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UnconventionalShaleGas Development LessonsLearned
Editedby ROUZBEHG.MOGHANLOO
MewbourneSchoolofPetroleumandGeologicalEngineering, TheUniversityofOklahoma,Norman,OK,UnitedStates
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Listofcontributors
GayanA.Abeykoon
HildebrandDepartmentofPetroleumandGeosystemsEngineering,TheUniversityofTexas atAustin,Austin,TX,UnitedStates
FranciscoJ.Argüelles-Vivas
HildebrandDepartmentofPetroleumandGeosystemsEngineering,TheUniversityofTexas atAustin,Austin,TX,UnitedStates
ArashDahi-Taleghani
JohnandWillieLeoneFamilyDepartmentofEnergyandMineralEngineering,The PennsylvaniaStateUniversity,UniversityPark,PA,UnitedStates
HassanDehghanpour
DepartmentofCivilandEnvironmentalEngineering,UniversityofAlberta,Edmonton,AB,Canada
DeepakDevegowda
MewbourneSchoolofPetroleumandGeologicalEngineering,TheUniversityofOklahoma, Norman,OK,UnitedStates
BirolDindoruk
CullenCollegeofEngineering,PetroleumEngineering,UniversityofHouston,Houston,TX, UnitedStates
TawfikElshehabi
PetroleumEngineeringDepartment,UniversityofWyoming,Laramie,WY,UnitedStates
YingkunFu
SchoolofEnergyResources,ChinaUniversityofGeosciences,Beijing,P.R.China;StateKey LaboratoryofShaleOilandGasEnrichmentMechanismsandEffectiveDevelopment,Beijing, P.R.China;DepartmentofCivilandEnvironmentalEngineering,UniversityofAlberta, Edmonton,AB,Canada
ZoyaHeidari
TheUniversityofTexasatAustin,Austin,TX,UnitedStates
AmirmasoudKalantari-Dahaghi
DepartmentofChemicalandPetroleumEngineering,TheUniversityofKansas,Lawrence, KS,UnitedStates
HamidrezaKarami
MewbourneSchoolofPetroleumandGeologicalEngineering,TheUniversityofOklahoma, Norman,OK,UnitedStates
LucyTingweiKo
BureauofEconomicGeology,TheUniversityofTexasatAustin,Austin,TX,UnitedStates
AdemideO.Mabadeje
HildebrandDepartmentofPetroleumandGeosystemsEngineering,CockrellSchoolof Engineering,TheUniversityofTexasatAustin,Austin,TX,UnitedStates
MarkWilliamMcClure
ResFracCorporation,PaloAlto,CA,UnitedStates
RouzbehG.Moghanloo
MewbourneSchoolofPetroleumandGeologicalEngineering,TheUniversityofOklahoma, Norman,OK,UnitedStates
RyosukeOkuno
HildebrandDepartmentofPetroleumandGeosystemsEngineering,TheUniversityofTexas atAustin,Austin,TX,UnitedStates
FelipePerez
MewbourneSchoolofPetroleumandGeologicalEngineering,TheUniversityofOklahoma, Norman,OK,UnitedStates
MichaelJ.Pyrcz
HildebrandDepartmentofPetroleumandGeosystemsEngineering,CockrellSchoolof Engineering,TheUniversityofTexasatAustin,Austin,TX,UnitedStates;Departmentof GeologicalSciences,JacksonSchoolofGeosciences,TheUniversityofTexasatAustin, Austin,TX,UnitedStates
AliRezaei
MidstreamProductionSystems,Houston,TX,UnitedStates
RakiSahai
MewbourneSchoolofPetroleumandGeologicalEngineering,TheUniversityofOklahoma, Norman,OK,UnitedStates
SaeedSalehi
MewbourneSchoolofPetroleumandGeologicalEngineering,TheUniversityofOklahoma, Norman,OK,UnitedStates
CarlH.Sondergeld
MewbourneSchoolofPetroleumandGeologicalEngineering,TheUniversityofOklahoma, Norman,OK,UnitedStates
FnuSuriamin
OklahomaGeologicalSurvey,TheUniversityofOklahoma,Norman,OK,UnitedStates
CatalinTeodoriu
MewbourneSchoolofPetroleumandGeologicalEngineering,TheUniversityofOklahoma, Norman,OK,UnitedStates
AliOusseiniTinni
MewbourneSchoolofPetroleumandGeologicalEngineering,TheUniversityofOklahoma, Norman,OK,UnitedStates
YuxingWu
MewbourneSchoolofPetroleumandGeologicalEngineering,TheUniversityofOklahoma, Norman,OK,UnitedStates
MohamedY.Soliman
CullenCollegeofEngineering,PetroleumEngineering,UniversityofHouston,Houston,TX, UnitedStates
