IPTC17103

Factors Controlling Recovery in Liquids Rich Unconventional Systems

J. Wan, R. S. Barnum, D. C. DiGloria, ExxonMobil Development Company, A. Leahy-Dios, ExxonMobil Upstream
Research Company, R. Missman, J. Hemphill, ExxonMobil Development Company (Consultants)

Copyright 2013, International Petroleum Technology Conference

This paper was prepared for presentation at the International Petroleum Technology Conference held in Beijing, China, 26–28 March 2013.

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Abstract
According to the U.S. Energy Information Administration (EIA), oil production in the United States reached 6.68 million
barrels a day in November, 2012, its highest level since 1994. Development of hydrocarbons in deep unconventional
formations via horizontal drilling and fracturing has been the main contributor to this growth. The two most impactful plays
have been Bakken in North Dakota and Eagle Ford in Texas. While recognizing the success of unconventionals associated
with high oil price and enhanced hydraulic fracture stimulation technologies, it is important to understand the development
challenges and factors controlling recovery.

The combination of limited drainage area and low resource density in unconventional systems has led to low recovery per
well and challenging economics. Unconventional development has increasingly focused on liquids rich systems, especially in
North America due to relatively low natural gas prices. The addition of liquids can improve overall economics, athough two
phase flow impacts and complicates fluid flow and ultimate recovery. Performance of liquids rich systems is highly
dependent on in-place fluid composition and phase behavior. Therefore, understanding liquids rich system phase behavior
and its impact on performance is an important economic consideration. This paper discusses the drive mechanisms for
unconventional plays ranging from dry gas to oil and the importance of geology and rock and fluid properties on rate and
recovery. It specifically explores how the variation in liquid yield impacts rate and recovery.

Introduction
Unconventional development has increasingly focused on liquids rich systems in recent years, especially in North America,
due to relatively low natural gas prices. In order to efficiently explore, appraise, develop and produce liquids rich
unconventional reservoirs, it is important to understand their key characteristics. Due to low porosity, shales typically have
low net hydrocarbon pore thickness and resource density. Low matrix permeability limits productivity and drainage area.
These geologic constraints are countered with hydraulic fracturing, which is critical to achieving larger drainage areas and
economic rates and recoveries. Liquids rich unconventional plays are also significantly impacted by large pressure gradients
in the near wellbore area and by variations in rock and fluid properties.

In recent years, significant progress has been made in understanding geological, petrophysical, rock and fluid characterization
of unconventional plays, as well as their impact on production [1-4]. This paper provides an overview of the key factors
controlling production from liquids rich unconventional plays, particularly the impact of pressure, pressure gradients, and
fluid properties. Numerical and field examples are included.

Fundamental Reservoir Parameters

Unconventional reservoir performance is controlled by many of the same fundamental parameters as conventional reservoirs:
resource density, pressure, effective permeability, well type, completion technique and fluid properties. Table 1 summarizes
the fundamental reservoir parameters that govern unconventional systems. In-place resource depends on porosity, water
saturation and reservoir thickness, with the added possibility for hydrocarbons to exist adsorbed to the rock surface.
Reservoir pressure is especially important because it impacts both resource density and producibility. Production rates are
primarily dictated by effective permeability, but also strongly depend on reservoir pressure and completion technique.
Estimation of completion effectiveness requires the understanding of key parameters such as fracture geometry and
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conductivity. Additional complexities include the placement of proppant and the effectiveness of the completion fluid clean-
up. Finally, fluid properties and composition govern system compressibility and phase behavior which significantly impact
rate and recovery.

Table 1: Fundamental Reservoir Parameters

Low permeability systems pose a unique challenge because determining many of the basic parameters that impact rate and
recovery is more difficult than for conventional reservoirs. Hydraulic fracture properties, formation permeabilities, and in-situ
fluid properties are often key unknowns. For example, the low permeability of unconventional systems necessitates high
drawdowns to produce, making it difficult to obtain single phase fluid samples (above bubble or dew point pressure).
Representative initial fluid samples are needed to accurately forecast future performance, but obtaining these is currently
impractical for some rich liquids systems. This is one example that illustrates the challenges of characterizing low
permeability systems.

Geologic Characterization
To more fully understand tight liquids systems, we need to understand their geology, which can be divided into four general
categories: conventional tight, hybrid/interbedded, porous shale and fractured shale. Table 2 summarizes these four system
types [Error! Reference source not found.]. The performance of each system type is impacted by various combinations of
inter-granular, intra-granular, and fracture-based porosity and permeability. Each system can be commercially viable, but
requires a unique development plan that addresses the geology and physics of recovery.
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Table 2: Geologic Characterization of Unconventional Systems [Error! Reference source not found.]

