Shale Fracking What are the Risks? Control of Well Coverage Issues

Similar documents
Shale Development: Understanding and Mitigating Risks Associated with Well Construction and Hydraulic Fracturing

Shale Gas Drilling Doing the Job Right! Cuadrilla Resources Limited

Hydraulic Fracturing Emerging Issues in North America

Fracturing Overview: Fact vs. Fiction Andy Bond, Subsurface Manager December 8,

Unconventional Resources

Michigan Department of Environmental Quality Resource Management Division Office of Oil, Gas, and Minerals

Rick Henderson, Field Operations Supervisor DEQ Office of Oil, Gas, and Minerals

Water Issues Relating to Unconventional Oil and Gas Production

Alternative water supplies for sustainable oilfield operations Cotulla, Texas November 15, 2013

RP 65 and other API Activities on Carbon Capture and Storage

SHALE FACTS. Production cycle. Ensuring safe and responsible operations

Hydraulic Fracturing with Cryogenic Fluids: Boosting Hydrocarbon Production While Conserving Fresh Water Resources

Shale Gas Overview. September 25, 2014

SAMPLE. US Shale. Insight Report

Colorado Oil and Gas Conservation Commission

White Paper: Shale Gas Technology. September Shale Gas Technology 2011 NRGExpert Page 1 of 8


CAIRN ENERGY INDIA PTY LIMITED (Incorporated in New South Wales, Australia ACN )

Hydraulic Fracturing Operations Well Construction and Integrity Guidelines API GUIDANCE DOCUMENT HF1 FIRST EDITION, OCTOBER 2009

Fracing: Basics and Concerns

Coiled Tubing for Downhole Applications

Benelux Conference Pan European Days

David Blackmon Managing Director for Public Policy and Strategic Communications FTI Consulting

Fundamentals of Horizontal Well Technology

The Unconventional Reservoirs Revolution and the Rebirth of the U.S. Onshore Oil & Gas Industry

Bank of America Merrill Lynch 2012 Global Energy Conference

Rule 326: Mechanical Integrity Guidance

1951 Clarence Iverson #1

DEPARTMENT OF ENVIRONMENTAL QUALITY OIL, GAS, AND MINERALS DIVISION OIL AND GAS OPERATIONS. Filed with the Secretary of State on

U.S. energy independence: Bakken helping pave the way

Fracking Safety & Economics November 9, 2017 America 1 st Energy Conference, Houston Tx.

Core Value. Unconventional Gas Production and Water Resources: Lessons from the U.S. Brisbane, Sydney & Canberra, Australia February 27 March 1, 2012

Course Duration Location Course Delivery 6 Days Lagos Instructor Led

Dr. Will Fleckenstein Adjunct Professor, Colorado School of Mines and SPE Distinguished Lecturer

Why Mines is a Source of Petroleum Technology Investment Opportunities

Hydraulic Fracturing & Well Integrity 101

Natural Gas A Game Changer

SHELL ONSHORE OPERATING PRINCIPLES

NEVADA EXPLORATION PROJECT

An Evaluation of Well Construction/Drilling/Conversion Methodologies Associated with Gas Storage Depleted Field Operations in the United States

Focus on Hydraulic Fracturing

Yukon Oil and Gas Overview:

Hydraulic Fracturing Technology

Environmental Protection and Marcellus Shale Well Development. Scott Perry Director Bureau of Oil and Gas Management

Outlook for the Oil and Gas Industry

Using Reduced Emission Completions (RECs) to Minimize Emissions During Flow-back of Hydraulically Fractured Gas Wells

Shale Development Does Cheap Energy Really Mean Flaming Tap Water?

The Better Business Publication Serving the Exploration / Drilling / Production Industry AOGR

Available online at Energy Procedia 1 (2009) (2008) GHGT-9

The SPE Foundation through member donations and a contribution from Offshore Europe

Water Resource Management for Shale Energy Development

Safely Harvesting Energy

Natural Gas Reform Campaign

Overview of CA Gas Storage, Aliso Canyon Blowout Root Cause Analysis and Timeline

KENTUCKY DIVISION OF OIL & GAS KIM COLLINGS, DIRECTOR STATE-BID PLUGGING AND ABATEMENT PROGRAM

Successful Completion Optimization of the Eagle Ford Shale

INTERNATIONAL PERFORATING SYMPOSIUM 2014

ADVANCED FLUID SOLUTIONS FOR COMPLEX WELLBORE CHALLENGES

ADVANCED FLUID SOLUTIONS FOR COMPLEX WELLBORE CHALLENGES

FRAC WATER-REGULATION OF QUANTITY AND QUALITY, AND REPORTING BY TEXAS GROUNDWATER CONSERVATION DISTRICTS

J-W Operating Company Corporate Objectives

Unconventional Gas & Oil Environmental & Regulatory Issues. Robert Kleinberg Schlumberger Research Cambridge, Massachusetts.