HaoYu
StateKeyLaboratoryofOilandGasReservoirGeologyandExploitation,Southwest PetroleumUniversity,Chengdu,China
SebastianZavaletaVillarreal
MewbourneSchoolofPetroleumandGeologicalEngineering,TheUniversityofOklahoma, Norman,OK,UnitedStates
Preface
ShalegasdevelopmenthasradicallychangedthenaturalgasmarketinNorthAmerica. GiventheabundanceofnaturalgasathistoricallylowpriceshavingbecomeapossibilityintheUnitedStatesowingtotechnologicaladvances,thepresenceofoperators withsufficientriskappetite,andfavorablemonetarypolicies,asaresult,theproductionofnaturalgasintheUnitedStateshasseenanincreasingtrendforthepastdecade andhadpeakedatabout960billioncubicmetersin2019.Thisbolstereddomestic productionhasturnedthecountryintoapowerfulplayeringlobalnaturalgasmarkets.Consequently,theUnitedStateshasrisentobecometheworld'stopexporter frombeinginthelower48countriesinjustsixyearsafteritsfirstLNGcargowas exportedin2016.
Thisbookisanattempttosummarizethetechnologicaladvancesrealizedthrough shalegasrevolution.Thebookhasbeenspecificallydesignedforassetmanagers,petroleumengineers,shalegasstakeholders,andgraduatestudentswhowouldliketolearn moreaboutthedifferentaspectsofandchallengesassociatedwiththeproductionof naturalgasfromshalegasresources.
Chapter1 delvesintothedetailsofassetmanagementissuesanddelineatesupon thereservesreportingforshalereservoirs. Chapter2 addressesgeologicalcharacterizationcoveringtopicssuchasheterogeneityandorganicchemistryofshalegasandends withcasestudiesfrommultipleshaleplays. Chapter3 providesacomprehensive reviewofwellconstructionandcasingfatigueinmultifracturedhorizontalwells. Chapter4 isspecificallydedicatedtowellcontrolchallengesinhorizontalwellsand discussesoperationalcomplicationsthatoccurinshalegaswells. Chapter5 isdevoted towellintegrityandwellborestabilityissuesandpresentsstabilityofwellsin Tuscaloosashaleplaysasthecasestudy.
Chapter6 highlightsthechallengesinformationevaluationoforganic-richmud rocksandgoesintothedetailsofrecentadvancestoovercomethem. Chapter7 reviewsinterpretationmethodsusedfordiagnosticfractureinjectiontestsandexplains theauthor’spreferredapproach. Chapter8 outlinesanewtechniquebasedupon waveletanalysisevaluatingafracturenetworkinthesystemwithsomeexamplesfrom Utah’sFORGEproject. Chapter9 elaboratesproppantplacementandthechallenges associatedwithproppanttransportincomplexfracturenetworks.
Chapter10 presentsgeomechanicalmodelingcoveringtopicssuchasfracturepropagationandcasingdeformation. Chapter11 introducesanewdeclinemodelthatcan successfullydescribewaterproductionduringflowback. Chapter12 outlinesthe implementationofmoleculardynamicssimulationtodescribefluidsdistributionin
organicmatter. Chapter13 providesacomprehensivereviewofrecenteffortsforwettabilityalterationinliquid-richshaleplays. Chapter14 elaboratesonthescaledependencyofpetrophysicalpropertiesofshalesamples.
Chapter15 addressesthechallengesassociatedwithfluidliftingandthepractical treatmentssuggestedforshalesystems. Chapter16 summarizesproductiondataanalysis developedforshalegaswells. Chapter17 delineatesontheapplicationsofartificial intelligenceandmachinelearningalgorithmsinbuildingmeaningfulrelationsbetween experimentaldataandproductionperformance. Chapter18 unveilsanewscreening protocolforevaluationofgasinjectionexperimentsconductedtoenhanceliquidproductionanddiscussestheEagleFordcasestudy. Chapter19 dealswithsamplingbias indata-drivenapproachesusedinshalegasdevelopmentandintroducesanewworkflowfordebiasingspatiallyclusteredsamples.
