SHALE GAS WELL COMPLETION & PRODUCTION PRACTICES: CONSERVATION, - - PowerPoint PPT Presentation

Janie M. Chermak, University of New Mexico James W. Crafton, Performance Science Inc. Robert H. Patrick, Rutgers University

31th USAEE/IAEE North American Conference Austin, Texas November 5, 2012

SHALE GAS WELL COMPLETION & PRODUCTION PRACTICES: CONSERVATION, ENVIRONMENTAL & REGULATORY IMPLICATIONS

Shale Gas Plays

THE US SHALE GAS INDUSTRY

• US PRODUCTION
• 2000: 0.4 trillion cubic feet (TCF)
• 2008: 2.0 TCF
• 2009: 3.1 TCF
• 2010: 5.3 TCF (23% of total production)
• 2035 FORECAST
• 13.6 TCF (49%)
• RANGE: 9.7 TCF – 20.5 TCF
• RESERVES ?

(EIA AEO 2012)

Regulatory Concerns

• Environmental
• Conservation
• Energy Policy

Research

• Actual production
• reservoir characteristics
• well characteristics
• capital choices (completion and re-completion)
• production choices
• Ultimate recovery may depend on
• all of the above and
• early management production decisions

The Firm’s Problem

Choose the initial (and periodic) capital investment(s) and production path to max profits over the life of the well subject to:

R( j

)  R( j )  u(R( j ),K j, j), j  1,...,k

q t

   h A t  ,Z t  ,K j

 

  ert

T



P(t)q(t)  w t

 Z t  

   dt  e

r jv(R( j ),K j, j) j1 k



,

• Rj(t)  s[A,K j,R,q,t], R 0

   R0 A 0  ,K0

 , and R(T )  0,

Econometric Model

lnQit  0   j

j1 M



lnZijt   j ln

j A

 



Aijt  F lnF

it  C lnCit 

 j

j D

 



Dijt  e1it lnF

it  0 

 j

j K

 



lnKijt   j ln

j A

 



Aijt   j

j D

 



Dijt  e2it lnCit  0   j

j K

 



lnKijt   j ln

j A

 



Aijt   j

jD



Dijt  e3it

Data

• 111 shale gas wells located in the US
• 39 horizontal wells
• 72 vertical wells
• all wells began production since 2007
• have between 30 and 720 days of production data
• reservoir characteristics
• completion and production choices

• RESERVIOR CHARACTERISTICS
• permeability thickness
• initial reservoir pressure
• perforated interval
• COMPLETION
• hydraulic fracturing fluid
• proppant
• Injection rate
• treating pressure
• stages
• surfactant concentration
• winter fracture
• time to complete
• THE RESULTING COMPLETION PARAMETERS
• fracture Half-length: final and early
• fracture Conductivity
• MANAGEMENT AND TIME
• 10, 30, 60, 90, 1870, 360, 720 days
• ratio: production days to calendar days

BASIC RESULTS

• Consistency across technologies in EQ1
• Initial Reservoir Pressure (+),
• Permeability Thickness (+)
• Fracture Half Length (+),
• Dimensionless Fracture Conductivity (+),
• Difference (-),
• Days (i = 30, 60, 90, 180, 360, 720).
• CNF (+)
• Consistency across EQ2 and EQ3

But these only include the direct impacts from each equation

Direct and Indirect Effects

Qi t

  Kim0 

t

 (hit Kim0

direct

•  hit F

im0 F im0 Kim0 indirect

•  hit Cim0 Cim0 Kim0)

indirect

• dx

CUMULATIVE PRODUCTION ELASTICITIES

VERTICAL HORIZONTAL Variable Elasticity SE Prob>0 Elasticity SE Prob>0 Reservoir Characteristics Initial Reservoir Pressure 2.335 0.33 1 0.521 0.234 0.987 Permeability Thickness 0.564 0.027 1 0.44 0.029 1 Perforated Interval 0.075 0.068 0.863 n.a. n.a. n.a. Completion Outcomes Final Fracture Half-length 0.509 0.088 1 0.354 0.046 1 Early Fracture Half-length 0.177 0.034 1 0.268 0.037 1 Dimensionless Fracture Conductivity 0.433 0.219 0.976 0.213 0.135 0.943 Completion Choices CnF 0.062 0.029 0.984 2.251 0.486 1 Surfactant n.a. n.a. n.a.

• 0.027

0.016 0.055 Average Proppant per Stage 0.0017 0.029 0.523

• 0.182

0.102 0.037 Proppant Concentration 0.11 0.057 0.972 0.213 0.135 0.943 Average Injection Rate 0.027 0.042 0.738 0.237 0.056 1 Average Treatment Pressure

• 0.314

0.124 0.006 n.a. n.a. n.a. Difference

• 0.221

0.035

• 0.124

0.034 Stages n.a. n.a. n.a. 0.19 0.047 1 Production Ratio 0.541 0.218 0.994

• 0.00088

0.0414 0.491

SAME SIGN; DIFFERENT SIGN

DISCRETE EFFECT IMPACTS ON CUMULATIVE PORDUCTION

VERTICAL HORIZONTAL Variable Semi-elasticity SE Prob>0 Semi-elasticity SE Prob>0 Completion Choices Winter Fracture

• 0.0064

0.04 0.436

• 0.0814

0.079 0.151 CnF Intercept n.a. n.a. n.a. 15.351 3.3 1

Summary

• Reservoir characteristics expected impact, but

different magnitudes

• Completion outcomes consistent

but diminishing returns

• Completion choices vary
• CnF positive impact

Conclusions

• Vertical and horizontal wells respond differently
• Conventional wisdom from vertical well history may not

be appropriate for horizontal wells.

• Results are preliminary and only for early period production
• On-going research with expanded data set

Regulatory Implications

• Shale gas completions and production choices may

impact ultimate recovery

What does this imply for natural gas as a transition energy source? What does this imply for conservation regulation?

• Bigger completions jobs may not always be better

Does this have environmental implications?

• CnF, a relatively benign additive out performs traditional

surfactants

What does this imply for environmental regulation?

Thank you. Working paper with technical details: http://papers.ssrn.com/sol3/papers.cfm?abstra ct_id=2162486 and http://www.rci.rutgters.edu/~rpatrick/hp.html Questions and comments: rpatrick@rutgers.edu

Horizontal and Vertical Wells

DATA DESCRIPTION

DESCRIPTIVE STATISTICS

HORIZONTAL RESULTS

VERTICAL RESULTS

Forecast Contributions of Shale Gas

From EIA Early Release AEO 2012