Barnett Shale Resources, Reserves & Future Production

Transcription

1 31 st USAEE / IAEE Austin, Texas Barnett Shale Resources, Reserves & Future Production Svetlana Ikonnikova John Browning, Gurcan Gulen, Eric Potter, Qilong Fu, Susan Horvath, Tad Patzek, Frank Male, Ken Medlock, Likeleli Seitlheko and Scott Tinker November, 2012

2 The Project This 2-year project, funded by the Alfred P. Sloan Foundation, is a multidisciplinary study of shale gas that involves geoscientists, engineers, and economists. The goal of the overall project is to determine the capability of U.S. shale gas to contribute to the natural gas supply for the next 20 years, given various engineering and economic parameters.

3 Overview The study consists of 1. Geologic Analysis 2. Estimated Recovery a. Decline-curve analysis b. Well-spacing analysis c. Remaining-resource estimation 3. Refracturing/Recompletion Potential 4. Statistical Panel Analysis 5. Production Outlook: Well and Field Economics

4 The Study The goal of the presented analysis is to : Develop approach to describe a representative well(s) for the further production outlook? Identify refractures and predict their future contribution into the field production?

5 1. Geologic Analysis The main objectives of the geologic study are to determine the key drivers of production estimate original free gas in place (OGIP free )

6 Geologic Analysis Findings (a) PhiH map (b) 10-tier productivity map (c) OGIP free map Porosity thickness (PhiH ) is the primary driver of well-production performance in the Barnett OGIP free of the Barnett: ~444 Tcf OGIP free of the drilled 1-mi 2 blocks: ~280 Tcf

7 2. Estimated Recovery To determine the ultimate volume of natural gas that will be recovered from the play, we need to answer the following questions: a. How much natural gas will the drilled wells produce? b. What is the drainage area and the recovery factor of existing wells? c. How much resource remains, and what percentage can be recovered?

8 Decline-Curve Analysis We confirm that our decline function, derived based on physical properties, is statistically valid, by testing the function against the data for every well

9 Tier Map: Length Adjusted EUR/ft

10 Well-Spacing and Reserve Estimate

11 Google Map of Drainage Areas Wise Co. Denton Co.

12 Recovery Study Results We estimate individual well recovery factor (free gas, field wide), 55% for a horizontal well and 45% for a vertical well. Existing wells (drilled prior to June 2011) are estimated to ultimately extract about 12% of OGIP free for the entire Barnett: the EUR of existing wells is ~22 Tcf. Technically recoverable free gas resource is ~125Tcf, Large areas uneconomic at anticipated gas pricing/technology (only top three tiers developable at prevailing pricing); Substantial premium acreage is inaccessible due to dense urban development at surface. => We are equipped to determine future inventory of wells for each Tier and estimate their commercial value.

13 Well Economics: Average Well Breakeven Worst tiers not viable at possible prices. Only best tiers viable at low prices.

14 Refracture Study Key purpose of the study is to model future refracturing production contribution in the Barnett. Identify potentially refractured wells Assess the contribution of inferred refractures Determine the drivers for refracture performance Predict the future pace of activity w.r.t. economic parameters

15 Data issues There is no public record identifying refractures, so a special procedure was developed to detect them. Significant spikes in production and changed decline parameters were found using Statistical tests to identify breaks Visual check 1060 wells were inferred to be refractured, although we recognize many of these production increases could be related to other factors.

16 Analysis I In an attempt to determine the drivers for the performance of refractures a statistical analysis was conducted

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18 Analysis I 50% of seemingly refractured wells were unable to increase their EUR by more than 0.6 Bcf (less than 25% for Tiers 1-3). The refracture results of horizontal and vertical wells are almost identical. The distribution of inferred refracture results appears relatively stable and unaffected by expected drivers such as well type, rock quality, operator, success of initial completion, well age, etc.

19 Looking into the future By 2011 inferred refractures were contributing about 60 MMcf/d and had captured 269Bcf. If the current trend continues, 125 refractures per year, total production from refractures would be < 90 MMcf/d.

20 Refracturing economics Economics run on different scenarios of refracturing success, based on the distributions of incremental production and natural gas prices.

21 Refracture economics The median inferred refracture needs $5.5 Mcf price in order to achieve 10% IRR breakeven, assuming a refracturing cost of $1 million

22 Sensitivity analysis In High case, a refracture is expected to give 15% IRR at $3.25 price (at the cost of $1mln), but then the pace of activity is only about 40 refractures per year.

23 Summary Refracture EURs have a very consistent distribution with no clear geological, technical, or qualitative drivers. Based on the characteristics of inferred refractures and given our economic assumptions, the contribution of the refractures to the Barnett production will not be significant. It will likely not exceed 90 MMcf/d (< 2% of the field production). Identified wells with unusual production spikes may not include low impact refractures. Production spikes could also indicate other impacts such as well interference, gas lift, or other work-overs.

24 3. Refracture Study Identify potentially refractured wells and analyze their performance to predict the future contribution from refractures. Of 16,000+ wells, 1,060 were identified as apparently refractured; they have contributed only ~60 MMcfd: a 269 Bcf total increment. Performance of refractures was found to be relatively unaffected by rock quality, operator, well type, well age, or original EUR. Weak economics of refractured wells suggests that the current trend of ~125 refractures/year will continue and plateau at 90 MMcfd