Shale Gas Completions and Fracturing Technology

Gregory Dean
Engineering Manager India

Unconventional Gas

Agenda

Shale Gas Systems Shale Gas Properties Game Changing Technology Evolution of Treatment and Completion Beyond the Barnett Shale Gas Technologies

Understand the Reservoir First

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Unconventional Gas Reservoirs

Tight Gas
Reservoirs with Permeability < 0.1 md.

Geo-Pressure Zone
Extreme depths up to 30,000 ft. Result of compaction of silts and clays forcing gas into bounding layers

Deep Gas
Depths > 15,000ft. Now considered part of tight gas

Natural Gas Hydrates

Frozen water and natural gas crystals found beneath permafrost

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Unconventional Gas Reservoirs

Coalbed Methane (CBM)

Gas produced from coal Significant reserves throughout the world

Shale Gas
Significant shale gas development in North America Earliest shale gas production dates to 1821 Fine grained silt and clay formation interbedded with sands and carbonates

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Shale Gas

Shale Gas Reservoirs

Free Gas Much like conventional reservoirs Adsorbed Gas Gas volume relative to organic content and thermal maturity Thermal maturity is relative to vitronite reflectance of reservoir
Lower VRo Indicates oil (0.5<1.0%) Higher VRo Indicates gas (1.0-1.4%)

Gas From Natural Fractures

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Shale Gas Systems

Biogenic Systems System produced as result of life process Low Vitronite Reflectance (VRo) 0.5-0.75% Antrim Shale in Michigan one of few biogenic Thermogenic Systems Most productive shales are thermogenic type systems Higher VRo 1.0-1.8% Result of thermo cracking of organic matter Lower thermal maturity reservoirs can produce higher volumes of liquid hydrocarbons

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Gas Shale Characteristics

Defined by particle size - finest grained clastic rocks; predominantly clay-sized particles Clay - < 5 microns Silts 5 to 63 microns Sand > 63 microns Contain free gas and adsorbed gas Zone thickness can be significant Extremely tight (low permeability) Shale - 10-4 to 10-6 md Tight Sand - 10-1 to 10-3 md Are currently or have been naturally fractured

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Critical Production Drivers: Other Geological Issues

Mineralogy & Geomechanics

Brittle, fracturable shale / mudstone with lowswelling clay is best More plastic rock is a major problem requiring specialized fracturing fluids and techniques
95%+ Quality Surfactant Foam +ULWP

Geomechanical variability within the reservoir Geomechanical properties of bounding layers Karsts/Faults/Wet Zones

Brinell Hardness Tests with Injection Fluids

Brinnel Harness Kg/mm

Haynesville Shale has relatively low hardness and reacts negatively to prolonged contact with injected water, ultimately resulting in higher proppant embedment. Reducing fluid contact time is critical

Low Permeability Reservoirs

In Low Permeability Reservoirs, Gas Does Not Want to Flow Through

the Rock Radial Flow Makes it even Harder Fracturing Provides Massive Inflow Area and Reservoir Contact 30 m of 8.5 vertical open hole = 20.3 m2 500 m of 6.25 horizontal open hole = 250 m2 8 x 100 m x 4.5 multilaterals = 287 m2 100 m x 30 m elliptical fracture = 20,773 m2

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Low Permeability Reservoirs

There is No Substitute for Inflow Area in Tight and Shale Gas

Formations. The Lower the Permeability, the Greater the Inflow Area Needs to be.
For a given production rate, there is a direct inverse relationship between permeability and inflow area. If the permeability decreases by a factor of 10, the inflow area needs to increase by a factor of 10.

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Major US Shale Basins

Economides & Martin, 2007

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Hydraulic Fracturing Issues in Shale Gas Wells

Proppant selection

Short- and long-term crush resistance Short- and long-term embedment potential Ease of transport Max particle size that will enter the induced fractures Frac fluid cleanup / load recovery Does load recovery matter in gas shales? Anecdotal studies from key shale operators said yes Fracturing under-pressured shales Ultra-high quality foam / ULWP proppant is the problemsolver Effective stimulation along full-length of the lateral Again, MicroSeismic is the tell-tale Clay control Mineralogy from XRD, ESEM

Shale Plays Provide Game Changing Technology

Crosslinked Fluid Treatments Polymer damage, Expensive Slickwater Frac Treatment Economical, Non-damaging, Improved formation contact Horizontal Wells Significant improvement in reservoir contact, Significant production enhancement Simultaneous Frac Additional improvement in reservoir contact, Completion of multiple wells at same time Proppants Smaller mesh proppant (40/70, 100 mesh), Ultra Light Weight proppant

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Microseismic

Diagnostics of fracture treatment Understanding the reservoir, frac orientation Fracture network Fracture fairway as result of large volume slickwater Communication with offset wells Offset well communication can result in improved results Where does it go and what does it touch?