Effective June 17, 2013, the Energy Resources Conservation Board (ERCB) has been succeeded by the Alberta Energy Regulator (AER).

Memorandum July Task Force on Ensuring Stable Natural Gas Markets BPC Staff Lourdes Long Water Impacts Associated with Shale Gas Development

2016 UPSTREAM TRAINING PROGRAMS

Injection Wells for Liquid-Waste Disposal. Long-term reliability and environmental protection

Assessing the Perceived and Real

Frequently Asked Questions

CHARACTERIZATION, ANALYSIS OF PROSPECTIVITY AND ASSESSMENT OF SUBSURFACE RISKS FOR EUROPEAN SHALES Jan ter Heege

Morningstar Document Research

The U.S. Shale Revolution What Happened and What s Next?

New Technologies, Innovations

Go with the Flow. Reduce Water Costs Using Continuous Pumping Completions

The Next Oilfield Step:

Hydraulic Fracturing & Public Health: What we know, what we can infer and how we can move forward

COPYRIGHT. Sand Control Fundamentals. Virtual Instructor Led Session #2

Water Service Wells Summary Information. October 2017 Version 2.6

John Harris President Reservoir Development Services. Houston, Texas March 9-10, 2011

Outlook for the Upstream Sector of the Oil and Gas Industry

Responsible Environmental Management of Oil and Gas Activities in New Brunswick Case Studies and Lessons Learned

HYDRAULIC FRACTURING 101

Shale Projects Becoming Globally Important U.S. Shale Oil & Gas Experience Extrapolates Globally

California Well Stimulation Treatment Regulations

Experiences in the Salt Creek Field CO2 Flood

Overview of Completions

Multistage Stimulation. Efficiency at every stage

Hydraulic Fracturing for Shale Gas Production: Practices & Progress

Understanding Mechanical Integrity Testing and Underground Gas Storage: The Key to Success

Hydraulic Fracturing Test Site (HFTS)

Petroleum Production Systems

Draft Directive 051. Wellbore Injection Requirements. Contents. Revised edition August 14, Replaces previous edition issued March 1994.

Swellpacker Technology Bests Zonal Isolation Challenge in High-Pressure Wells

Trican s Burst Port System (BPS)

Hydraulic Fracturing Test Site (HFTS)

Unconventional Reservoirs

Oil and Gas 101: An Overview of Emissions from Upstream Oil and Gas Exploration and Production Sources

Common Oil & Gas Environmental Issues

Unconventional Gas: Efficient and Effective Appraisal and Development. Jeff Meisenhelder VP Unconventional Resources

Fracture Stimulation Just the Facts, Ma am

Transcription:

Willis North America Energy Conference Shale Fracking What are the Risks? Control of Well Coverage Issues Daniel C. Dan Mason Houston - London Willis North America Energy Conference Shale Fracking: What are the Risks? May 17, 2012 Slide No. 1

Personal Background Daniel C. Dan Mason, Senior Vice President, MatDan - Houston Bachelor of Science in Petroleum Engineering, The University of Texas, 1986 26 years of oil & gas experience 12+ years of oil & gas well operations experience in Drilling planning and execution; Production management and well workover; and, Facility maintenance and construction. 13+ years of onshore and offshore energy claims adjusting experience Well control / underground crossflow; Offshore structures, Onshore Property / Oilfield equipment; and, Upstream facilities. Expertise with OEE, Physical Damage, and Upstream Liability claims both Onshore and Off. Willis North America Energy Conference Shale Fracking: What are the Risks? May 17, 2012 Slide No. 2

Horizontal Drilling and Fracking Development of shale formations has been result of improvements in the following technologies: Drilling equipment; Monitoring instrumentation; and, Hydraulic fracturing. Exploration & Development of shale formations has contributed to the reversal in the decline in U.S. domestic oil and gas production. But, from the shale drilling, allegations of damage to fresh water resources have arisen and so have videos My Water s On Fire Tonight http://www.youtube.com/watch?v=timfvngr_q4 Taken in part from http://www.eia.gov/forecasts/aeo/pdf/0383(2011).pdf Willis North America Energy Conference Shale Fracking: What are the Risks? May 17, 2012 Slide No. 3

Wells drilled in the United States Total Rig Count: 1974 (as of 11-May-2012) only 45 offshore Of that, some 70% are drilling for oil, 30% are drilling for gas And of that 60% are being drilled horizontally, while 28% vertically & 12% directionally. US Onshore only: Total Rigs: 1929 on 11-MAY-2012 Up 8 or 0.4% compared to previous week. Up 132 or 7.3% year-over-year. Baker Hughes Interactive Rig Count: http://gis.bakerhughesdirect.com/rigcounts/default2.aspx Willis North America Energy Conference Shale Fracking: What are the Risks? May 17, 2012 Slide No. 4

