Summary of Publicly Available Production Data for the Devonian Berea Sandstone Play, Eastern Kentucky*

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1 Summary of Publicly Available Production Data for the Devonian Berea Sandstone Play, Eastern Kentucky* Brandon C. Nuttall 1 Search and Discovery Article #10895 (2016)** Posted December 12, 2016 *Adapted from oral presentation given at AAPG 2016 Eastern Section Meeting, Lexington, Kentucky, September 25-27, 2016 **Datapages 2016 Serial rights given by author. For all other rights contact author directly. 1 Kentucky Geological Survey, University of Kentucky, 504 Rose St., Lexington, KY (bnuttall@uky.edu) Abstract The Devonian Berea Sandstone was discovered in Lawrence County in the late 1870's. Major Berea development occurred in the 1920's and in the late 1950's with the advent of waterflooding. In the 1980's, Section 29 tight formation tax credits temporarily made the Berea interesting again. Recently, horizontal drilling and slickwater fracture stimulations have led to a Berea renaissance with Lawrence County now the leading oil-producing county in the state. Berea wells completed since 1997 were selected that had enough periods of publicly available production data for analysis to characterize the initial performance of the wells. The maximum reported monthly production rate, first year cumulative production volume, and production decline were modeled. For each well with sufficient data, the better fit of an exponential or hyperbolic decline curve was used to characterize production trends. A gas production index was defined as the ratio of gas production to the sum of oil and gas production on a barrels of oil equivalent basis and used to map regional trends in oil- and gas-prone production. Well performance was divided into three classes based on the first year cumulative production at the 25th and 75th percentiles. Typical oil and gas decline curves for each of these groups exhibit significant differences relative to predicted future performance. Based on limited historic production data, Berea oil producers out-perform typical Kentucky wells. The Berea in Greenup and Lawrence counties is oil-prone while Pike County exhibits a significant wet gas-prone area with some wells reporting varying amounts of oil production.

2 References Cited Fetkovich, M.J., E.J. Fetkovich, and M.D. Fetkovich, 1996, Useful Concepts for Decline-Curve Forecasting, Reserve Estimation, and Analysis: Society of Petroleum Engineers, Reservoir Engineering, SPE PA, February 1996, p Nuttall, B.C., 2014, Review of Kentucky Oil and Gas Production, 2010: Lexington, Kentucky, Kentucky Geological Survey, Series XII, Information Circular 30, 16 p., Website accessed December Nuttall, B.C., 2007, Decline Object: A Python Script to Find the Best Fit Hyperbolic or Exponential Decline Parameters: Lexington, Kentucky, Kentucky Geological Survey, Website accessed December Pilgrim, M., 2004, Dive into Python: New York, Apress Publishing Company, 413 p., Website accessed December 2016.

3 Summary of Publicly Available Production Data for the Devonian Berea Sandstone Play, Eastern Kentucky Brandon C. Nuttall Eastern Section AAPG, Lexington, Kentucky, 26-Sep-2016

4 ray General Stratigraphy East Kentucky Berea c.. c 0 c: 0 rg.- 0- c: 0- > CII 0 '" CII 111..t:: III IV.s=.. <II IV 0.- g..t:: c 0 IV iii 15 Cleveland Upper ~ Huron iii '".s= <II c ill'.s= u Lower Huron 0 " Olentangy Shale Rh inestreet Shale

5 Heterogeneity and Soft Sediment KY 10, near Garrison, Lewis County, Kentucky

6 Horizontal Wells by Year Horizontal Wells ,640 permitted 40 Total Berea oil wells Total Permits Issued OIL O&G GAS D&A Other LOC Permits 0

increase 2011 to 2014 1980 1985 1990 1995 2000

7 2015 Oil Production: 2.8 MMbo Million Barrels % increase 2011 to Kentucky counties, 58 percent from eastern Kentucky

Significant Increase in Berea Oil production (barrels) x 100000 8 7 6 5

8 Significant Increase in Berea Oil production (barrels) x Production Greenup Lawrence Henderson Union

9 Daily Average vs 2010 Study 100% 75% 50% 25% 0% Bo/d Nuttall, 2014, KGS Ser 12, IC 30 All oil wells in 2010 public data set 26 Greenup & Lawrence Horizontal wells At least 1 year of data

10 Kentucky Wells with Devonian Berea Completion Earliest wells: 1879 to 1890 s in Johnson Co., and Blaine area of Lawrence Co.

11 Lawrence County Development History Annual oil production (barrels) Thousands st major fields Waterfloods Tight sands Horizontal wells slickwater fracks Annual number of wells completed Oil (bbl) Wells Completed

12 GREEN CARTER - 0 Devonian Berea Activity Status Historic fields.. Oil Consolidated BOY Oil and gas Oil field - Gas Gas field - - Dry Waterflood Permitted 0 Horizontal well, ~ I OTT N A -=-=.. _~==.. _ Miles ~NSON ~ o~ 0 - -

13 Public Data Selection Criteria Oilandgas.ky.gov 805 KAR 1:180 Well was completed Berea only (no commingling) After 1997 (early-time data available) Oil or gas production values >0 for at least 1 month (no shut-in)

Well Types Number of wells 25 20 15 10 5 Horizontal Vertical 0 Jan-99 Jan-00 Jan-01 Jan-02