YuxingWuandSaeedSalehi
5.3
5.6
ZoyaHeidari
6.1
6.2
7.Advancesininterpretationofdiagnosticfractureinjectiontests
MarkWilliamMcClure
7.1
7.1.1 Whatisadiagnosticfractureinjectiontests?
7.1.2 Thebasisforclassicaltechniques,andwhytheybecomeinaccurateinshale187
7.2.1
7.2.3
8.Fracturediagnostictesting
AliRezaei,MohamedY.SolimanandBirolDindoruk
8.1
8.6.3 UtahFORGEexample(effectofheatexchange)
RakiSahaiandRouzbehG.Moghanloo
9.2 Sedimenttransporttheoryandtransportmechanismsinnoncrosslinkedfluids
12.Applicationofmoleculardynamicssimulationsforshalegassystems323 DeepakDevegowdaandFelipePerez
FranciscoJ.Argüelles-Vivas,GayanA.AbeykoonandRyosukeOkuno
14.Scaleconsiderationsduringpetrophysicalcharacterizationofshales393
AliOusseiniTinni
14.3 SamplesizeconsiderationforMICPofshales
15.Challengesassociatedwithliftingandloadinginshalegaswellboresystems405 HamidrezaKarami
SebastianZavaletaVillarrealandRouzbehG.Moghanloo
17.Machinelearningapplicationsinunconventionalshalegassystems433 AmirmasoudKalantari-Dahaghi
18.Experimentalevaluationofenhancedoilrecoveryinunconventional
CarlH.Sondergeld
19.Spatialdataanalyticsforoptimumdatadeclusteringinshalesystems457 AdemideO.MabadejeandMichaelJ.Pyrcz
Fielddevelopmentandasset management
RakiSahai1,2
1AscentResources,OklahomaCity,OK,UnitedStates
2MewbourneSchoolofPetroleumandGeologicalEngineering,TheUniversityofOklahoma,Norman,OK,UnitedStates
1.1Introduction
HydrocarbonproductionfromshalereservoirshastransformedtheAmericanoiland gasindustryandhasledtothecountry’senergyindependenceinrecentyears.The phenomenalgrowthinthelasttwodecades,theresilienceoftheexplorationandproduction(E&P)operatorsamidstcommoditypricevolatilityinthelastfewyears,anda promisingoutlookforthecomingdecadessumsupthestoryofAmerica’sshaleboom recently.
Inthe1950s,whentheAmericangeophysicistM.KingHubbertmadehispredictionsofoilproductionpeakinginthelower48statesoftheUnitedStates,the oilindustrywasstillinitstechnicalinfancy.WhileHubertwasrightaboutthe peakoilinthe1970sat10millionbarrelsperday,commonlyreferredtoasthe “ Hubbert ’ sPeak, ” hisstatisticalanalysisdidnotconsidertheadvancesintechnologythatwouldmaketheextractionofhyd rocarbonsfromultra -tightreservoirs possible.Theapplicationofhorizontaldrillinginconjunctionwithadvancesin hydraulicfracturinghasledtotheeconomicextractionofoilandnaturalgasfrom tight,low-permeabilityunconventionalformations,suchasshale.Thedevelopmentofshaleformations,onceassumedtoactasa “ seal ” intheconventional petroleumsystem,ledtoareversalofUSoilproductiondecline,andin November2017,thedailyproductiononceagainsurpassedthe10millionbarrel markforthefirsttimesince1970( Fig.1.1 ). Fig.1.2 showstheshaleplaysinthe lower48statesoftheUnitedStates.
AlthoughtheUnitedStatesandCanadaarethetwoleadingcountriesinvolvedin thecommercialdevelopmentofshalereservoirs,anassessmentbytheUnitedStates EnergyInformationAdministrationin2013reportedtechnicallyrecoverableresources of7299tcfofshalegasand345MMbblsofshaleoilin137shaleformationsacross41 countries(UnitedStatesEIA,2013).ChinaandArgentinacurrentlyalsohaveongoing developmentprogramsbutwithlimitedcommercialsuccess.
Figure1.1 1920 2020USfielddailyproductionofcrudeoil(USEIA).
Figure1.2 ShaleplaysintheUSLower48(UnitedStatesEIA,2009).
