shale gas--opportunities and challenges for indenp

Shalegas:opportunitiesShalegas:opportunitiesandchallengesforandchallengesforindependentsindependentsor,Whator,What’’sinitforme??sinitforme??BobCluff(SIPES1832)BobCluff(SIPES1832)TheDiscoveryGroupInc.TheDiscoveryGroupInc.Denver,ColoradoDenver,ColoradoSIPES2009AnnualMeeting,HiltonHead,S.C.SIPES2009AnnualMeeting,HiltonHead,S.C.WhatWhat’’shot...........shot...........¾¾BarnettShale,FtWorthbasinBarnettShale,FtWorthbasinzzoldreliable,continuestodeliver,oldreliable,continuestodeliver,independentsdowellindependentsdowell¾¾WoodfordShale,westernArkomabasinWoodfordShale,westernArkomabasinzzhard,cherty,notforthefaintheartedhard,cherty,notforthefainthearted¾¾FayettevilleShale,easternArkomabasinFayettevilleShale,easternArkomabasinzzdidndidn’’tworkwithverticalwells,continuoustworkwithverticalwells,continuousimprovementwithhorizontalsimprovementwithhorizontals¾¾MarcellusShaleMarcellusShalezzdarkhorseintheAppalachianbasindarkhorseintheAppalachianbasinzzUpperDevonianshaleshaveproducedsinceUpperDevonianshaleshaveproducedsinceearly1800early1800’’sszzoverpressuredoverpressured,relativelythinMiddle,relativelythinMiddleDevonianshalewasasurpriseDevonianshalewasasurprise¾¾HaynesvilleShaleHaynesvilleShalezzhot,deep,&expensive,butmonsterIPhot,deep,&expensive,butmonsterIP’’ssSouthernmarginshaleplaysSouthernmarginshaleplaysSchlumberger,2005,ShaleGaswhitepapertheMarcellusandHaynesvilledidnotappearonthis2005slide!andwhatandwhat’’snot?snot?¾¾AntrimShaleAntrimShalezzplayiswindingdownastheeconomiclimitshaveplayiswindingdownastheeconomiclimitshavebeenreachedbeenreached¾¾NewAlbanyShaleNewAlbanyShalezznotworkingformostplayersnotworkingformostplayerszzeventhosestickingwithitarelessthanenthusiasticeventhosestickingwithitarelessthanenthusiastic¾¾FloydShaleFloydShalezztheplaythatrefusestodeliverdespiteKenttheplaythatrefusestodeliverdespiteKentBowkerBowker’’ssbesteffortsbestefforts¾¾WesternInteriorCretaceousshalesWesternInteriorCretaceousshaleszz““gasshalesgasshales””havemostlyturnedouttobehavemostlyturnedouttobesiltysiltyzoneszonesinterbeddedinterbeddedinlowTOCmarine,grayinlowTOCmarine,grayshales(Mancos,Baxter,Lewis)shales(Mancos,Baxter,Lewis)¾¾Pennshales,TexasPanhandlePennshales,TexasPanhandlezzplayappearstohavefizzledoutplayappearstohavefizzledout¾¾WestTexasBarnettWestTexasBarnett--WoodfordWoodfordzzhugeapparentGIPhugeapparentGIPzzbutdeliverabilityandcostchallengedbutdeliverabilityandcostchallengedWhotheplayersare.....Whotheplayersare.....¾¾ChesapeakeChesapeake¾¾DevonDevon¾¾SouthwesternEnergySouthwesternEnergy¾¾EOGEOG¾¾XTOXTO¾¾RangeResourcesRangeResources¾¾EnCanaEnCana¾¾NewfieldNewfield¾¾PetroHawkPetroHawk¾¾&many,manymore¾¾BPBP¾¾ExxonMobilExxonMobil¾¾ConocoPhillipsConocoPhillips¾¾ShellShell¾¾Chevronstayingout?Chevronstayingout?&many,manymoreFirstprinciples:Firstprinciples:¾¾Ifyouareinahydrocarbonproductivebasin,Ifyouareinahydrocarbonproductivebasin,zztherewillbeamaturehydrocarbonsourcerocktherewillbeamaturehydrocarbonsourcerocksomeplaceinthesection.someplaceinthesection.¾¾And,iftherearesignificantnonAnd,iftherearesignificantnon--associatedgasassociatedgasfieldsinthearea,fieldsinthearea,zztheremustbeasourcerockinthegaswindowdowntheremustbeasourcerockinthegaswindowdownthere!there!¾¾Now,allyouhavetodoisfindit!Well,exceptNow,allyouhavetodoisfindit!Well,exceptzzyouyou’’llhavetoleaseitfirst,llhavetoleaseitfirst,zzthenhorizontallydrillandthenhorizontallydrillandfracfracit,it,zzandproduceitforyears,andproduceitforyears,zzanddisposeofwater.....................andonandon.anddisposeofwater.....................andonandon.Geologically,whatisimportant?Geologically,whatisimportant?¾¾ThicknessThickness––momo’’isisbettabetta¾¾TOCTOC––productionisfromtheorganicrichblackshales.productionisfromtheorganicrichblackshales.¾¾KerogentypeKerogentype--Thusfar,allproductionisfrommarineThusfar,allproductionisfrommarineshaleswithmostlyTypeIIshaleswithmostlyTypeIIkerogenskerogens..¾¾MaturityMaturity––highmaturityshalesappeartohavemuchhighmaturityshalesappeartohavemuchbetterdeliverabilitybetterdeliverability¾¾PorosityPorosity––highhighmicroporositymicroporosityisgoodisgood¾¾HighgasinplaceHighgasinplace––combinationofh,TOC,porosity,andcombinationofh,TOC,porosity,andmaturity(maturity(→→Sw)Sw)¾¾““FracabilityFracability””––brittleshalesthathydraulicallyfracturebrittleshalesthathydraulicallyfractureworkbest.Naturalfracturesareprobablythere,butnotworkbest.Naturalfracturesareprobablythere,butnotasimportant.asimportant.ThicknessThickness¾¾Ineveryplay,deliverabilityimproveswithgreaterIneveryplay,deliverabilityimproveswithgreatertargetthicknesstargetthickness¾¾TraditionalsubsurfacemappingTraditionalsubsurfacemappingzztotalunitthicknesstotalunitthicknesszzhighGRzonethicknesshighGRzonethicknesszzlowbulkdensitythicknesslowbulkdensitythicknesszzhighresistivityshalethicknesshighresistivityshalethicknesszznetfeetofneutronnetfeetofneutron--densitycrossdensitycross--overover¾¾candoitwithpaperorrasterlogs.Thisisoldcandoitwithpaperorrasterlogs.Thisisoldschoolgeology.schoolgeology.Typicallog,WestT