Wells drilled in the United States Energy Information Administration http://tonto.eia.gov/dnav/ng/hist/e_ertwg_xwc0_nus_cm.htm Willis North America Energy Conference Shale Fracking: : What are the Risks? May 17, 2012 Slide No. 5

Horizontal Shale Well Characteristics Drill multiple wells on a wellsite to decrease wellsite pad preparation costs per well; and, minimize environmental impact / footprint. Drill longer horizontal laterals to expose more formation to the wellbore; which will, enhance the estimated ultimate recovery (EUR) from the well (i.e. better economics). Drilling Horizontally and Hydraulic Fracturing these wells allows operators to develop a reservoir area with a significantly fewer number of wells; and, significantly enhance oil and gas recovery & return on investment. Note: The hydraulic fracture ( frack ) is performed AFTER the drilling operation. Willis North America Energy Conference Shale Fracking: : What are the Risks? May 17, 2012 Slide No. 6

Horizontal Drilling Locations designed to drill multiple wells in close proximity saves time and money, employing easily movable / skid-mounted drilling rig systems; water-base drilling mud in upper portion of well; and, oil-base drilling mud in horizontal portion of the well. Do so many wells in close proximity pose a risk? Willis North America Energy Conference Shale Fracking: : What are the Risks? May 17, 2012 Slide No. 7

Hydraulic fracturing - Shales The hydraulic fracturing operation will need large quanties of: Water (with certain additives); Sand (proppant); and. Pumping equipment. Willis North America Energy Conference Shale Fracking: : What are the Risks? May 17, 2012 Slide No. 8

Equipment associated with the hydraulic fracture operation Willis North America Energy Conference Shale Fracking: : What are the Risks? May 17, 2012 Slide No. 9

The Oil / Gas Operator s Objective To conduct operations in an environmentally responsible yet economic fashion. Statutes and regulations have been implemented in every oil and gas producing state of the United States. Operators respect these rules to ensure that oil and natural gas operations are conducted in an environmentally responsible fashion. Operators protect groundwater from the contents of the well during drilling, hydraulic fracturing, and production operations by installing a combination of steel casing and cement sheaths. The subsurface zone or formation containing hydrocarbons produces into the well, and that production is contained within the well all the way to the surface. Maintain well integrity: Operators regularly monitor the well during drilling and production operations to ensure that these operations proceed within established parameters and in accordance with the well design, well plan, and permit requirements. In the successful organization, no detail is too small to escape close attention. Lou Holtz Willis North America Energy Conference Shale Fracking: : What are the Risks? May 17, 2012 Slide No. 10

Shale Horizontal Drilling Incidents with Shale Wells Houston - London Willis North America Energy Conference Shale Fracking: : What are the Risks? May 17, 2012 Slide No. 11

Case #1: Wellhead leaking during hydraulic fracture treatments A leak developed between flanges of the tubinghead and lower master valve during the hydraulic fracture treatment. Once the leak started, there was no way to shut off the flow with surface equipment. Actions Tighten the leaking flange bolts. Pump gunk squeezes. Stop the well flow to change-out wellhead equipment, using Mechanical plug; and / or, Kill mud / cement plug. Environmental Frac water leaked from the well and flowed from the wellsite pad. Frac water crossed a cattle pasture, then to a creek and river. Potential Gross Cost US$ 8,000,000 (100%), of that US$ 3,800,000 (100%) is environmental related. Willis North America Energy Conference Shale Fracking: : What are the Risks? May 17, 2012 Slide No. 12

Case #2: Casing failure during hydraulic fracture treatments The intermediate casing burst near the surface of the well during the hydraulic fracture treatment. Treating pressure increased unexpectedly during the fracking operation. The flow from the intermediate casing eroded a hole through the surface casing, then the flow came to the surface near the well. Actions Shut down pumps; mobilize coiled tubing to the location. Circulate kill mud within the wellbore; set mechanical or cement plug(s). Evaluate the casing condition; repair or plug and abandon the wellbore. Environmental Underground breech transpired at a depth near potable water formations. Soil samples were evaluated; contaminated soil removed to remediation. Water monitoring wells were drilled, per agreement with the regulatory authorities; the sampling regimen was decided and implemented. Potential Gross Cost US$ 4,000,000 (100%), of that US$ 750,000 (100%) is environmental related. Willis North America Energy Conference Shale Fracking: : What are the Risks? May 17, 2012 Slide No. 13

