires well tests matrix perm/diff can be measured in lab

Diffusion/ Advection

5 nm

controlling variables
fracture fabric

fracture permeability fracture spacing

effective stress rock mechanics

induced during fracs existing fabric depth far field stress moduli fabric mineralogy

matrix permeability/ diffusion

mineralog y fabri c effective stress rock mechanics gas composition

pressure/temperature/fluid properties

deliverability

Integrated Optimization Process

Quirk, 2010

Integration Optimization Process

1. It helps answer the questionsHow many fracs do I need in my horizontal wellbore? How big should my fracs be? 2. It integrates many types of data into one reservoir package, maximizing value for your information. 3. It provides a way to model fractures in the complex fracturing we find in shale gas reservoirs (i.e. Horn River/Barnett).
The process can be used in any reservoir.
Quirk, 2010

Information that Collecting a Microseismic Dataset Provides

Fracture Azimuth Fracture Length Fracture Height Fracture Complexity Calculation of Stimulated Reservoir Volume Evaluation of the effectiveness of the completion system Calibrated Fracture Modeling and Integration of Microseismic into a Reservoir Simulator
Quirk, 2010

Trican fracing shale well in north eastern British Columbia

Horn River Basin

11 mapped slickwater stages Generally complex fracturing Long fracture half lengths NE-SW fracture azimuth Stimulated Reservoir Volume (SRV) is crucial to production
Portions of the horizontal are under-stimulated

Horn River Basin from http://www.apachecorp.com/Resources/Upload/PrevArticleFiles/files/ Apache_2008_Analyst_Review_08_Canada.pdf

Apache Website

Conclusions
Low permeability reservoirs require large SRVs with small fracture spacing and adequate frac conductivity Important to understand parameters in the reservoir that will create complexity so fracture spacing in the SRV can be understood Engineering measures to increase SRV and frac spacing
Length and orientation of horizontal well Treatment size Number of stages, number of perf clusters More stages and clusters in a cased/cemented completion increased likelihood of dense fracturing Zipper fracs, Simul-fracs

developing a strategy, ranking prospects.....where do you start?

vast resources of gas in tight rock either sorbed or free state how do you explore? screens:

1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13.

thickness lateral extent toc maturity mineralogy reservoir accessibility rock mechanics frac barriers fluid sensitivity reservoir pressure cost Poissons Ratio Mud logs./shows

need to know at start if there is enough gas in place to warrant the cost of exploring and completion what is the size of the prize)

development risk max. SRV; optimization of drilling and completions

Gas Shale Target Parameters

Attributes Lithology Thickness Current TOC Effective Porosity to Gas Young Modulus Poisson's Ratio Clay Content Pressure Gradient Mud Log Gas Desired fine grained, will indurated > 40 m >1% (min. not known) >2.5% > 4 mmpsia <0.25 <30% (no water sensitive clay) >.5 psi/foot relative but evidence of gas

Matrix porosity
Depth\Diagenesis

Matrix Perm.

Maturity

In Situ Pressure E Stress

Rock Mechanics

PROSPECT WINDOW

summary

Matrix porosity
Depth\Diagenesis

Matrix Perm.

Total Gas

Rock Mechanics/Fractures

PROSPECT WINDOW

optimum zone trade off between many variables and will be shale specific

summary