1.2Background
Theterm “shale” referstoahardmudstonecomposedoffineclasticgrainslessthan 1/16mminsize,clayminerals,andorganicmatterwithshaleyorthinlylaminarbedding. Shaleisconsideredthesourcerockforconventionalandunconventionalhydrocarbon accumulations.Intermsofhydrocarbonaccumulationanddistribution,theshaleformationsareclassifiedas “continuous” accumulationsandarenotconfinedtothegeologic structureortrap.However,theformationisheterogeneousinnature,andthemineralogy, organiccontent,naturalfractures,andotherpropertiesvaryspatially.Shalesarecharacterizedbyverylowporosity(typicallylessthan5%)andultra-lowpermeability(100nDto 1mD),makingthemchallenginginrecoveringviablehydrocarbonseconomicallywithout hydraulicfracturing.Thehydrocarbonstoragemechanisminshaleformationsismore complexthantheconventionalsandstonereservoirs.Sincetheshaleformationactasboth sourcerockandreservoirforhydrocarbonproduction,itisreferredtoasa resourceplay
Arecentarticleinthe WallStreetJournal comparedthevariousdevelopmentvariablesforfourdifferenttypesofconventionalandunconventionalplays conventional onshoreplayinSaudiArabia,conventionalplayoffshore,oilsandsinAlberta,and shalereservoirinshaleplay(Fig.1.3).Withthetechnologicaladvancesindrillingand completionsoverthepastdecadeintheUSshaleindustry,thespudtofirstproduction cycletimeisprobablythefastest.Thecostofdevelopingwellshasalsodecreasedsignificantlyoverthepastdecade,makingshaledevelopmentonthelowendofcostperbarrel comparedtootherplays.However,duetothelowporosityandpermeability,the productiondeclinerateisthehighestamongthefour.Thearticleprovidedanexcellentanalogytoexplaintheissuewiththehighproductiondeclinerate producingoil andgasoutofaconventionalwellismuchlikeslowlypouringsodaoutofacan, whereasproducingoilandgasfromahydraulicallyfracturedshalewelllookslikewhat happenswhenyoushakethecanandopenit.Thehydrocarbonscomeoutquickly
Figure1.3 Comparisonofoilandgasexplorationtechnologies. (Modifiedfrom Lee,2020).
fromafracturedshalewellbutstartlosingmomentumrapidly,too.InanEagleFord well,theoilproductiondeclines60%inthefirstyearbutmorethan90%overthefirst 3years.Incomparison,conventionaloilfieldsonlydecline5% 10%ayear(Lee, 2020).Thishasadirectimplicationonthefielddevelopmentwithmoreshalewells (andmorecapital)neededeachyearforproductionmaintenance(i.e.,keepingfield productionflat)orgrowth,comparedtoaconventionalfield.
1.2.1Howwegottowherewearetoday?
Theshalegasrevolutionreferstothephenomenonthatemergedintermsofdomesticgas supplyintheUnitedStates.Theknowledgeofthepresenceoflargeamountsofhydrocarbonsinshalereservoirsisnotnew.Theshalerevolutionisnotdrivenbyarecentdiscovery ofanewtypeofformation;instead,therecentadvancesindrillingandstimulationtechnologyallowedthegeologistsandengineerstoexploittheshaleformationinacost-effective way.Thenaturalgaswasfirstextractedfrom shallowshalereservoirsinFredonia,New York,in1825(Milam,2011),threedecadesbeforethefirstcommercialconventionalwell wasdrilledbyCol.EdwinDrakein1859.However,thefirstcommercialdevelopmentof naturallyfracturedDevonianshalesstartedin1915(Nuttall,2021).Formostofthe 20thcentury,shaleformationwasconsidereda “seal” fortheconventionalreservoirs.It wasnotuntiltheUScrudeoilandnaturalgasproductionstartedtodeclineinthe1970s thattheinterestinshalereservoirsdevelopedinthemid-1970s.
Thefederalgovernmentinvestedinafewsupplyalternatives,includingtheEastern GasShalesProjectandtheGasResearchInstitute,toconductresearchonshalegasdevelopment.Thefederalgovernmentalsoprovidedtaxcreditsviathe1980EnergyActand Section29taxcredittofacilitateresearchanddevelopmentfrom1980to2000(Stevens, 2012).AlthoughtheEasternGasShaleProject(1976 92)increasedgasproductioninthe AppalachianandMichiganbasins,shalegasdevelopmentwasstillwidelyregardedasmarginaltouneconomicwithouttaxcredits(Wang&Krupnick,2013).