Hydrocarbon Generation
Equally important to the geology is the maturity of the fluid system, as this has major implications on reservoir development
and quality. Using hydrocarbon generation fundamentals we can better understand the storage capacity, producibility, and
drive mechanisms associated with various unconventional systems. Table 3 provides a systematic overview of the different
commodity types existing in tight systems, spanning black oil to dry gas, and describes their impact on key reservoir
characteristics. These effects stem from two main factors: the extent of organic matter development and the physics of the
associated fluid production.

Table 3: Hydrocarbon Generation Fundamentals and Recovery Impact

The degree of organic-derived porosity and permeability impacts nearly every key component of storage and flow capacity.
In general, immature systems tend to have less organic-derived porosity and permeability, therefore requiring some form of
permeability enhancement (i.e., natural or hydraulic fractures) to yield commercial production rates. As the maturity
increases, more organic-derived porosity and permeability are observed; enhanced permeability is not a pre-requisite for
producibility but is helpful in achieving economic rates. “Fracability” – the ability to effectively hydraulically fracture a well
– is important because effective stimulation is required for commercial viability of most tight rocks.
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Fluid type – including relative volumes of liquid and gas – can have a pronounced impact on drive mechanisms and
producibility. In high liquid content systems that are typical of immature source rocks, permeability enhancements are
typically important for commercial liquid rates. This stems from the higher viscosity and lower compressibility of liquid
hydrocarbons and the unfavorable mobility of two-phase systems relative to dry gas systems. As maturity increases and
larger amounts of gas are generated, permeability enhancements are helpful but may not be required. This trend continues
through the dry gas window, which can be successfully produced even from very low permeability rocks. The remaining
sections of this paper will discuss various unconventional liquids systems in more detail.

Black Oil Systems

Black oil systems represent one extreme in the spectrum of liquids rich systems. In black oil reservoirs where initial pressure
is above saturation pressure, the reservoir fluid initially exists in liquid form and the majority of hydrocarbon transport within
the reservoir occurs in the liquid phase. The primary depletion of such assets can be divided into two distinct drive
mechanisms. Pure expansion drive occurs while the fluid is above the bubble point pressure and exists as a single-phase
liquid. Oil recovery during this period is driven by rock and fluid expansion, with recovery potential above bubble point
proportional to the amount of pressure undersaturation and system compressibility (a composite of oil, water, and rock
compressibilities). Solution-gas drive occurs after the fluid drops below the bubble point and gas begins to evolve within the
reservoir. Initially, the gas is immobile but provides additional system compressibility. As more gas evolves, it exceeds the
critical gas saturation, and free gas begins to move. This accelerates gas production and reduces oil productivity due to
relatively permeability effects.

Black oil system rate and gas-oil-ratio trends are impacted by large pressure gradients in the near-frac and near-wellbore
areas. At high pressure gradients gas breakout occurs at the sandface, while fluids further from the wellbore can remain above
saturation pressure for long periods of time. This dynamic interaction between evolving pressure gradients and increasing gas
saturations impacts future GOR and rate performance. Figure 1 shows that the GOR rises gradually with time and there is a
long oil production “tail”. In a conventional (higher permeability) play, the reservoir pressure would typically be more
homogenous throughout the drainage area, and the GOR would rise rapidly if and when the reservoir dropped below the
bubble point.

Figure 1: Black Oil – Production Behavior

Resource density, matrix permeability, natural fractures, well design, and mobile water also impact behavior. Permeability
enhancements via natural fractures or interbedded sands tend to accelerate production, similar to hydraulic fractures. As such,
permeability and hydraulic fracture stimulation impact well spacing and drainage and are key parameters in development
scenarios. Black oil systems typically have smaller effective drainage areas than gas systems because liquids have higher
viscosity and lower mobility. Therefore, decreasing the distance that liquids have to flow to enter the wellbore will increase
recovery factors. An important corrollary is that low permeability black oil systems may benefit from tighter well and frac
spacing than other liquids rich systems.

Another consideration for black oil systems is that for reservoirs with particularly low permeability, porosity may have little
impact on ultimate recoveries. This is shown in Figure 2. In very low permeability black oil systems, wells produce at very
low rates for long periods of time. These low producing rates constrain the volume of oil that can be produced in a given
time, thereby limiting recovery even if porosity is larger than typically seen in low perm sands. This example shows how
permeability can dominate the deliverability of a system and alter the conventional interplay between key geologic
parameters.
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Figure 2: Black Oil – Porosity and Permeability Relationship

Liquids Rich Systems

Liquids rich systems have increased in importance recently for economic reasons. Liquids rich systems include volatile (near
critical) oils, retrograde gas condensates and wet gases. The distinction between these systems is best visualized by
considering their phase diagrams in relationship to the initial reservoir conditions, as illustrated in Figure 3. The performance
of tight liquids rich systems is highly dependent on the composition of the in-place fluids, their phase behavior, and initial
reservoir conditions.

