Risks and opportunities associated with shale plays as unconventional projects go global. (Part 3/5)
Posted by D Nathan Meehan December 5, 2013

Risks and opportunities associated with shale plays as unconventional projects go global. (Part 3)

Some of this material was prepared for presentation at the ADIPEC 2013 Technical Conference, Abu Dhabi, UAE, 10-13 November 2013 in a presentation titled “A Consistent Approach to Source Rock Resource Evaluation and Optimization.” This is the third in a series of five blog entries on the subject.

 

Evaluation and Exploitation Procedures

The parameters associated with assessing the quality of a conventional reservoir can be inferred from examining D’arcys law and the material balance equation. They include (net) thickness, porosity, saturations, areal extent, relative and absolute permeability, fluid properties, pressure and temperature, etc. These are all relatively straightforward to measure even if many reservoirs are spatially heterogeneous and lateral connectivity may be unclear.

Shale resources are often (apparently) laterally continuous with very small variations in thickness. Drainage area is very difficult to estimate for shales and is ultimately the major determinant of well spacing which in turn drives the number one capital component, total number of wells to be drilled.  It is often unclear what constitutes net pay. Conventional reservoir net pay issues are generally associated with cutoff values for permeability that are consistently higher than the maximum values in the shales. Even with these complexities, the values that we evaluate in shale reservoirs do not often translate into values that (in turn) are obvious drivers of material balance and fluid flow equations. Measures of thermal maturity such as Ro affect fluid properties; however, TOC affects the appropriate hydrocarbons in place indirectly.

Seismic evaluation including 3-D seismic can be shown to estimate properties that are important to shale performance. Correlation of computed properties to TOC or even to well performance is quite promising, especially when integrated with hydraulic fracture design and other tools to optimize reservoir evaluation.

Shale well performance heterogeneity is very large, leading some to speculate that it is essentially a stochastic process within a geologically similar area. The distribution of well performance can be shown to have a wide coefficient of variance and an apparent correlation range that is not much greater than well spacing. Unfortunately this leads some to the conclusion that petrophysical measurements have little value in development applications, particularly as manifested in the “drilling factory” approach.

Manufacturing theory can show that the more identical items are produced, the lower the unit cost. Similarly, the greater the number of custom built products in a given factory, the slower the cost reduction.  As applied to a drilling factory, there may be a tendency to eliminate measurements and evaluations hoping to drill a large number of wells and accept the statistical variations in performance. This approach is likely to result in deteriorating economic performance and wasted economic resources. It is far better to apply the correct measurements and optimize locally. For example, a well with no petrophysical measurements and only a gamma-ray log is likely to suggest the selection of geometrically spaced hydraulic fracture stages. It is then unlikely that well performance would obtain commercial results from any higher fraction of the stages than is typical. An LWD image log identifying natural fractures coupled with a petrophysical and geomechanical models may decrease the total number of stages and change where they are initiated resulting in lower costs and better production and recovery. Similarly, locally optimized frac design permits the avoidance of geohazards or fracturing into offsetting wells.  The objective of continuously updating an earth model containing all the measured data and current working model allows the “drilling factory” to a) decrease the cycle time to evaluate new areas and b) lower well costs and improve performance.

An example of the process associated with this performance is given in Figure 6. Examinations of the maps of well performance in relatively mature shale fields show “sweet spots” where large numbers of relatively good wells are drilled. Even in these sweet spots there may be a significant number of mediocre to poor wells. In poorer areas “sour spots?” the typical well performance is poor but there may be a reasonable number of mediocre to good wells. The evaluation process is designed to rapidly evaluate performance and account for reservoir variables. Drilling hundreds of wells, plotting the results and reaching conclusions for well optimization based on noisy correlations will result in sub-optimal results and excessive costs. The old saying is “data without theory is trivia, theory without data is guessing.”