Oneoftheearlyinnovationsduringthisperiodwasthedevelopmentofmicroseismic mappingtechnologyatSandiaNationalLaboratoriesin1981.Thistechnologywasdevelopedtomapthecreatedhydraulicfracturesbylocatingthemicroseismicevents,which helpedevaluatetheeffectivenessofthestimulation.Althoughthistechnologywasinitially developedforthecoalbedmethaneresearch,itwassoonappliedtomapthehydraulic fracturegrowthduringthestimulationofnaturally-fracturedshaleformations.Anestimate ofcreatedfracturedimensions,referredtoasthestimulatedreservoirvolume(SRV),was thenusedtodecidethewell-to-well(orlateral)spacingforfull-fielddevelopment.
GeorgeP.Mitchelliscreditedwithpioneeringtheeconomicextractionofshale gasfromtheBarnettShale,whicheventuallyledtotheunprecedentedboomin domesticenergyproduction.ItstartedwithoneofMitchell’sgeologists,JimHenry, whoindicatedthattheBarnettShalehadlargenaturalfracturesandthatitmightbe
possibletoextractnaturalgas.Thetechniqueofhydraulicfracturingwasdevelopedin thelate1940s.MitchellEnergystartedimplementinghydraulicfracturingintheearly 1980sinanattempttoextractnaturalgasfromthesenaturally-fracturedBarnettShale commercially.In1984,MitchellEnergyswitchedfromusingfoam-basedtogel-based fracturingfluid,butitshowedlimitedsuccess.From1987to1997,MitchellEnergy completed304wellsconsideredcommercial,andtheeconomicreturnsweresufficient forcontinuingtheBarnettdevelopmentprogram(NTNG,2016).Itwasnotuntil 1998whenMitchellEnergyadaptedafracturingfluidrecipethatUnionPacific ResourceswasusingtocompletetheCottonValleywells.Thenewfracturingfluid, whichwaslatercalledthe “slickwater,” usedlargevolumesofwaterbutlowerconcentrationsofsandtocreatemicro-fracturesandhelpedunlockgasfromtightBarnett shale. Fig.1.4 showstheproductionresponseofaBarnettShalewellafterrefracswith gelfracandslickwater.Inadditiontoincreasingtheproductionrates,slickwaterfracturingreducedthecostsfrom$375,000perwellforgel-basedfracturingto$85,000 perwellforaslickwatertreatment(NTNG,2016).
Figure1.4 RefracsofashalewellinBarnettShaleperformedbyMitchellEnergy.Theslickwater treatmentdeliveredbetterresultsascomparedtothefoamandgelfracturetreatments. (Modified from King,2010).
Between1998and2002,Mitchellcontinuedtoimplementslickwaterfracture treatmentstootherwellsintheBarnettShale,whichresultedina250%increasein productionfromthearea.Then,in2002,DevonEnergy,recognizingthepotential thatexistedintheBarnettShale,acquiredMitchellEnergy.Itwasnotlongbeforethe otheroperators,suchasChesapeakeEnergy,XTOEnergy,andEOGResources, acquiredleasesintheBarnettShale,andby2005theplaywasproducinghalfatrillion cubicfeetofnaturalgas(NTNG,2016).
Theshalegasrevolutionwasover20yearsinmaking,buttherampingupofproductionstartedinthemid-2000s.Theshalegasandoildevelopmentandproduction intheUnitedStatescanbesummarizedintofourmainphases:
• 2003 08:AlthoughMitchellEnergyexperimentedwiththedrillingandcompletion designsfortheBarnettShalesincetheearly1980sandfoundcommercialsuccessin 1998,thefocusofshaletestingwasrestrictedtotheBarnettShale.TheshalerevolutionacrosstheUnitedStatesgainedmomentumintheearly2000swiththerisingnaturalgaspricesandgrowingdemandfrompower-andenergy-intensiveindustries (Majumdar&Mittal,2018).Duringthisperiod,thegaspriceremainedover$5per MMBtugasfromearly2003tomid-2008,andoperatorsexpandedtheirfocustoshale gasformationsacrossthecountry.Inthesummerof2004,SouthwesternEnergy announcedthatFayettevilleShaleinArkansashadmanyofthesamegeologiccharacteristicsthatmadetheBarnettShaleproductive,whichledtoadrillingboomin northernArkansas.Withsustainedhighgasprices,similardrillingboomsfollowedin theHaynesvilleShale(Louisiana/EastTexas)andMarcellusShale(Pennsylvania)plays.
TheWTIcrudeoilpricesalsopostedoneoftheirbiggestralliesinthisperiod, increasingfromabout$32perbarrelto$142perbarrel,duetothegrowing demandfromdevelopingnations,especiallyChinathatwasrapidlyrampingupits industryandinfrastructure,andriskingenergysecurityconcernsworldwide. Developmentofshaleresourcesduringthisperiodresultedinstronggrowthin investmentandemploymentintheindustry,withbothspikingtothehighestlevels since1990(Majumdar&Mittal,2018).