Figure 3: Liquids Rich Systems – Fluid Types

Volatile oils have a critical temperature that is slightly higher than reservoir temperature, indicating that the fluid is a liquid
in-situ (unless the initial pressure falls within the two-phase envelope). Volatile oils contain a lot of dissolved gas, which
usually translates into a relatively high saturation pressure and results in the reservoir quickly dropping into the two phase
region, forming both a free oil and gas phase in the reservoir. With two phases present for a majority of production life, the
gas phase dominates the drive and recovery.
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The distinction between retrograde gas condensates and volatile oils can be difficult, as retrograde gas condensates also have
a critical temperature that is close to reservoir temperature. However, gas condensates exist when the reservoir temperature is
greater than the critical temperature but less than the cricondentherm. These systems are gas phase in-situ and produce at a
higher gas-oil-ratio than volatile oils. The liquids rich fluid system that is the most gas-dominated is lean wet gases. Wet
gases never drop out liquids in the reservoir; rather, liquids drop out in the wellbore and at the surface as the fluid
temperature cools to separator conditions. Wet gases typically have the least amount of associated liquids, but have the
benefits of high mobility and low viscosity that characterize gas-phase reservoir transport. The absence of liquids in the
reservoir negates concerns over relative permeability effects.

Figure 4 attempts to distinguish these fluid types a different way, by looking at molecular composition. The graphic shows
notional methane, intermediate, and heavy fractions of the various fluid systems. On one extreme, dry gas contains mostly
methane accompanied by a small intermediate contribution and hardly any heavy ends. Conversely, black oil systems contain
a large fraction of heavier molecules with a smaller contribution of intermediates and methane. These extremes represent
systems that are gas- and liquid-dominated, respectively. The liquids rich systems of greatest interest in unconventionals are
those in the middle of the diagram. These are distinctly different from either extreme. On the one hand, they contain enough
heavy and intermediate fractions that liquids are produced and can be recovered by processing the produced flow stream in
surface facilities. However, they also contain sufficient light ends to aid mobility and depress viscosity, leading to a
predominately gas-driven mobile phase.

Figure 4: Typical Fluid Composition [4]

Retrograde Gas Condensates – Impact of Liquid Dropout

In the case of retrograde gas condensates, the reservoir fluid crosses the phase envelope as pressure declines, forming liquids
in the reservoir. The heavier molecules in the condensate can become trapped in the reservoir decreasing surface recovery of
liquids, due to relative permeability effects. Reservoir simulation models using EMpower reservoir simulator [7] indicate that
the amount of liquid dropout is directly proportional to the original liquid content of the fluid and inversely proportional to
the degree of initial undersaturation. In this work, a 9 component compositional model was developed to use as a basis for a
history match. A black oil model was then developed to represent the same fluid, which has a saturation pressure of 3700psia.
The pressure-temperature diagram for the fluid simulated is shown in Figure 5. Matrix permeability and porosity are 400nD
and 8%, respectively. This single-fracture simulation model with fracture half-length of 200ft and fracture conductivity of
100mD-ft represents a 300ft fracture spacing. In this case, each cluster is represented as a single fracture. Only imbibition
was modeled, with relative permeability curves as described in Figure 5. The reservoir was initially at a pressure of 6000psia
and a temperature of 255ºF, with 100% gas. Note that the difference between initial reservoir pressure and saturation
conditions is quite large. The condensate dropout behavior is shown in Figure 5. The in-situ CGR was 53 bbl/MMscf.
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Figure 5: Relative Permeability, Liquids Yield Curve, and PVT

Figure 6 shows that liquid dropout increases as reservoir pressure approaches saturation pressure; Figure 7 shows the
comparison of modeling results with varying in-place CGR for reservoirs with original pressure similar to saturation pressure
(saturated reservoirs) and those reservoirs with original reservoir pressure much higher than saturation pressure
(undersaturated reservoirs). Similar in-place hydrocarbon volumes from corresponding saturated and undersaturated cases
have been observed. Due to the relative permeability impact, the model shows lower liquid recovery for saturated cases than
undersaturated cases, with similar gas recoveries in both cases.

Figure 6: Simulation Model – Impact of Liquid Dropout

Figure 7: Effects of Fluid Properties and Pressure on Condensate Dropout

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Eagle Ford Example

Eagle Ford presents a good example of an unconventional play that exhibits a wide areal variation of maturity. Fluid maturity
is a function of time and temperature as kerogen gets altered first to oil and then to dry gas. In Eagle Ford, the burial history
is straightforward so maturity is strongly related to depth. The oil window is found in the up dip, shallow part of the play
toward the north-west, and dry gas is found in the south-eastern, deeper portion of the play. Local variations can be driven by
underlying deep structure and heat transport.

