Research Plan for Utica Shale Characterization and Development Albert Yost, Technology Manager, Strategic Center for Natural Gas and Oil, NETL-DOE
Outline • Utica Shale Geology • Current Production and Development Status • The Eastern Gas Shales Project: One Model for Resource Characterization • Research Plan for Utica Shale
Utica Shale Deposition Upper Ordovician in age 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
General X-Section: Marcellus and Utica Figures from Geology.com and based on Ryder, R. , USGS Open-File Report 2008–1287
Geologic Column Source: Wickstrom, 1992
Recent Utica Shale Related Studies • USGS OFR 2008-1287 by Robert Ryder “Assessment of Appalachian Basin Oil and Gas Resources: Utica-Lower Paleozoic Total Petroleum Systems” • USGS OFR 2006-1019 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)
Thermal Maturation StatusUtica, Point Pleasant and Logana Equivalent Shales Source: Trenton-Black River Playbook, USDOE 2006
Ohio Area of Interest Utica/Point Pleasant Sub-Basin Source: Trenton-Black River Playbook, USDOE 2006
X-Sections of Utica/Point Pleasant Sub-Basin Rowan , USGS OFR 2006-1019
Cross Section D – D’ Rowan , USGS OFR 2006-1019
Trenton-Black River Study DVD Appropriated Funds Natural Gas R&D only Does not include Sec. 999 Funds (post-2006) Download report at http://www.netl.doe.gov/kmd/cds/Order DVD at http://www.netl.doe.gov/publications/cdordering.htmlContact for DVD ordering assistance: JoAnn.Yuill@smc.netl.doe.gov
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
Companies Pursuing Leasing and Drilling • Greencaste Resources • Hess • Questerre Energy: 719k ac • Range Resources • Rex Energy • Shell – East Resources • Talisman: 720k ac • Dozens More • Chesapeake: 1,200k ac • Chevron - Atlas Energy • ConocoPhillips • Consol Energy (CNX) • Encana • Equitable Resources • ExxonMobil - XTO • Forest Oil: 270k ac • Gastem: 29k ac
Recent Utica Shale Activity in Ohioas 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 wells
Comparison of Marcellus/Utica Activity in OHas of May 28, 2011 Marcellus Shale * Utica Shale * Vertical Permits Issued: 22 Vertical Wells Drilled: 9 Horizontal Permits: 9 Horizontal Wells Drilled: 5 • Vertical Permits Issued: 68 • Vertical Wells Drilled: 44 • Horizontal Permits: 11 • Horizontal Wells Drilled: 5 * Permits issued since December, 2009 Source : ODNR Division of Mineral Resources Mgmt.
Current PA Utica Activity Source: REX Presentation to Investors June 2011
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, • 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. Devonian shale outcrop Genesee Gorge, NY
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
Natural Gas R&D at NETL Appropriated Funds Natural Gas R&D only Does not include Sec. 999 Funds (post-2006)
Reserve DOE Eastern Gas Shales Program Schematic Understanding the Resource Developing the Reserves Program Feasibility Study I. Base Program • Geologic Engineering • Existence/origin of gas • Gas distribution • Areal extent • Trap mechanisms • Productive interval & potential • Mechanical rock properties Field Data Potential Reserve Resource/Reservoir Research • Modeling, Diagnostics & Data Base Devel. • Geologic • Reservoir • Stimulation Support Technology Application Extraction Methods and Spacing Requirements in Geologically Favorable Areas Predictive Capability and Reservoir Performance Understanding Possible Production Potential/Mechanisms • Trap • Delineation • Strata distribution • Structure / stress • relationship • Reservoir • Fracture network • Anisotropy • Interconnectedness • Source • Occurrence/distrib. • Storage mech. • Release mech. • Trap mech. Field Verification Probable Validation Tests with Field Diagnostics Proven Production Tests for Verification of Potential II. Advanced Program Option III. Ultimate Program Option
Eastern Gas Shales Project Core Sites Devonian shale outcrop Genesee Gorge, NY
Devonian Shale Partitioning Geologic partitions based on stress data and joint boundaries. Joint data from oriented core fractographic analysis and stress measurements from various sources.
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
“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 maps and x-sections • Analytical products from stimulation research carried out on 50+ wells, including 8 high angle and 4 horizontal tests, and 2 closely-spaced 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 available estimates of technically recoverable gas for gas shales in WV, OH, and KY, with plans for locating, drilling and completing wells.
Utica Shale Play Knowns • Basic geology • 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 Unknowns • 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
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 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
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?
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 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, 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.