Shale gas


Shale gas

:"Shale gas" may also refer to gas generated from oil shale

Shale gas is natural gas produced from shale. Because shales ordinarily have insufficient permeability to allow significant fluid flow to a well bore, most shales are not sources of natural gas. Shale gas is one of a number of “unconventional” sources of natural gas; other unconventional sources of natural gas include coalbed methane, tight sandstones, and methane hydrates.

Shale has low matrix permeability, so gas production in commercial quantities requires fractures to provide permeability. Shale gas has been produced for years from shales with natural fractures; the shale gas boom in recent years has been due to modern technology in creating extensive artificial fractures around well bores. Horizontal drilling is often used with shale gas wells.

Shales that host economic quantities of gas have a number of properties in common. They are rich in organic material, and are mature petroleum source rocks in the thermogenic gas window. They are sufficiently brittle and rigid enough to maintain open fractures. In some areas, shale intervals with high natural gamma radiation are the most productive.

Some of the gas produced is held in natural fractures, some in pore spaces, and some is adsorbed onto the organic material. The gas in the fractures is produced immediately; the gas adsorbed onto organic material is released as the formation pressure declines.

Environment

Chemicals are added to the water to facilitate the underground fracturing process that releases natural gas. The resulting volume of contaminated water is generally kept in aboveground ponds to await removal by tanker or injected back into the earth.

Economics

Although shale gas has been produced for more than 100 years in the Appalachian Basin and the Illinois Basin, the wells were often economically marginal. Higher natural gas prices in recent years and advances in hydraulic fracturing and horizontal completions have made shale gas wells more profitable. In 1996, shale gas wells in the United States produced 0.3 TCF (trillion cubic feet), 1.6% of US gas production; by 2006, production had more than tripled to 1.1 TCF, 5.9% of US gas production. By 2005 there were 14,990 shale gas wells in the US. [Vello A. Kuuskraa, "Reserves, production grew greatly during last decade" Oil & Gas Journal, 3 Sept. 2007, p.35-39] A record 4,185 shale gas wells were completed in the US in 2007. [Louise S. Durham, "Prices, technology make shales hot," "AAPG Explorer", July 2008, p.10.] Shale gas tends to cost more to produce than gas from conventional wells, because of the expense of massive hydraulic fracturing treatments required to produce shale gas, and of horizontal drilling.

The prices required to make drilling and producing shale gas economic are different for each shale area. One study concluded that a wellhead gas price above $4.25 per thousand cubic feet (MCF) was required to make wells completed in the Fayettville Shale in Arkansas economic, while wells to the Woodford Shale in Oklahoma required a price above $6.50. [Don Lyle, "Shale gas plays expand", E&P, Mar. 2007, p.77-79.] Another study concluded that the Fayettville shale required a NYMEX gas price above $5.95 per million British thermal units (MMBTU), and the Woodford shale a price above $7.24; the same study arrived at break-even NYMEX prices of between $5.40 to $7.39 for the Barnett, and $6.31 for Appalachian gas shale. [Michael Godec, Tyler Van Leeuwen, and Vello A. Kuuskraa, "Rising drilling, stimulation costs pressure economics", Oil & Gas Journal, 15 Oct. 2007, p.45-51.] (Note that although the conclusions appear to be different, one is in terms of wellhead price per MCF, and the other study is in terms of NYMEX price per MMBTU).

To date, almost all successful shale gas wells have been in rocks of Paleozoic age, but shales of other ages are being evaluated, particularly in Cretaceous shales in Rocky Mountain basins. [http://geology.utah.gov/online/ofr/ofr-499.pdf] North America has been the leader in developing and producing shale gas because of high gas prices in that market. The great economic success of the Barnett Shale play in Texas in particular has spurred the search for other sources of shale gas across the United States and Canada.

United States

Barnett Shale, Texas

The Barnett Shale of the Fort Worth Basin is the most active shale gas play in the United States. The first Barnett Shale well was completed in 1981 in Wise County. [Scott R. Reeves and others, "New basins invigorate U.S. gas shales play", Oil & Gas Journal, 22 Jan. 1996, p.53-58.] Drilling expanded greatly in the past several years due to higher natural gas prices and use of horizontal wells to increase production. In contrast to older shale gas plays, such as the Antrim Shale, the New Albany Shale, and the Ohio Shale, the Barnett Shale completions are much deeper (up to 8,000 feet). The thickness of the Barnett varies from 100 to convert|1000|ft|m, but most economic wells are located where the shale is between 300 and convert|600|ft|m thick. The success of the Barnett has spurred exploration of other deep shales.

Fayetteville Shale, Arkansas

The Mississippian Fayetteville Shale produces gas in the Arkansas part of the Arkoma Basin. The productive section varies in thickness from 50 to convert|550|ft|m, and in depth from 1500 to convert|6500|ft|m. The shale gas was originally produced through vertical wells, but operators are increasingly going to horizontal wells in the Fayetteville. Producers include SEECO a subsidiary of Southwestern Energy Co. who discovered the play, Chesapeake Energy, Noble Energy Corp., XTO Energy Inc., Contango Oil & Gas Co., Edge Petroleum Corp., Triangle Petroleum Corp., and Kerogen Resources Inc. [Nina M. Rach, "Triangle Petroleum, Kerogen Resources drilling Arkansas' Fayetteville shale gas", Oil & Gas Journal, 17 Sept. 2007, p.59-62.]

