2008 Colorado Energy Epicenter Conference Notes: Grizzled Veterans of the Road Recount Stories Along the Way and Scout the Future of Natural Gas in the Rockies
From ESER oil and gas
jonah and pinedale -- twenty years of learning
overview
- response for many of the developments in multi-stage completion approach currently used
stimulation techniques
- originally 73 days to drill well by forest well --1970's
- snyder oil took 26 days -- early 90s
- mcmurry oil took 17 days -- late 90s
- enana oil (2008) new well with directional and multi-lateral drilling
well spacing
- original spacing 160 acres/well
- snyder 80acres/well in early 90's
- mcmurry oil 40acres/well in late 90s
- encana (2008) -- 5 acres/well
- accelerates extraction at benficial prices
seismic coverage
- forest oil single line anomaly (70s)
- snyder oilused 2d seismic grid in early 90s
- amoco 3d seismic in late90's
- encanafully integraded 3d analysis (2008)
- atrributes of fracture-wellbore interesections show areas of enhanced production
- seperates economic from uneconomic wells
production
- GIS apps currently used
- example: jonahgas.com
- overlay gis production data onto google earth
- note: not using google maps
- price increases widen economic zones of production in jonah field
is there another jonah?
- much exploration to find:
- by ultra, mcmurry, wolverine, burlington, enacana
- overlap of exploration areas makes it difficult to find room for another jonah field like play
- potential remains for 1tcf field
- will encourage continued exploration
- potential remains for 1tcf field
2008 production data of jonah field
- comulated production to aril 2008:
- 2.25 tcf
- 21.8 million bcf/day
- late 2007 daily rate exceeded 1 bcf/day and 10k bopd
- 1100 wells in april 08
trends in the oil-gas industry
overview
- switch from oil to gas
- continuous plays
- petroleum system approach
- field growth
- new technology
- the big grew change
- mergers and aquisitions
rockies wildcat well complletitions 1980-2008 (may)
- in 1981 drilling 3k+ wildcats/year
- in 2008 down to 800 wildcats/year
- higher percentage of oil well completitions in 80's -- dropping dramatically to 2008
the shift away from exploration
- tax laws
- change of investor types
- accountin practices
- mutual fund phenomena
- short 'terminsim'
- provide quick results or investors go away
- price fluctuations
- risk tolerance
rockes well completitions 1980-2008
- 8k+ wells in '81
- drilling many more in 2008
- number of completions (development success rate) mostly in oil fields in 80's
- price drop in 80's led to slow development in 1990's
- well completitions picked up in 1999
- switch occured from oil completitions to natural gas completitions
- reason for switch: stability of prices, larger fields
- switch occured from oil completitions to natural gas completitions
- note: large increase in CBM (coal bed methane) recently
rockies annual gas production 90-05
- currently (2008) between 4.5-5tcf
- production from coal bed methane is 31% of all natural gas production in rockies
rockies oil rpoduction
- good news is that total production of oil from rockies is turning corner -- decline is reversing
converntional and continuous accumulations
- associaated with thermally mature areas in many basins
- both in rockies and globally
- they do exist:
- enormous oil/gas accumulations cannot be debated
- termed "continouos accumulations"
- areas of pervasive saturation of oil, gas
- associated with abnormal pressure
- lack water or water production
- low permeability
- reservoirs can be single or multiplally stacked
- enhanced by fracturing
- oil-gas is of thermal origin
- this continuos plays are "resource plays"
- predicatable and repeatable -- low decline rates
- have ability for significant growth
- technology history
- predicatable and repeatable -- low decline rates
potential areas for large continous accumulations
- exist in many basins in rocky mountain region
drilling 80-84 and 05-08
- spreading out of well drilling activity during 80-84
- most of drilling activity now is concentrated in limited areas
- total number of wells drilled 05-08 is 30k+ wells
- oil starting to return
- most wells cbm and gas
petroleum system
- using hydrocarbon machine approach to analsyzing oil/gas across basins
- idea is to examine source rock locations, pathways, etc...
