Unconventional Natural Gas Development
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Transcript Unconventional Natural Gas Development
Robert Fisher, PG
April 16, 2013
Discussion Topics
Unconventional Gas
Barnett Shale/Economics
Example Plays
How Fracking Works
Production of Natural Gas
Issues and Concerns
What is “Unconventional Gas”?
Definition: Natural gas reserves that are more difficult or
less economical to extract than conventional reserves
Types today
Deep Natural Gas (>15,000 feet deep)
Shale Gas (and associated condensate/crude)
Tight Gas
Coal Bed Methane
Methane Hydrates
Why is Unconventional Gas
Development so important?
US & global reserves are huge
Energy will come largely from fossil fuels for the rest of our lifetimes
Depressed natural gas prices ($3/Mcf) are currently boosting the economy.
US Unconventional Shale Gas Development
750+ trillion cf of gas
Annual US demand = 23 tcf
20+ billion boe (crude)
Annual US demand = 7.3 bboe
46% of US gas by 2035
20 known shale plays in US
Marcellus
Bakken
Barnett
Eagle Ford
Unique Features of Unconventional Oil & Gas
Development
Uses new techniques (including horizontal drilling) to access
oil & gas reserves in “tight” formations
Requires a significant volume of water for hydraulic
fracturing during well development to release the oil and/or
gas
Requires treatment of returned frac water prior to reuse or
disposal (similar to produced water)
Often occurs in areas that never experienced oil & gas
development in the past, leading to new challenges
Barnett Shale
First Barnett well drilled in 1981
Mitchell Energy pioneered development techniques in Barnett
Major development began in 2003 with horizontal drilling combined with
hydraulic fracturing
Numerous wells in urban areas of DFW Metroplex including DFW Airport
Barnett Shale
Production from Barnett Shale in 13 North Texas Counties
Current drilling activity is about 1/3 of the peak rig count in 2008
(approximately 50 active rigs)
Barnett Shale
Statistics
Average reserves: ~25 Mcf/acre
Average lifetime of each well: 7.5 years (some lasting 15 years)
Drilling depths: up to 6,000 feet
Horizontal drilling lengths: 1 to 2 miles
Completion costs: $2MM to $3MM per well
Well yields: 1 to 2Mcf/day (highest recorded yield – 17Mcf/day over 30 day
period)
Average lifetime well yield: 0.84Bcf
Opportunity for Mineral Rights Holders
Sign-on bonuses and royalty payments
$2,500 to $3,000 per acre, with possibilities up to $5000 to $7000/acre
(Note: historic highs were $25,000/acre in 2007 or so)
Royalty rates are 20 to 25%
Access to off-property gas development
Develop your own gas resources
DFW Example
Hydraulic Fracturing
“Fracking” - Hydraulic fracturing of a subsurface geologic unit by high-
pressure water, proppant (sand), and chemicals to improve
permeability in the shale, tight sand, or other formation that hold gas
or oil
Hydraulic Fracturing
Fracking has been used in
oil and gas wells since the
1940s
Fracking combined with
horizontal drilling began in
the 1980s
Hydraulic Fracturing
•Typically deep: 4,000 to 9,000
feet.
•Usually well below production
aquifers.
Fracking Fluid Composition
Chemical Additives, 0.5%
Dilute acids
Sand,
9.5%
Sodium chloride
Polyacrylamide
Ethylene glycol
Borate salts
Sodium/potassiu
Water,
90%
m carbonate
Glutaraldehyde
Guar gum
Citric acid
Isopropanol
Why Fracking Fluids Contain these Chemical Additives
Hydraulic Fracturing Layout
Hydraulic Fracturing
Production of Unconventional Gas
Nearly identical to production of
conventional gas once fracking is
completed
• Primary difference is fracking
fluid flowback early in well’s life
with unconventional gas
Same for either gas type:
Well Heads
Separators
Condensate Tanks
Produced Water tanks
Compressors
Gas Metering
Gathering Lines
Main Issues of Concern
Special Challenges
Air permitting/impacts
Nuisance concerns (light,
noise, dust, etc.)
Water withdrawal
Groundwater protection
Water disposal
Waste disposal
Pipelines, compressor
stations & storage
Habitat and endangered
species protection
Daily
people/equipment/truck
ingress/egress
The Future
• 750+ trillion cubic
feet (tcf)
• 23 tcf annual US
demand
• 46% of US gas
production by 2035
• 20 known shale
plays in the US
- Marcellus
- Bakken
- Barnett
- Eagle Ford