Case #3: Casing failure during production / flowback The production casing in a well was installed and a multi-stage hydraulic fracture treatment was completed. During flowback operations, the production casing burst within the well and flow traveled to surface between intermediate and production casings, then, through a casinghead valve. Well control specialists were dispatched to assist. The well flow eventually bridged. Actions Identify depth of damaged casing; evaluate condition, then Repair damaged casing by back-off and install new from surface, or install patch, or, plug and abandon the well. Environmental Spray / mist of light hydrocarbons ejected from well; liquids contained to the well pad site / reserve pit. Water/oil mixture collected on the wellsite for disposal. Potential Gross Cost US$ 13,000,000 (100%), of that US$ 250,000 (100%) is environmental related. Willis North America Energy Conference Shale Fracking: : What are the Risks? May 17, 2012 Slide No. 14

Case #4: Behind-pipe crossflow discovered during drilling operation The production casing in a well was installed but the hydraulic fracture treatment had not been performed. The drilling rig was skidded-over to commence a new well. While drilling in the new well at a very shallow depth, the new well began to flow fresh water and gas. Well control specialists were dispatched. Diagnostics indicated flow from the other completed well. Wireline operations indicated flow from a potentially productive interval behind the intermediate casing. Actions Identify depths from where crossflow is transpiring; pump mud & cement to control: Repair damaged casing by back-off and install new from surface, install patch, or, plug and abandon the well / redrill. Environmental Fresh water with gas ejected from well. Water collected on the wellsite; fluid vacuumed; new rock added. Potential Gross Cost US$ 13,500,000 (100%), of that US$ 850,000 (100%) environmental related. Willis North America Energy Conference Shale Fracking: : What are the Risks? May 17, 2012 Slide No. 15

Common OEE Incident Characteristics? Each incident is different, with different cost combinations coming into play. Well control. Restoration, redrill, or possibly both. Environmental clean-up and monitoring operations. Care, custody & control. Evacuation of nearby residents? Other costs? Willis North America Energy Conference Shale Fracking: : What are the Risks? May 17, 2012 Slide No. 16

Preventative Measures Prevent wellhead failures during hydraulic fracture treatments Attention to new/used wellhead equipment condition / testing regimen Prevent casing ruptures during the fracture treatment or production Attention to casing condition prior to performing fracture treatments, then Attention to casing condition prior to flowback / production operations. Monitor casing condition by use of multifinger caliper or ultrasonic or electromagnetic logs? (Casing Inspection Logs) Inspect cement sheath quality behind casing to prevent behind-pipe flow Attention to cement condition prior to performing fracture treatments Attained by use of cement bond log? or noise/temperature log? Just be prepared! Remember Murphy s Law! Willis North America Energy Conference Shale Fracking: : What are the Risks? May 17, 2012 Slide No. 17

Other Concerns & Considerations Green completions? Can they be done effectively? Earthquake claims? Are they really a concern? Contamination of potable water table? Have you performed baselines? Availability of equipment and supplies? Sometimes equipment can be hard to find Project economics? Is all this going to make me money? Applicability of the incident to OEE Policy wording / provisions / intent? Wellsite / pad size? Sufficient for possible well control needs? Willis North America Energy Conference Shale Fracking: : What are the Risks? May 17, 2012 Slide No. 18

Headlines and References for self study Other Shale Fracking Resources Making Sense of the Overnight Shale Gas Revolution; JPT Online; 16Feb12 http://www.jptonline.org/index.php?id=1525 Hydraulic Fracturing 101; Journal of Petroleum Technology April 2012; SPE 152596 http://www.kgs.ku.edu/prs/fracturing/frac_paper_spe_152596.pdf Shale Gas: Promising Prospects Worldwide; JPT Special Section Shale; Jul11; pp. 37-39 http://www.spe.org/jpt/print/archives/2011/07/11specialsection.pdf Hydraulic Fracturing Operations Well Construction and Integrity Guidelines (API Document HF1) http://www.shalegas.energy.gov/resources/hf1.pdf First Edition, October 2009 DOI / BLM Proposed Rules regarding Well Stimulation on Federal & Indian Lands http://www.doi.gov/news/pressreleases/loader.cfm?csmodule=security/getfile&pageid=293916 May 4, 2012 CNG & LNG Fuel for thought Shale's Transport Revolution: U.S. Trucks Shift To Cheap Natural Gas; 06Mar12 LNG-fuelled ships take root in Europe; 02May12 Willis North America Energy Conference Shale Fracking: : What are the Risks? May 17, 2012 Slide No. 19

Thank you for your attention! www.matdan.com Dan Mason danmason@matdan.com Houston - London Willis North America Energy Conference Shale Fracking: : What are the Risks? May 17, 2012 Slide No. 20