• 2008 14:TheglobalfinancialcrisisandGreatRecessionof2008negatively impactedtheeconomyandinducedabearmarketonoilandgasprices.Thecrude oilpricesdippedfromtheprevioushighof$142toabout$33perbarrelduring thesecondhalfof2008,whilethegaspricewentfromtradingover$13toultimatelysub-$3perMMBtuin2009.Theindustryrigactivitydecreasedbyabout 45%duringthistimebeforerecoveringwiththecommoditypricesin2009 10. Nevertheless,asaresultoftheshalegasrevolution,shalegasproductionincreased fromcontributingabout1.6%ofthetotalUSnaturalgasproductiontoover20% by2010(Fig.1.2)(Wang&Krupnick,2013).
Eventhoughtheshalegasdevelopmentcontinueduntil2012,theindustrywitnessedagradualshiftfromnaturalgastotightoilproductionduringthisphase.
Operatorsdiscoveredthatcombinedtechnologiesofhorizontaldrillingandslick waterhydraulicfracturingthathavebeensuccessfulintheshalegasreservoirscould beusedtoextractoilfromthetightoilformations.Withtheoilpricesstabilizing around$100perbarrelafterthefinancialcrisis,itstartedwiththeBakkenand ThreeForksformationsintheNorthDakota/Montana,andledEagleFordShale inSouthTexastoquicklybecomingthemostprolificoilfieldintheworld. Similarly,thePermianBasininWestTexas,whichwasonproductiondecline withseveraldecadesofconventionaldevelopmentsincethe1920s,wasrejuvenated asoperatorsfoundthetechnologyeffectiveintappingthehydrocarbonsfromthe highlyproductiveshaleformationssandwichedbetweentheconventionalreservoirs. By2014,theindustryrigcountreachedanall-timehighcountof2000rigs.Oneissue identifiedwiththelownaturalgaspricesandfocalshifttowardmoreoil-basedassets wasthetrendofoperators’ outspendingcashflowandaccumulatingdebt.
• 2014 16:Thisphasesawthelongestandoneofthedeepestdownturnsinoil prices,primarilydrivenbyagrowingsupplyglut.The70%pricedropbetween mid-2014andearly2016wasoneofthethreemostsignificantdeclinessince WorldWarIIandthelongestlastingsincethesupply-drivencollapseof1986.The initialdropinpriceswasprimarilydrivenbyoversupplywithboomingUSshale oilproduction,aslowdowninglobaleconomicactivityresultinginreducedoil imports,andothergeopoliticalconcerns.Inaddition,drillingandcompletionefficiencygainsreducedthebreakevenpricesconsiderably,makingtheUSshaleoil thedefactomarginalcostproducerontheinternationaloilmarket(Stocker, Baffes,&Vorisek,2018).
WiththeWTIoilpricefallingbelow$50perbarrel,concernsaroseregarding thesustainabilityofshaleresourcedevelopment.Heavydebtandhighcapital requirementsforcontinuedshaledevelopmentputpressureontheoperators’ annualbudgetsandcapitalallocationprocess.Limitedcapitalwasdeployedforthe developmentofnew(noncore)shaleplays.
Asshaleplaysmatured,theshaledevelopmentadvancedtothenextstageof hydrocarbonrecovery.In2015,EOGwasthefirstcompanythatreportedsuccessfulpilottestingofgasinjectionEORintheEagleFordShale.Fewotheroperators,includingBHPBilliton,MarathonOil,etc.,haveconductedfieldpilotsin differentshalereservoirssincethen.
• 2017 Current:Inearly2017,theoilmarketwasinasituationinwhichsupply waspersistentlyhigherthanthedemand.Short-termpriceswereveryvolatileand difficulttopredict.Theoperatorshavebuiltupanewinventoryofdrilleduncompletedwells(DUCs)astherigcountrecoveryoutpacedcompletionactivity.Ifthe commoditypricesweretodecreasefurther,theseDUCswouldstillbecommerciallyviableforcompletionasthedrillingcostswereconsideredsunkcosts.In 2018,OPECplushelpedbringthemarketbackintosupply-demandequilibrium.