Fisher et al, 2002

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Example of Fracture Treatment Evolution

Barnett Shale discovery well history (CW Slay #1)

Economides & Martin, 2007

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Example Reservoir Study

Hz Wells with Multiple Fracs

Barnett Shale Vertical, Deviated, Horizontal

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Field Development

20

Horizontal Completion Evolution

Uncemented to cemented laterals with solid-body Centralizers and zero free-water cement slurries. Overcame fracture initiation challenges with Limited-entry perf design and acid stages, ball-sealers and abrasive jet cutters. Increased pump rate and number of stages. Sliding sleeves, packers Uncemented liner, no diversion
Pay now or pay more later?

Increased number of perforation clusters and tighter spacing. Larger fluid and sand volumes. Tighter spacing between laterals.

(Managed interference)
Multiple laterals off of the same pad site. Simultaneous offset fracs of pairs and now quads.

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Horizontal Wellbores End Member Fracture Geometries

sh,max sh,min
Transverse

sh,min sh,max
Longitudinal

Simultaneous Fracturing

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Simultaneous Fracturing

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Simultaneous Fracturing

Economides & Martin, 2007

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Going Beyond the Barnett

Industry had to Re-Invent Fracturing and Completing for

the Barnett The Barnett is Probably the Easiest North American Shale Gas Play to Develop
6,500 to 8,500 ft, 200 F Extensive natural fracture networks Barriers to prevent fracturing into water Extensive fracturing industry infrastructure

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Going Beyond the Barnett

How Applicable is Barnett Shale Experience to Other

Shale Gas Plays? Do Operators have the Ability to Experiment in Other Shale Gas Plays?
US & Canada yes Rest of the World - ?

Slick Water Fracturing Techniques CANNOT be Applied

to Deeper, Higher Temperature Formations

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Barnett, Haynesville, Marcellus, & Others

Haynesville
High pressure, high temperature, large volume fracs requiring excellent equipment reliability and job execution Substantial use of Hybrid or Crosslink Frac Designs Strong potential for proppant pack degradation through scaling

Barnett, Marcellus
Lower pressures & temperatures, slick water fracs requiring less technology

Huron
Underpressured reservoir, with best frac results using minimum water technology fluids & ULW Proppants

New Albany, Chattanooga

Also underpressured, few data points

Going Beyond the Barnett

10 9 8

North American Gas Shales Break Even at 10% Rate of Return

$ per MMBtu

7 6 5

$9.46

$9.49

$3.62

2 1 0

Credit Suisse, 2008

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$3.44

$3.68

$4.51

$5.51

$5.53

$5.81

$6.31

$7.41

$7.44

Dec 09

Activity So Far, Outside the USA and Canada

Germany 3 wells/fracs

Saudi Arabia 3 wells/fracs

Lots of Interest in Continental Europe NW Poland, SE France Most at Science Project stage Some drilling and fracturing planned over the next 2 or 3 years. Several years away from any major projects

Australia 1 well/frac
India?

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Key Barnett Shale Gas Technologies

Open Hole Horizontal Multi-Zone Fracturing

Horizontal Wells Allow much greater production from a single wellbore Open hole allows much better contact between fracture and wellbore Multi-Zone Completions Allow zonal isolation and control of fracture initiation Rapid stimulation of entire wellbore

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Fracpoint /DirectStim System for MultiZone Applications

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DirectStim Frac Sleeve System

LitePropTM

LiteProp 108 is neutrally buoyant in a 1.08 SG brine Low friction pressure (with friction reducers) No polymer damage Easy fluid recovery Low cost fluids

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Benefits:
Simplified BHA no straddle reqd

no restriction on depth limits

high frac rates CT acts as a dead leg immediate clean-up no perforating >300 stages in Horizontal US and Canada

Fracturing Treatment Size Trends

Historical Fracturing Jobs and Fluid Volume
8000 10,000,000 9,000,000 8,000,000 6000 7,000,000 Job counts and Bbl/Job 5000 6,000,000 5,000,000 4,000,000 3,000,000

7000

4000

3000

2000
2,000,000 1000 1,000,000 0

Jobs

Avg bbl/job

Bbls/mo.

Poly. (Jobs)

Poly. (Avg bbl/job)

38

Barrels of fluid/month

Microseismic

Fisher et al, 2005

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IntelliFrac Service

A Combination of Fracturing and Fracture Mapping (BHI) Services Real-Time Control of the Fracture Operation Ability to Stay Out of Hazards like Faults Improves Well Spacing Optimizes Development Program Reduces Fracturing Costs through Efficiency

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How to Get There Quicker

Understand the Reservoir First

Completion / stimulation best practices

Well problem analysis Look back studies

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Example Reservoir Study

Barnett Shale

Log10 Cumulative 1st 6 months production All wells

Location Location Location

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Well-Equipped Laboratories
Geological Services Geomechanics Special Core Analysis

Do the Homework
Figure II-6 Young's Modulus of Sample 1F (loading segment) 1200 1000
1st loading cycle (drained) 2nd loading cycle Undrained 3rd loading cycle (drained)

Axial Stress psi

800 600
E (initial) = 101927 psi

400
E (ave) = 39470 psi

E(2nd) = 228717 psi

E (3rd) = 196973 psi

200 0 0.000

0.005

0.010 Axial Strain in/in

0.015

0.020

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Thank you.

Any Questions?