Transcript Apache Corporation

APACHE CORPORATION
EXPERIENCES IN
SHALE GAS
EXPLORATION IN THE
USA
George E. King
9 August 2012
TOP 20 NORTH AMERICAN SHALE PLAYS: SOME
SIMILARITIES & MANY DIFFERENCES
 Gas Examples
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Liquids Rich Examples
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2
Marcellus, Barnett,
Haynesville, Horn River,
Fayetteville,
Woodford, Montney
Bakken, Eagle Ford, Monterey,
Bone Springs, Avalon,
Utica?
Barnett Oil Window
3
TECHNICALLY RECOVERABLE SHALE GAS
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.
4
Kennedy, SPE 160855
(Gas in
place!)
5
Worldwide Unconventional GIP Resources, from Kuuskra (EIA – 2011) – Kennedy SPE 160855
Year
6
Technologies Applied
1980’s
1990’s
2001
2004
2006
% OGIP
Recovery
(OGIP = original
gas in place)
1%
1.5 to 2%
2 to 4%
5 to 8%
8 to 12%
2008
12 to 30%
Barnett
$9- drop
2010
30% to 40%
16+ fracs per well, Petrophysics
increases
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
Source: King, SPE 152596
Vertical wells, low rate gel fracs
Foam fracs 1st slick water in shale
High rate slick water fracs
Horizontal well dominant, 2 to 4 fracs
Horiz, 6 to 8 fracs, stimul fracs, water
recycle trial
Shale in
Average Shale Gas
Development gas price Tech. Rec.
$/mmbtu Reserves
(TRR)
Devonian
$1.98
<0.3 tcf
Devonian
$1.91
Barnett
$4.25
Barnett
$6.10
Barnett
$7.25
> 480 tcf
LEARNING CURVE – APPLICATION OF TECHNOLOGY
Learning curve increases reflect the
ability to invent, adapt and
optimize technology to meet the
challenges offered in each area.
SHALE WELL COSTS
Lateral lengths, when not limited by lease size of shape, may surpass 10,000 ft.
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DECLINE CURVES
Four Different Major Gas
Shales – from the shallowest
to the deepest
Haynesville
Barnett
Eagle Ford
Fayetteville
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NORTH AMERICAN SHALE PLAYS
AVERAGE GAS RECOVERIES
EIA Figures
EUR (Estimated Ultimate
Recoveries) will vary by an order
of magnitude across a single
shale play.
SHALE OIL RECOVERIES
Oil recovery
from shale is
also increasing
as technology
is improved.
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FIRST – MAP THE SHALE

Macro – Large Picture:

Basin View


Micro – Small Picture:

Shale Fabric

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Maturity, Depth, Recoverable Reserves, “Sweet Spots”
Mineralogy, Natural Fractures, Saturations, Reactions
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?
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THE LITHOLOGY (ROCK SOURCE AND TYPE)
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Source:
As 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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N => S & W => E
FAULT SYSTEMS
Faults 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
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 - Immature
0.6 to 1.1 – Oil generation
1.1 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:
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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
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Source: SPE 133456
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SHALE DEVELOPMENT CHALLENGES - ENVIRONMENT

Protecting the Environment – Yes, it is possible.

Emission Reductions in Frac flow back and production.
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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.
VERTICAL OR HORIZONTAL WELLS?
9+ SQ. MILE AREA (6000 ACRES)
6000 acres: Items
Vertical
Wells
Horizontal Well Pad
Wells (80 acre spacing)
75
12
Roads (miles)
28
2
Gas/Oil Pipelines (miles)
30
4
Frac Water supply pipeline (miles)
30
2
Facility Pads
8
1
45000
36000 (or 1400 w/ pipeline)
75
1
Fresh 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)
Trucking Miles
Rig Mob/De-Mob
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)
SHALE DEVELOPMENT CHALLENGES - ECONOMIC
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Many wells = economic dependency
Well costs – Drill, Complete, Frac, Produce
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Water Supplies – treating and recycle?,
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Proppant supplies – quality and quantity
People – Quality over quantity
Dry gas value in the market –
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Total water cost
Water Storage – how, where, how long, how much
Transport – fresh, salty and waste
Cannot lower cost of operations much,
Can we enlarge the market?
OBSERVATIONS

All Shale Developments are Technology Driven
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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.
SHALE REFERENCES
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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.