Research Plan for Utica Shale. Albert Yost, Technology Manager, Strategic Center for Natural Gas and Oil, NETL-DOE

Transcription

1 Research Plan for Utica Shale Characterization and Development Albert Yost, Technology Manager, Strategic Center for Natural Gas and Oil, NETL-DOE

2 Outline Utica Shale Geology Current Production and Development Status The Eastern Gas Shales Project: One Model for Resource Characterization Research Plan for Utica Shale 2

3 Upper Ordovician in age Utica Shale Deposition Deposited over a wide area (Ontario, Quebec, MI, NY, PA, OH, WV, and KY) Utica in the Michigan Basin is a source rock for conventional plays in Trenton Lm. and Silurian Reefs Considered a source rock in the Appalachian Basin Thickness typically 200 to 400 feet Depth 4000 to 10,000 feet; deepens from NW to SE 2000 to 6000 feet beneath the Marcellus 3

4 4 Utica Covers Larger Area than Marcellus

5 5 Utica Shale Thickness and Depth

6 General X-Section: Marcellus and Utica Figures from Geology.com and based on Ryder, R., USGS Open-File Report

7 Geologic Column 7 Source: Wickstrom, 1992

8 Recent Utica Shale Related Studies USGS OFR by Robert Ryder Assessment of Appalachian Basin Oil and Gas Resources: Utica-Lower Paleozoic Total Petroleum Systems USGS OFR by Elisabeth Rowan Burial and Thermal History of the Central Appalachian Basin, Based on three 2-D models of Ohio, Pennsylvania and West Virginia U.S. DOE Trenton-Black River (Limestone) Playbook (CD) 2006 (Trenton-Black River Formation is below the Utica) 8

9 Thermal Maturation Status Utica, Point Pleasant and Logana Equivalent Shales Source: Trenton-Black River Playbook, USDOE

10 10

11 Ohio Area of Interest Utica/Point Pleasant Sub-Basin Source: Trenton-Black River Playbook, USDOE

12 X-Sections of Utica/Point Pleasant Sub-Basin Rowan, USGS OFR

13 Cross Section D D Rowan, USGS OFR

14 Trenton-Black River Study DVD Appropriated Funds Natural Gas R&D only Does not include Sec. 999 Funds (post-2006) Download report at Order DVD at Contact for DVD ordering assistance: 14

15 Current Ohio Utica Production 22 Vertical Wells Producing from Utica Shale as of April 2011 Source: Ohio Dept of Natural Resources, Division of Geological Survey, updated quarterly 15

16 Companies Pursuing Leasing and Drilling Chesapeake: 1,200k ac Chevron - Atlas Energy ConocoPhillips Consol Energy (CNX) Encana Equitable Resources ExxonMobil - XTO Forest Oil: 270k ac Gastem: 29k ac Greencaste Resources Hess Questerre Energy: 719k ac Range Resources Rex Energy Shell East Resources Talisman: a 720k ac Dozens More 16

17 Recent Utica Shale Activity in Ohio as of May 28, 2011 Belmont Co. CONSOL s Barnesville 1, vertical well unstimulated produced 1.5 MMcf/d on short test CONSOL plans 6 additional Utica tests in 2011 in PA and OH Carroll Co. Five horizontal wells drilled none fractured Vertical portions drilled on four additional waiting on rig to drill horizontal Additional permits for drilling issued Columbiana Co. Drilling permits issued Harrison Co. Ten Utica Shale wells have been drilled, with one of those a horizontal Statewide: 14 companies with drilling permits for the Utica Statewide: 22 vertical permits, 9 vertical wells drilled, 9 horizontal permits and 5 horizontal drilled d wells 17

18 Comparison of Marcellus/Utica Activity in OH as of May 28, 2011 Marcellus Shale * Utica Shale * Vertical Permits Issued: 68 Vertical Wells Drilled: 44 Horizontal Permits: 11 Horizontal Wells Drilled: 5 Vertical Permits Issued: 22 Vertical Wells Drilled: 9 Horizontal Permits: 9 Horizontal Wells Drilled: 5 * Permits issued since December, 2009 Source : ODNR Division of Mineral Resources Mgmt. 18

19 Current PA Utica Activity Source: REX Presentation to Investors June

20 Eastern Gas Shales Project A multidisciplinary research effort directed towards increasing natural gas production from the Devonian shales of the Appalachian, Illinois, and Michigan Basins. The objectives of the EGSP were to: Develop technologies for effectively locating and producing natural gas from Devonian shales, Reduce the uncertainty surrounding the potential magnitude of reserves to encourage resource development, Devonian shale outcrop Genesee Gorge, NY Develop accurate estimates of gas-in-place and economically recoverable resource, Develop rationales for identifying exploration prospects, and Develop and enhance cost-effective extraction methods. 20

