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
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
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
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
 Fracking combined with
horizontal drilling began in
the 1980s
Hydraulic Fracturing
•Typically deep: 4,000 to 9,000
•Usually well below production
Fracking Fluid Composition
Chemical Additives, 0.5%
 Dilute acids
 Sodium chloride
 Polyacrylamide
 Ethylene glycol
 Borate salts
 Sodium/potassiu
m carbonate
Guar gum
Citric acid
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
• 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
The Future
• 750+ trillion cubic
feet (tcf)
• 23 tcf annual US
• 46% of US gas
production by 2035
• 20 known shale
plays in the US
- Marcellus
- Bakken
- Barnett
- Eagle Ford