- examine in a map view to identify resource plays in continous accumulations
- idea is to examine source rock locations, pathways, etc...
oil gas field growth
- existing fields growth significantly over time
- causes:
- reservoir heterogeneity
- improved geologic reservoir models
- changing of operators -- introduces new ideas
example: wattenberg field
- discovered 70 by amoco
- production currently is at maximum of field
- no production decline over 30+ years
- because of addition of multiple new reservoirs and decrease of the well spacing
- currently using 5 acre spacing
- no production decline over 30+ years
- reason for acre spacing shrink:
- necessary to compensate for complex heterogenity of fields
- completition technology:
- trend from single stage to multi-stage frac jobs
predictions
- continued mergers/aquisitions
- continous plays -- petroleum system approach focus
- importance of technology
- price volatility
- new ideas introduce by the new players in existing fields
scouting the future of natural gas
overview of four corners region
- exploration experience in four-corners region (arizona, colorado, utah, nevada)
- one field contians 15tcf of CO2 accumulation
- citthroat field developed by questar -- discovered using 2d seismic and subsurface geology
pinedale anticline project
- questar project
- '40-'49 -- 2 wells drilled
- '55-'57 -- 6 wells drilled
- '60-'64 -- 3 wells drilled
- '71-'75 -- 2 wells drilled
- '80-'88 -- 8 wells drilled
environmental regulations in pinedale field
- drilling severly restricted
- mid-november drilling access restricted until mid-april
- drilling begins august, ends november
- field has 2nd largest recoverable gas reserves in united states
using technology to compensate for environmental restrictions
- remote monitoring, recyclable fluids, directional drilling
- directional drilling:
- compensate for mule deer nesting area restrictions
- drilling multiple wells from single surface site
- questar liquids gathering system
- invested $67M to build system of pipelines to remove condensate, gas fluids away from wells
- necessary because mule deer nesting prevents use of trucks to haul aways liquids
- first year of new pipeline system caused mule deer population to increase, even though drilling occurred in winter time
four corners region drilling technologies
- new gas can now be pursued in environmentally sensitive region because of the use of new technologies
- gas fields are located in federal units
- questar has a very large leasehold in the four-corners region
- problem: area is rich in archaeological monuments -- including national monuments
- june of 2000 canyons national monument created of 164k acres, including questar oil fields
- epitomizes evolution of regulatory environment
conclusions
- resource plays will dominate
- regulatory challenges will be signficiant
- technolgy will be used to compensate for regulatory issues as these new fields are developed
closing comments on new resource plays in the rockies by Bill Barrett Corporation
overview
- some of the largest new resource plays in the rockies are yet to be found
legacy asset development
- resource plays where the development covers multiple decades
- game changing technology plays a role
- new technologies cause growth in these development areas
west-tavaputs gas discovery
- uinta basin, utah
- topographically very complex
- needed to drill on top of three mesas surrounded by canyons
- environmental challenges
- many groups tried to shut down development
- took 2.5 years to get permit acquired
- on 4th year of environmental impact study
- important to plan ahead to compensate for this
- technology is key:
- heliportable 3d survey used
- over 7 aircraft used
- heliportable 3d survey used
drilling
- 20-acre/well spacing
- 1.4tcf
- will cintinue into next decade (2010's)
exploration
- looking at mancos shale of 3k+ ft
- <1Mbcf/day to over 100Mcf/day
piceance basin
- gibson gulch is identified as sweek spot
- microseismic very important to optimize recoveries
- examinined rock cropping to determine downspacing characteristics
- extensive log analysis program
- 3-component 3d surveys used (first in the basin)
- significant new reserves are available
- taking perforations in thin gas shales to recover these
cave gulch -- bullfrog
- paying attention to the old subsurface data
- new field established
- deeper zones explored
- two of the largest land rigs used to drill in-tandem
- 1 billion cubic feet gas/day produced from deepest well (other one was dry)
- two of the largest land rigs used to drill in-tandem
thoughts
- deep profile reservoirs are under-exploited in the rockies
- muddy sandstone
deep overpressured frontier formations
- technologies:
- deep high-pressure horizontal technology
- 3d technology very important
- helps to identify sweet spots
- largest frontier well completed to date
conclusions
- largest resource plays in rocky mountains are yet-to-be-found
- extensive use of technology is very important
- data, data, data
- integrity is more important than the reserves on your books
- regulatory game-plan is important
- hydrocarbons are there -- the right technology must be applied to extract it