However,othergeopoliticalfactorsworldwideresultedinsurplusproduction, causingtheWTIpricestofluctuatebetween$45and$65perbarrelformostof thisphase.Whilethedownturninpricesservedasanopportunityfortheoperators toimprovecoststructurebyfurtherenhancingdrillingandcompletiondesignsand efficiencies,theshaleindustrywitnessedseveralconsolidationsacrossdifferentplays amidstbankruptcyfilingsfromsmalltolarge-sizeoperators.
Thecovid-19pandemiccausedanunprecedenteddeclineintheglobaloildemand, leadingtoahistoricmarketcollapseinoilprices.Theoversupplyofcrudeoilresultedin theWTIoilpriceplummetingfrom$18perbarrelto $37perbarrelforashortperiod inApril2020.Theoilpricesreboundedwiththedemandrecoveringafterthelockdownswerelifted,OPECagreeingtosignificantcutsincrudeoilproduction,and globaleconomicactivityrecoveringlaterintheyear.Sofarin2021,operatorshave showncapitaldisciplinefocusingoncashflowdistributionfortheshareholders.Inaddition,operatorshavediscussedconcentratingondebtreductionandhigh-gradingportfolios.TheUnitedStatesshaleindustryhassurvivedthecommoditypricecrashand Covid-19pandemicandhasemergedmoreresilientfromtheslumpinrecentyears.
1.3Conventionalversusunconventionalreservoirs
Oneoftheearliestdistinctionsofconventionalandunconventionalresourceswas madebythelegaldesignationofspecifiedgasresourcesfortaxbreaksintheUnited States.Toreducethecountry’srelianceoncrudeoilimportsandachievethegoalof energyindependence,theUnitedStatesCongresshaspassedseveralstatutesoverthe decadesthatpromotethedevelopmentof “alternative” energyresourcesoutsidethe conventionaloilreservoirs.The1980CrudeOilWindfallProfitTaxActprovidedan additionaltaxbreakincentiveof$3(in1979dollars)perbarrelofoilequivalentto stimulatethedevelopmentofalternativeenergyresourcessuchasoilshale,naturalgas, etc.(Andrews,2006).Inthepetroleumindustry,thesealternativeenergyresources werelaterknownas “unconventional” todistinguishthemfromtheirtaxableconventionalcounterparts.Mostofthesetaxcreditswereusedforthedevelopmentoftight gas,coalbedmethane,andshalegasprojects(Campagna,2015).
Geologically,theestablishmentofapetroleumsystemisessentialfortheaccumulation,entrapment,andproductionofhydrocarbons.Theconventionalpetroleumsystemstypicallyrequirethefivekeyelementsofmaturesourcerock,migration pathway,reservoirrock,trap,andsealforhydrocarbonaccumulationtobepresent. Thehydrocarbonsweregeneratedwhentheorganicmaterialinthesourcerock,usuallyshaleorlimestone,wassubjectedtoheatandpressureovertime.Migrationrefers tothemovementofhydrocarbonsfromthesourcerocktoporousandpermeablereservoirrockandiscriticaltotheformationoftheconventionalpetroleumsystem.The impermeablesealandtrapactasabarriertopreventfluidmigrationbeyondthe
reservoir.Ultimately,themigrationofhydrocarbonsinconventionalaccumulations (structuralorstratigraphictraps)isdrivenbythegravitationalsegregationandbuoyancyforces,resultinginverticalsegregationofgas,oil,andwaterwithinthereservoir (Fig.1.5).Withporositiesusuallyaround10%orhigher,thefluidflowinporous mediafollowsDarcy’slaw.Thesehydrocarbonaccumulationsaregeographicallydiscreteandarereferredtoasdiscontinuousaccumulations.
Incontrast,unconventionalpetroleumsystems,suchasshaleandcoalbedmethane,actasself-sourcedandself-sealedreservoirs.Trapshavenoeffectonhydrocarbon accumulation,andmigrationisunnecessary.Theseareusuallythick,laterallyextensive, andcontinuousdepositsofhydrocarbons.Withmuchlowerporosityandsubmicroto nano-Darcypermeability,acombinationofhorizontalwellsandmultistagehydraulic fracturingisrequiredfortheeconomicexploitationoftheplay.Theproduction mechanismsaredominatedbythesmallporethroatsizesandgasadsorbedtothekerogenmatrixintheseorganic-richreservoirs.Withsmallpores,itiscommonlybelieved thatDarcy’slawmaynotbeapplicableandthattheflowoccursduetoadvectionor diffusion.Additionally,theshaleformationsarecommonlybelievedtobenaturally fractured,andwouldinteractwithcreatedhydraulicfracturesduringstimulationand impactthestimulatedrockvolumeandreservoirdrainageduringproduction.