Antrim Shale, Michigan

The Antrim Shale of Upper Devonian age produces along a belt across the northern part of the Michigan Basin. Although the Antrim Shale has produced gas since the 1940s, the play was not active until the late 1980s. During the 1990s, the Antrim became the most actively drilled shale gas play in the US, with thousands of wells being drilled. To date, the shale has produced more than 2.5 TCF from more than 9 thousand wells. Antrim Shale wells produced almost convert|140|Gcuft|m3|abbr=on in 2006. The shale appears to be most economic at depths of 1,000-2,000 feet. Wells are developed on 80 acre units. Horizontal drilling is not widely used. Unlike other shale gas plays such as the Barnett Shale, the natural gas from the Antrim appears to be biogenic gas generated by the action of bacteria on the organic-rich rock. [http://www.umich.edu/~urecord/9697/Sep17_96/artcl25.htm]

Upper Devonian Shales, Appalachian Basin

The upper Devonian shales of the Appalachian Basin, which is known by different names in different areas have produced gas since the early 20th century. The main producing area straddles the state lines of Virginia, West Virginia, and Kentucky, but extends through central Ohio and along Lake Erie into the panhandle of Pennsylvania. More than 20,000 wellls produce gas from Devonian shales in the basin. The wells are commonly 3,000 to convert|5000|ft|m deep. The shale is most commonly produced is the Chattanooga Shale, also called the Ohio Shale. [Richard E. Peterson (1982) "A Geologic Study of the Appalachian Basin", Gas Research Institute, p.40, 45.] The US Geological Survey estimated a total resource of convert|12.2|Tcuft|km3 of natural gas in Devonian black shales from Kentucky to New York [http://pubs.usgs.gov/of/2005/1268/]

The Marcellus shale in West Virginia, Pennsylvania, and New York, once thought to be played out, is now estimated to hold 168-516 TCF still available with horizontal drilling. [ [http://www.eurekalert.org/pub_releases/2008-01/ps-ung011708.php "Unconventional natural gas reservoir in Pennsylvania poised to dramatically increase US Production" 2008-01-17] ] It has been suggested that the Marcellus shale and other Devonian shales of the Appalachian Basin, could supply the northeast U.S. with natural gas. [Arthur J. Pyron, "Appalachian basin's Devonian: more than a "new Barnett shale", Oil and Gas Journal, 21 Apr. 2008, p.38-40.]

Floyd Shale, Alabama

The Floyd Shale of Mississippian age is a current gas exploration target in the Black Warrior Basin of northern Alabama and Mississippi. [http://pubs.usgs.gov/dds/dds-069/dds-069-i/REPORTS/69_I_CH_3.pdf] [http://www.gsa.state.al.us/documents/misc_ogb/Floyd%20Shale.pdf]

Conesauga Shale, Alabama

Wells are currently being drilled to produce gas from the Cambrian Conesauga Shale in northern Alabama. [http://www.ogb.state.al.us/documents/misc_ogb/Conasauga%202007_C%20Nov.pdf] Activity is in St. Clair, Etowah, and Cullman counties. ["Operators chase gas in three Alabama shale formations," "Oil & Gas Jour.", 21 Jan. 2008, p.49-50.]

New Albany Shale, Illinois Basin

The Devonian-Mississippian New Albany Shale produces gas in the southeast Illinois Basin in Illinois, Indiana, and Kentucky. The New Albany has been a gas producer in this area for more than 100 years, but recent higher gas prices and improved well completion technology have increased drilling activity. Wells are 250 to convert|2000|ft|m deep. [http://www.ogj.com/articles/save_screen.cfm?ARTICLE_ID=21087] The gas is described as having a mixed biogenic and thermogenic origin.

Pearsall Shale, Maverick Basin

Operators have completed approximately 50 wells in the Pearsall Shale in the Maverick Basin of south Texas. The most active company in the play has been TXCO Resources, although Encana and Anadarko Petroleum have also acquired large land positions in the basin. [Alan Petzet, "More operators eye Maverick shale gas, tar sand potential", Oil & Gas Journal, 13 Aug. 2007, p.38-40.]

Woodford Shale, Oklahoma

The Devonian Woodford Shale in Oklahoma is from 50 to 300 feet thick. Although the first gas production was recorded in 1939, by late 2004, there were only 24 Woodford Shale gas wells. By early 2008, there were more than 750 Woodford gas wells. [Travis Vulgamore and others, "Hydraulic fracturing diagnostics help optimize stimulations of Woodford Shale horizontals," "American Oil and Gas Reporter", Mar. 2008, p.66-79.] [http://www.ogs.ou.edu/pdf/WoodfordOverview.pdf] Like many shale gas plays, the Woodford started with vertical wells, then became dominantly a play of horizontal wells. The play is mostly in the Arkoma Basin of southeast Oklahoma, but some drilling has extended the play west into the Anadarko Basin and south into the Ardmore Basin. [David Brown, "Big potential boosts Woodford," "AAPG Explorer", July 2008, p.12-16.] Tha largest gas producer from the Woodford is Newfield Exploration; other operators include Devon Energy, Chesapeake Energy, Cimarex Energy, Antero Resources, St. Mary Land and Exploration, XTO Energy, Pablo Energy, Petroquest Energy, Continental Resources, and Range Resources.