14 Well Types Number of wells Horizontal Vertical 0 Jan-99 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Wells with production data

15 Decline Models Begin at period of maximum reported monthly production At least 11 months of data following Correlation coefficient, r 2, at least 0.47 Exponential qq tt = qq ii ee DD iitt qq tt = Hyperbolic qq ii 11 bbdd ii tt 11 bb

16 Maximum reported monthly production rate Sample data At least 12 periods

17 GGGGGG = GGGGGG MMMMMM OOOOOO bbbbbb No oil then what? GOR & GPI Gas Production Index GGGGGG = GGGGGG MMMMMM OOOOOO bbbbbb GGGGGG MMMMMM Ratios on boeq basis Compare cumulative production data 0 to < 0.25 oil well <= 2Mcf/bbl (stripper gas) to 1 gas well >= 100 Mcf/bbl

18 Gas Production Index Number of wells Oil Gas GREENUP JOHNSON LAWRENCE PIKE

19 Regional Distribution of Production Data

20 Production Data Set 139 wells PIKE 50% LAWRENCE 31% JOHNSON 2% Horizontal GREENUP 17% Vertical Number of wells

21 Pike Co. r 2 =0.98 Greenup Co. r 2 =0.87 Lawrence Co. r 2 =0.03 Greenup Co. r 2 =0.002

22 Oil Production Production data 88 wells At least 12 months 32 wells (Cumulative graph) Decline significant (r 2 > 0.47) 10 wells (Type declines)

23 Short Term Oil Well Performance Cumulative barrels (1 st year) 32 wells 100,000 10,000 1, th 25th Median 2,850 bo y = x R² = ,000 10,000 Maximum reported monthly rate (barrels) Horizontal 25th 331 Vertical 75th 1,786 5,750 1,290

24 Short Term Oil Well Performance Cumulative barrels (1 st year) 32 wells 100,000 10,000 1, th 25th Type 3 Type 2 Type 1 y = x R² = ,000 10,000 Maximum reported monthly rate (barrels) Horizontal 25th 331 Vertical 75th 1,786 5,750 1,290

25 Typical Oil Declines Rate (barrels/mo) 3,000 2,500 2,000 1,500 1, Average 21 bo/d 3 11 bo/d bo/d Time (Month) Type 1 Type 2 Type 3 Median decline within each type class

26 Greenup County... Cumulative ~~... ~ Production Producti 10, ,805 3, ,456 7,709 7,471 CARTn Oil bbl mvd Production comparison BOEQ1yr e 10,000 _ AvgDa ilyo il D AvgDailyGas Horizontal well N A oo::=-c=--== Miles 7,826 7,826 3,686 8,320 LAWR NCI MORGAN Gas boeq JOI NSON 1 st year oil and gas total (boeq)

27 Lawrence County Cumulative Production 1 st year oil and gas total (boeq) Oil bbl Gas boeq

28 Gas Production Production data 128 wells At least 12 months 98 wells (Cumulative graph) Decline significant (r 2 > 0.47) 74 wells (Type declines)

29 Short Term Gas Well Performance Cumulative Mcf (1st Year) 98 wells 1,000, ,000 10,000 75% 25% Median 50.2 MMcf 25% 1,501 y = 7.823x R² = , ,000 10, ,000 Maximum reported monthly rate (Mcf) Horizontal Vertical 75% 9,482 82,706 13,345

30 Short Term Gas Well Performance Cumulative Mcf (1st Year) 98 wells 1,000, ,000 10,000 75% 25% Type 1 Type 3 Type 2 25% 1,501 y = 7.823x R² = , ,000 10, ,000 Maximum reported monthly rate (Mcf) Horizontal Vertical 75% 9,482 82,706 13,345

31 Typical Gas Declines Rate (MMcf/mo) Type 1 Type 2 Type 3 Average 5.7 MMcf/mo 2.9 MMcf/mo 0.6 MMcf/mo Median decline within each type class

32 Pike County Cumulative oil production by well ranges from 1 to 2,394 barrels Oil bbl Gas boeq

33 GPI 0.25 Oil prone Greenup Lawrence Martin? Gas prone Pike

34 Synthesis Limited historic production data Most recent public data are 2 years old Few oil wells with >12 months of data Berea oil producers out-perform typical Kentucky well Horizontal, Greenup and Lawrence Counties Oil-prone areas: Greenup and Lawrence Gas-prone area: Pike County Wet gas includes reported oil production

35 Implication There may be additional areas with old, relatively shallow producing wells where horizontal drilling and modern completions could revive that production. If the price is right

36 Thanks

37 References Fetkovich, M.J., Fetkovich, E.J., and Fetkovich, M.D., 1996, Useful concepts for decline-curve forecasting, reserve estimation, and analysis: Society of Petroleum Engineers, Reservoir Engineering, SPE PA, February 1996, p Nuttall, B.C., 2007, Decline object: a Python script to find the best fit hyperbolic or exponential decline parameters: Lexington, Kentucky, Kentucky Geological Survey, URL Nuttall, B.C., 2014, Review of Kentucky oil and gas production, 2010: Lexington, Kentucky, Kentucky Geological Survey, Series XII, Information Circular 30, 16 p., URL Pilgrim, M., 2004, Dive into Python: New York, Apress Publishing Company, 413 p., URL

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