Economic Comparison of Multi-Lateral Drilling over Horizontal Drilling for Marcellus Shale Field Development

1. EME 580: Integrative Design of Energy & Mineral Engineering Systems Economic Comparison of Multi-Lateral Drilling over Horizontal Drilling for Marcellus Shale Field Development By, Taha, Chew, Aditya, Ugur, Sarath, Amey, Hadi Date : 26’th April 2011

2. Index • Problem Statement • Concept Map • Geology • Reservoir Simulation • Stimulation/Hydraulic Fracturing • Well Design • Water Management • Economics • Conclusion

3. Problem Statement • Economic Comparison of Multi-Lateral Drilling over Horizontal Drilling for Marcellus Shale Field Development • Compare Performance of Multilateral Well Completion over Horizontal Well Completion

4. Concept Map Choice of Proppant Pad Fluid # of Stages Multi Stage Fracking Reservoir Properties Horizontal Well Selection of Location Stimulation Geology Multilateral Well Reservoir Simulation CMG Simulations Economical Comparison of Multi lateral wells over Horizontal Wells Water Supply Well Integrity Well Design Water Management Drill Bit Cementing/Casing Design Economic Analysis Waste Water Treatment

5. Geology

6. Shale Gas Plays

9. Isopach

10. Stratigraphy

11. Marcellus Shale Formation Properties: • Permeability : 1*10-5mD • Porosity: 9% • TOC( Total Organic Carbon) : 0.64 – 1.8 • Ro( Vitrinile Reflectance) : ~4.5 ( Dry Gas) • Fracture Spacing : 0.9 ft • Reservoir Temperature : 1500F • Initial Reservoir Pressure : 4500 Psia

12. Lithology of Formation

13. Reservoir Simulation

14. Physical Attributes of CMG Model

15. Horizontal Wells

16. Gas Rate –Case 2 (without Hydraulic Fracture)

17. Multilateral wells

18. Gas Rate – Case 3 (Without Hydraulic Fracture)

19. Comparative Study (Without Hydraulic Fracture)

20. Well Stimulation

21. Comparison of different Proppants

22. Comparison of different Proppant and Fluid Combinations

23. Model Parameters

24. Lithology of Reservoir

25. Treatment Schedule

26. Fracture Profile

27. Results for Stimulation

28. Advantages of the Stimulation job • Lower Cost for Stimulation • Less time required to complete Stimulation job • Increasing sweep efficiency by increasing the area in direct contact with the wellbore

29. Structural Representation of Horizontal Well Case 1

30. Production Values – Case 1

31. Horizontal Well –Case 2

32. Production Values – Case 2

33. Structural Representation of Multilateral Well Case 3

34. CMG Model – Grid Representation

35. Production Values – Case 3

36. Comparision of Production Rates

37. Well Design Drilling Procedure Drill Bits Selection Mud Design Casing Design Multilateral Junction Open Hole lateral

38. Basic Multi-lateral Drilling

39. Drill Bit Selection • PDC Bits with Optimized Torque Management Technology, Cutting Structure Aggressiveness and Unique Roller Cone Steel Tooth • Higher ROP, WOB and better Torque management. • Although the capital cost is 1.5 higher than Tungsten Carbide Bit, it shows higher cost saving in overall drilling process

40. Mud Design • Similar log close to well site that contains similar strata • incorporated safety factor of 1.2 Mud selection: water based mud or potassium-chloride based mud (11.5- 12 ppg)

41. Casing Design • Three design factors: • Options: J-55, C-75, N-80, C-90 and P-110 • All casing grades are check first to so that is can withstand the axial tension, burst pressure and collapse pressure at respective depth and cost effective.

42. - 30 ft Casing Design - 1200 ft • Conductor (30ft): J55, 13-3/8” • Surface (1200ft): P110, 9-5/8” [21.85 lb/ft] • Intermediate (5200ft) : P110, 7-5/8” [15.52lb/ft] • Production (7250/7600 ft): P110 ½ ft, [14lb/ft] • Multilateral Tieback Seal - 5200 ft - 7250 ft - 7600 ft

43. Cont’d • Rate of build angle: 50/50ft • 2 pseudo-zone targets: • L1 – 7572.5 ft • L2 – 7221.5 ft • KOP(Kick off Point): • L1 – 6750 ft • L2 – 6350 ft

44. Multilateral Junction • Shale formation: • unexpected plugging of the lower lateral • Implement Tieback junction sleeve(TBJS)

45. Cementing • Class H cement • from surface to 8000 ft • can be used with typical accelerator and retarder • Additive: • GAS CHECK ® -Halliburton • Specially for gas drilling operation • Avoid gas flow into the annulus after cement has been placed • Bentonite 6% - Extenders • Reduction in slurry density • Increase slurry yield • Reduction in cost • *Reduce thickening time • Sodium Chloride 5% - Accelerators • Increase thickening time • Increase early strength development of cement

46. Open Hole, Multi-stage Fracturing (OHMS) • Instead of cemented liner “plug and perf”, OHMS is applied • No cement is required • Increased the drainage area of the well • Increase production by 30% [Barnett Shale] • New to Marcellus Shale • Availability: Packer Plus Inc.

47. Water Management

48. Water and Wastewater management • Location of the reservoir : Hawley borough (border between Pike county and Wayne county) • Nearest City : Milford, Pike County, PA (distance – approx 34 miles) • Major watersheds • Delaware River which flows beside Milford Township • Milford springs – serves the Borough of Milford and adjoining areas (average water demand – 185,000 to 195,000 gallons per day) • Sawkill Creek and Vandermark Creek which empty into the Delaware river are also major watersheds

50. Milford Township – Pike County