The fluid type within Eagle Ford varies aerially from oil to volatile oil to condensate to wet gas and finally to dry gas shown
in Figure 8, but note that there can be large well-to-well variations around this trend. Because of the burial history, one would
also expect a strong variation vertically (i.e., a relationship between depth and gas-oil ratio). That trend is indeed observed,
but with many outliers – possibly a result of heterogeneity of the source material and/or of variations in production
operations.

Figure 8: Eagle Ford – Maturity Variation Within a Play

Analyzing all available production data for Eagle Ford allows for better understanding of the impact of liquid content on
production. The criteria for the different fluid type are given in Table 3, as a function of the first 6-month average producing
CGR/GOR. These criteria are different than the phase behavior criteria used earlier, and although they are ‘ad hoc’ they seem
to capture the character of the fluid property variations. Modeling studies indicate that the producing CGR is only similar to
the in-situ CGR for the very first days or weeks of production before any liquid has dropped out in the reservoir. This effect
is more pronounced in richer wells.

Region Criteria
Dry gas CGR < 1 bbl/MMscf
Lean Gas CGR = 1 – 30 bbl/MMscf
Rich Gas CGR = 30-285 bbl/MMscf
Volatile oil CGR = 285-1000 bbl/MMscf
Oil GOR < 1000 scf/stb
Table 4: Fluid Types
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Figure 9 shows cumulative production of wellhead liquids and gas by fluid type. Given the criteria in Table 4, there are 188
wells in Eagle Ford that can be considered dry gas wells, 120 that are lean gas producing wells, 903 rich gas wells, 863
volatile oil wells and 665 oil wells for a total of 2739 Eagle Ford horizontal producing wells as of September 2012 from IHS .

Figure 9: Eagle Ford – Average Cumulative C+C and Gas vs. Time for Each CGR Group
Includes data supplied by IHS, its affiliated and subsidiary companies
and its data partners; Copyright 2012, all rights reserved.

The cumulative liquid production (left plot of Figure 9) show that oil, volatile oil, and rich gas wells have similar liquid
production (60-75 Mstb after 1 year). As expected, very little or no liquid production is observed for lean and dry gas wells.
Cumulative gas production (right plot of Figure 9) reach similar levels for dry, lean and rich gas wells, at 0.5 – 0.8 Bcf after
one year. Not surprisingly, gas production from richer wells is very low. This illustrates something that the industry has
recognized and is actively pursuing: rich gas and volatile oil wells are very productive in both gas and liquids.

Summary
Understanding liquids rich unconventional systems requires that we first understand geology and the phase behavior of the
fluid at reservoir conditions. Description of these systems requires that we define the same fundamental parameters –
resource density, pressure, effective permeability, completion techniques, and fluid properties – which we would need to
predict performance of conventional reservoirs. Performance of liquids rich systems is highly dependent on the composition
of in-place fluids, their phase behavior, and initial reservoir conditions. Compared to conventional liquids dominated
systems, the liquids rich systems of particular interest in unconventional resources are those that are underpinned by gas
dominated transport. Understanding the phase behavior of liquids rich systems and its impact on well performance is a
critically important economic consideration.

Acknowledgements
The authors would like to acknowledge ExxonMobil management for supporting the publication of this article. We also
would like to thank James M. Hacker for improving the technical content of this paper.
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References

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November 2012.
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Nomenclature
Bcf billions of cubic feet at surface conditions
C+C crude plus condensate
CGR condensate gas ratio, surface barrels/million cubic feet
GOR gas oil ratio, standard cubic feet/stock tank barrel
Kr relative permeability, fraction
Mbo/well thousands of barrels of oil per well
Mcf thousands of cubic feet
mD milli-Darcy (10-3 Darcy)
mD-ft transmissibility, milli-Darcy feet
MMcf millions of cubic feet
MMcfd millions of cubic feet per day
MMstb millions of stock tank barrels
Mstb thousands of stock tank barrels
Mstbd thousands of stock tank barrels per day
nD nano-Darcy (10-9 Darcy)
Pdew dew point pressure, psia
Pi initial reservoir pressure, psi or psia
Pres reservoir pressure, psia
psia pounds per square inch
RF recovery factor, fraction
Rv oil volatility, stock tank barrels/standard cubic feet
scf standard cubic feet
Sg gas saturation, fraction
stb stock tank barrel
Sw water saturation, fraction
Ti initial reservoir temperature, degrees Fahrenheit

Greek Symbols
φ porosity, dimensionless