Caney Shale, Oklahoma

The Caney Shale in the Arkoma Basin is the stratigraphic equivalent of the Barnett Shale in the Ft. Worth Basin. The formation has become a gas producer since the large success of the Barnett play.

Haynesville Shale, Louisiana

Although the Jurassic Haynesville Shale of northwest Louisiana has produced gas since 1905, it has been the focus of modern shale gas activity only since a gas discovery drilled by Cubic Energy in November 2007. The Cubic Energy discovery was followed by a March 2008 announcement by Chesapeake Energy that it had completed a Haynesville Shale gas well. [Louise S. Durham, "Louisiana play a 'company maker'," "AAPG Explorer", July 2008, p.18-36.]

* [http://geology.com/articles/haynesville-shale.shtml Geology.Com: "Haynesville Shale: news, map, videos, lease and royalty information"]

Canada

Utica Shale, Quebec

The Ordovician Utica Shale in Quebec potentially holds convert|4|Tcuft|km3|abbr=on at production rates of 1 MMCF per day [ [http://phx.corporate-ir.net/phoenix.zhtml?c=92251&p=irol-newsArticle&ID=1124217&highlight= Forest Oil Corporation - Press Releases and Notices ] ] [ [http://cnrp.ccnmatthews.com/client/junex/release.jsp?actionFor=838978&releaseSeq=1&year=2008 Press release > Investors > Junex ] ] Gastem, one of the Utica shale producers, has announced plans to explore for Utica Shale gas across the border in New York state. ["New York to get Utica shale exploration," "Oil and Gas Journal", 24 Mar. 2008,, p.41.]

Shares of junior gas explorers targeting the Utica shale region in the St. Lawrence lowlands have surged recently, with some fund managers making big bets on potential winners. "It could be a very large gas discovery for Canada and Quebec," said Eric Sprott, chief executive officer and a manager with Sprott Asset Management Inc. "We probably started [accumulating stock] six months ago, but we went in earnest eight weeks ago." Toronto-based Sprott Asset Management, through several of its funds, holds 14 per cent of Gastem Inc., 15 per cent of Questerre Corp. and 13 per cent of Altai Resources Inc., according to Bloomberg.Fact|date = May 2008

The Quebec shale play, which involves producing gas after fracturing the rock, focuses on an area south of the St. Lawrence River between Montreal and Quebec City. Interest has grown in the region since April, when Forest Oil Corp., a Denver-based oil and gas company, announced a significant discovery there after testing two vertical wells. Forest Oil said its Quebec assets may hold as much as four trillion cubic feet of gas reserves, and that the Utica shale has similar rock properties to the Barnett shale in Texas. Quebec has been known to have natural gas reserves, but advanced horizontal drilling techniques and higher gas prices are only now making the play potentially economically viable, observers say.Fact|date = May 2008 Forest Oil, which has several junior partners in the region, will drill three horizontal wells in Quebec this summer. It has targeted its first production for next year, and full-scale drilling for 2010. Calgary-based Talisman Energy Inc. also plans to drill in Quebec in late summer.

Muskwa Shale, British Columbia

The Devonian Muskwa Shale of the Horn River Basin in northeast British Columbia is said to contain 6 TCF of recoverable gas. Major leaseholders in the play are EOG Resources, Encana, and Apache Corp.. [Alan Petzet, "BC's Muskwa shale shaping up as Barnett gas equivalent," "Oil and Gas Journal", 24 Mar. 2008, p.40-41.]

References

External links

* [http://www.jsg.utexas.edu/news/feats/2007/barnett.html Jackson School of Geosciences (Jan. 2007): "Barnett Boom Ignites Hunt for Unconventional Gas Resources"]
* [http://www.aapg.org/explorer/2001/03mar/gas_shales.cfm AAPG Explorer (Mar. 2001): "Shale Gas Exciting Again"]
* [http://www.oilandgasinvestor.com/pdf/ShaleGas.pdf Oil and Gas Investor (Jan. 2006): "Shale Gas"]
* [http://www.centreforenergy.com/generator2.asp?xml=/silos/ong/ShaleGas/shaleGasOverview01XML.asp&template=1,2,4 Centre for Energy: "What is Shale Gas?"]
* [http://www.admiralbay.com/global/contentserver/files/1022/151596_The_Bright_Future_of_Shale_Gas.pdf US Energy Investor (1 Jan 2005): "The Bright Future of Shale Gas"]
* [http://geology.com/articles/marcellus-shale.shtml Marcellus Shale: horizontal drilling and hydrofracing]
* [http://geology.com/articles/haynesville-shale.shtml The Haynesville Shale of Louisiana, Texas and Arkansas]


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