Anotherwaytoexplainthedifferencebetweenconventionalandunconventional reservoirsisthroughthePetroleumResourceTriangle,originallyprovidedby Masters (1979).Theconventionalresources,theapexoftheresourcetriangle(Fig.1.6),
Figure1.5 Schematicofconventionalandunconventional(shale,coalbedmethane,oilshale) hydrocarbonaccumulations(SonnenbergandMeckel,2017).
representsmallvolumesofhydrocarbonsaccumulationsinstructuralorstratigraphic trapsthatareeasytodevelop.Aswemovetowardtheunconventionalresources,the baseofthetriangle,theserepresentlargevolumesthataredifficulttodevelopdueto increasedoperatingchallengesandwouldrequireimprovedtechnology,andwouldbe moreexpensivetodevelop.Theresourcesretainedinthesourcerocks(shaleandcoal bedmethaneformations)accountforapproximately50%ofallremaininghydrocarbon resources.Theword “unconventional” referstoshalegas,shaleoil,coalbedmethane (akacoalseamgasinAustralia),andgashydrates;thefocusofthischapter(andthis book)isonshaleoilandshalegasproduction.
Cander(2012) arguedthatPetroleumResourceTriangledefinesunconventional reservoirsqualitativelyasdifficultresourcestodevelop.Hedelineatedtheconventional andunconventionalreservoirsbasedontherockandfluidproperties rockpermeability(k),fluidviscosity(μ),andreservoirpressure whicharecriticalforunderstandingthehydrocarbonfluidmobilityinoilandgasreservoirs.Carterplotted permeabilityvs.viscosityanddefinedunconventionalreservoirsquantitivelyas resourcesinwhichtechnologymustbeusedtoincreasethemobilityratio(k/μ)in ordertoachievecommercialflowrates(Fig.1.7).
1.4Assetmanagement
Managingtheentirelifecycleofoilandgasfieldsrequiresthecollaborationofmultidisciplinaryteamsequippedtounderstandthegeologicalandengineeringdata,estimatehydrocarbon-in-place,andthencreateaplantodevelopthefieldeconomically basedontheexpectedproduction.Theoilandgasfieldsusuallyhavealifecycleof 30 60years,fromfirsthydrocarbonproductiontoabandonment.Forconventional fielddevelopment,theE&Plifecycleencompassesfivemajorphasesfromexploration tofieldabandonment(Salazar,2019):
Figure1.6 PetroleumResourceTriangle. (Modifiedfrom McKenzie-Brown,2018).
Figure1.7 Delineationofconventionalandunconventionalresourcesbasedonfluidmobility. (Modified from Cander,2012).
• Preexploration:Beforeexploration,oilandgascompaniesfocusonacquiringlimitedacreagewherepublicorprivatedataindicatesthepossibilityofhydrocarbons beingtrappedorwherecommercialpetroleumdepositshavealreadybeenfound. Thesigningofalandcontractandacreageacquisitionisthemilestonetomoveto theexplorationphase.
• Exploration:Thisphaseaimstoidentifythelikelihoodofhydrocarbondepositsin thesubsurfaceandestimatehowmuchoilandgasmaybepresent.Usually,the explorationphasestartsafewyearsbeforethefirstexplorationwellcanbedrilled. Oncetheacreagehasbeenacquiredandisavailableforexplorationactivities,a teamofgeologistsandgeophysicistsworktogethertomaptheoilandgasprospect (s)byacquiringandprocessingthedetailedG&G(GeologyandGeophysics)data, includingthe2Dand3Dseismicdata,airbornemagneticsurvey,geochemicalsurvey,etc.Thedatacollectedisthenevaluatedtoidentifyasubsurfacegeological formationlikelytoproducehydrocarbons.Justificationfordrillinganexploration wellismadebyassemblinggeoscienceandengineeringevidenceoftheexistence ofanactivepetroleumsystemwithareasonableprobabilityofencountering quality-reservoirrock,atrapofsufficientsize,adequatesealingrock,andappropriateconditionsforgenerationandmigrationofhydrocarbonstofillthetrap.Aninitialexplorationwellisthenplannedtoobtainadditionalsubsurfaceinformation, includingreservoirtopsanddepths,rockandfluidproperties,productionrates,and pressuresbycollectingwelllogs,mudlogs,pressureandtemperaturegauges,etc.