21 Eastern Devonian Shale Unknowns in 1976 Magnitude of the potential resource Stratigraphic and structural framework Geochemistry and degree of thermal maturity needed to support the presence of gas Examples of cores, logs and maps of the shale depositional environment and tectonic activity Devonian shale outcrop Genesee Gorge, NY Practicality of fracturing as a recovery enhancement method and comparative analysis of alternative stimulation methods (e.g., foam fracturing, massive hydraulic fracturing, chemical explosives, propellants, or high density explosives) Potential benefits of drilling wells horizontally 21

22 Natural Gas R&D at NETL Appropriated Funds Natural Gas R&D only Does not include Sec. 999 Funds (post-2006) $ (million ns) Eastern Gas Shales Western Tight sands Coalbed Methane Hydrates Environmental Protection Process Technologies Transition Year E & P Gas Infrastructure 22

23 DOE Eastern Gas Shales Program Schematic Program Feasibility Study I. Base Program Geologic Engineering Existence/origin of gas Resource/Reservoir Gas distribution Research Areal extent Trap mechanisms Productive interval & potential Mechanical rock properties Understanding the Resource Developing the Reserves Field Data Potential Reserve Support Technology Field Verification II. Advanced Program Option III. Ultimate Program Option Modeling, Diagnostics & Data Base Devel. Geologic Reservoir Stimulation Production Potential/Mechanisms Source Reservoir Trap Delineation Occurrence/distrib. Storage mech. Release mech. Trap mech. Fracture network Anisotropy Interconnectedness Strata distribution Structure / stress relationship Predictive Capability and Reservoir Performance Understanding Validation Tests with Field Diagnostics Application Extraction Methods and Spacing Requirements in Geologically Favorable Areas Production Tests for Verification of Potential Reserve Possible Probable Proven 23

24 Eastern Gas Shales Project Core Sites Devonian shale outcrop Genesee Gorge, NY 24

25 Devonian Shale Partitioning Geologic partitions based on stress data and joint boundaries. Joint data from oriented core fractographic analysis and stress measurements e e from various sources. 25

26 EGSP R&D Technologies Subsequently Commercialized Foam fracture technology Application of oriented coring and fractographic analysis to shale Air-drilled directional and horizontal wells with multiple hydraulic fracture treatments Carbon dioxide fracturing applied (commercialized in Canada) Electromagnetic MWD Fracture diagnostics and imaging (fracture mapping) Steerable air percussion drilling system 26

27 Knowledge Products Used by Industry Basic data gained from analyses on 28,000 feet of oriented core from more than 38 wells. More than 120 detailed d maps and x-sections Analytical products from stimulation research carried out on 50+ wells, including 8 high angle and 4 horizontal tests, and 2 closelyspaced offset transient well tests to quantify permeability anisotropy in OH and KY Maps of stress orientations and stress ratios for use in identifying areas of greatest gas production potential The first publically ll available estimates t of technically recoverable gas for gas shales in WV, OH, and KY, with plans for locating, drilling and completing wells. 27

28 Basic geology Utica Shale Play Knowns Unknowns Rough extent of play area Preliminary understanding of TOC, Ro, maturity, brittleness, mineralogy (on a rough scale) Limited productivity data from vertical wells in selected areas Limited core and log data (most available core not from the area currently being leased in OH) Marcellus extraction method (horizontal wells with multiple hydraulic fracturing treatments) likely to be applicable to the Utica Results of horizontal tests expected soon Productive area of play Geographic variation in liquid content across the play Relationship between well and fracture treatment spacing and productivity (same as Marcellus?) Relationship between horizontal lateral length and productivity (same as Marcellus?) Importance of natural fractures (frequency and direction) to well productivity Recovery factor and producing mechanism Detailed reservoir characterization and geochemistry Optimum field development strategy 28

29 Utica Shale Research Program Strawman Industry workshop to establish highest priority research needs, with DOE plan provided for review Develop stakeholder support for funding Develop strategic plan Develop implementation ti plan Prepare research solicitations based on implementation plan Maximize impact of joint govt.-industry partnerships employing wells of opportunity to piggyback research with planned drilling Widely publicize research results 29

30 Drivers Affecting Research Strategy and Implementation What is the fundamental nature of the producing mechanism (e.g., matrix vs. fractures, desorption rate, liquids vs. gas)? What is the analogue (Bakken, Marcellus, Eagle Ford)? What is the level of interest for government/industry partnerships and availability of wells of opportunity? What is the possibility of partnering with operators drilling Class II injection wells below the Utica? What level of federal funding is possible and what level of stakeholder support will be required to get it? What is the potential for joint development of Marcellus and Utica in selected areas? 30

31 Observations Lessons learned in PA and WV Marcellus as well as tools developed in other shale plays will likely benefit operators in Ohio s Utica play. The hot spot for the Utica will likely be central to eastern Ohio (gas plus NGLs at depths similar to Marcellus could bring a premium), and the WV panhandle a and western PA (dry gas). Collaborative research between industry and the federal government helped to catalyze technology development in the Appalachian Basin during the 1970s-1990s, 1990s leading to accelerated supply of domestic natural gas. A similar research program in 2012 and beyond could shed light on Utica Shale unknowns and support optimal development practices, enhancing ultimate recovery of the resource. 31