 

References

Barton, C. M. (1997, 10 1). In situ stress measurements can help define local variations in fracture hydraulic conductivity at shallow depths. The Leading Edge , 16, pp. 1653-1656.

BP. (2013). Statistical Review of World Energy 2013. Retrieved from Statistical Review of World Energy 2013: http://www.bp.com/en/global/corporate/about-bp/statistical-review-of-world-energy-2013.html

Ebrahim Fathi, I. Y. (2009, November 1). Matrix Heterogeneity Effects on Gas Transport and Adsorption in Coalbed and Shale Gas Reservoirs. Transport in Porous Media , pp. 281-304.

Lafollette, R. (2012). Shale Gas and Light Tight Oil Reservoir Production Results: What Matters? Proceedings of the Twenty-third (2013) International Offshore and Polar Engineering. ISBN 978-1-880653-99–9 (Set);, pp. 54-60. Anchorage, AK: International Society of Offshore and Polar Engineers (ISOPE).

Meehan, D. N. (2012, 1 23). Hydraulic Fracturing: An Environmentally Responsible Technology for Ensuring our Energy Future (I of III). Retrieved 9 1, 2013, from Baker Hughes Reservoir Blog: http://blogs.bakerhughes.com/reservoir/2012/01/23/hydraulic-fracturing-an-environmentally-responsible-technology-for-ensuring-our-energy-future-i-of-iii/

Meehan, D. N. (2012, 1 23). Hydraulic Fracturing: An Environmentally Responsible Technology for Ensuring our Energy Future (I of III). Retrieved 9 1, 2013, from Baker Hughes Reservoir Blog: http://blogs.bakerhughes.com/reservoir/2012/01/23/hydraulic-fracturing-an-environmentally-responsible-technology-for-ensuring-our-energy-future-i-of-iii/

Meehan, D. N. (2012, 2 6). Hydraulic Fracturing: An Environmentally Responsible Technology for Ensuring our Energy Future (II of III). Retrieved 9 1, 2013, from Baker Hughes Reservoir Blog: http://blogs.bakerhughes.com/reservoir/2012/02/06/hydraulic-fracturing-an-environmentally-responsible-technology-for-ensuring-our-energy-future-ii-of-iii/

Meehan, D. N. (2012, 2 2). Hydraulic Fracturing: An Environmentally Responsible Technology for Ensuring Our Energy Future (Part III of III). Retrieved 9 1, 2013, from Baker Hughes Reservoir Blog: http://blogs.bakerhughes.com/reservoir/2012/02/20/hydraulic-fracturing-an-environmentally-responsible-technology-for-ensuring-our-energy-future-part-iii-of-iii/

Randy F. LaFollette, W. D. (2012). Practical Data Mining: Analysis of Barnett Shale Production Results with Emphasis on Well Completion and Fracture Stimulation . SPE Hydraulic Fracturing Technology Conference . SPE 152531. The Woodlands, Texas, USA,: Society of Petroleum Engineers.

U.S. Energy and Information Administration. (2013). Technically Recoverable Shale Oil and Shale Gas Resources: An Assessment of 137 Shale Formations in 41 Countries Outside the United States. Retrieved September 1, 2013, from Analysis & Projections: http://www.eia.gov/analysis/studies/worldshalegas/

U.S. Energy and Information Administration. (2013). U.S. Imports of Crude Oil. Retrieved 9 1, 2013, from EIA Crude Oil data: http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=pet&s=mcrimus1&f=m

Z. Dong, S. H. (2012, January). Resource Evaluation for Shale Gas Reservoirs . SPE Economics & Management , 5-16.

Zoback, M. (2012, 7 1). Identification and Hydraulic Properties of Critically-Stressed Faults and Anticipating Triggered Seismic and Aseismic Fault Slip. Retrieved 9 1, 2013, from https://pangea.stanford.edu: https://pangea.stanford.edu/researchgroups/scits/sites/default/files/Zoback%20Presentation.pdf

 

 

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