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Petroleum Engineering
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From Experimental to Commercial From Experimental to Commercial Production - The Next StepProduction - The Next Step
Ron Stefik, AScT
Sr Reservoir Engineering Technologist
Oil and Gas Commission
Presentation to
Unconventional Gas Technical Forum
Victoria, BC
April 4, 2008
Variance required from normal well spacing, target areas and testing regulations!
>1 well / section for effective recovery
high well density + uniform reservoir quality =
reduced need for individual well data for
development decisions and reserves evaluation
Unconventional Gas - Premise Unconventional Gas - Premise
YES!Existing statutes allow sub-surface issues to be addressed.
Petroleum and Natural Gas Act Drilling and Production Regulation Petroleum and Natural Gas General Regulation
Available via OGC website, under “Regulations”www.ogc.gov.bc.ca
Are existing Regulations adequate for Are existing Regulations adequate for unconventional gas development ? unconventional gas development ?
Note: some changes are planned as a result of the new Oil and Gas Activities Act (OGAA).
Uniform “play type” = reduction or exemption;
logging and sampling.
reservoir pressure testing.
well deliverability (AOF) testing.
well spacing and target restrictions [Good Engineering Practice (GEP) approval].
Flexibility AvailableFlexibility Available
Logging and Sample WaiversLogging and Sample Waivers
High well density provides opportunity for selective data acquisition.
OGC prefers to review area drilling program for pre-approval of logging or sample waivers.
Drilling issue prevent logging?
Email or phone to request exemption.
Initial test requirement
surface data instead of bottom-hole, where appropriate
microfrac (DFIT), RFT, PID may be acceptable
exemptions may be appropriate
Annual pool testing
normally required for a % of wells each year
reduced expectation or exemption in unconventional
Well Testing – Reservoir PressureWell Testing – Reservoir Pressure
minimize flaring!
inline deliverability testing OK, Regulation allows up to 6 months from date of initial production to test
OGC permits pipeline construction prior to well completion in “resource play” areas
testing exemption available
Well Testing – AOF DeliverabilityWell Testing – AOF Deliverability
Surface Position of a WellSurface Position of a Well
Pad drilling is encouraged to minimize surface impacts.
Inter-wellhead distance normally 25 m, however, have allowed 10 m, so long as;
all potential issues are addressed, and a service plan documented.
Off-Target Production PenaltyOff-Target Production Penalty
Penalty factor (fraction < 1.00) applied to well daily gas allowable
OGC is proactive in applying penalty,
request from competitor NOT required
Penalty applies even if no well on affected
off-setting land
If off-target to Crown, penalty does apply!
Penalized well may still be economic
Gas Well Off-Target Production PenaltyGas Well Off-Target Production Penalty
Notes: 1. NS & EW distances measured to nearest corner of the spacing area2. 1 ha = 100 m x 100 m = 104m2
Example: OTF = 8 (200.0 m) (300.0 m) = 0.1778
270.0 104 m2
Gas spacing area =
1 section (DLS)
4 units (NTS)
250 m
250 m
300 m
200 m
OTF = 8 ( NS m) ( EW m)Spacing Area m2
Therefore production limited to 17.78% of DGA
Target area is 250 m inside spacing area.
target
area ~ 9
28
m
~ 698 – 820 m
Off-Target Production Penalty Off-Target Production Penalty (Example #1)(Example #1)
Well located off-target in the corner is considered to also affect spacing area in the diagonal direction
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off-target to the North, West & NW
off-target only to the East
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Map Center on: B-35-E/94-B-10
File: CAPL example.MAP Datum: NAD 27 Projection: Stereographic Center: N56.60835 W122.93725 Created in AccuMap™, a product of IHS
Off-Target Production Penalty Off-Target Production Penalty (Example #2)(Example #2)
For directional/horizontal well, coordinates of “worst point of infringement” to calculate penalty
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surface
bottom
casing ends outside of gas target area,penalty applies
can plug back or not complete toe to avoid penalty
surface
Map Center on: B-87-E/94-B-10
File: CAPL example.MAP Datum: NAD 27 Projection: Stereographic Center: N56.65013 W122.96207 Created in AccuMap™, a product of IHS
Example #1 Example #2
Daily Gas Allowable (DGA)Daily Gas Allowable (DGA)
Reserves based calculation formula
“Daily production limit”=125% of DGA
Form available www.ogc.gov.bc.ca
With off-target factor, can estimate
penalized allowable prior to drilling
Mailing Address: Resource Conservation Branch PO BOX 9329 STN PROV GOV’T VICTORIA BC V8W 9N3
Location: 1810 Blanshard St - 6th Fl Victoria BC V8T 4J1 Phone: (250) 952-0302 FAX: (250) 952-0291
APPLICATION FOR DAILY GAS ALLOWABLE (DGA) Individual Well
Form must be submitted under the authority of the Petroleum and Natural Gas Act R.S.B.C. 1996, c. 361, Drilling and Production Regulation, s.88, to the Oil and Gas Commission, at the address noted above. Information collected on this form will be used for public record in accordance with s.57 of the Drilling and Production Regulation.
Initial Application Revision No. ____________
Well Name Well Authorization No.
Field Pool
Owner’s Calculations COMMISSION USE ONLY
Factors Units Values Obtained from
Values Used in This Calculation
Branch Calculations
Depth to top gas pay mKb
Depth to bottom gas pay mKb
Assigned area A hectares
Average net pay thickness h metres
Average net porosity fraction
Average water saturation (Nominal 0.25)
Sw fraction
Initial pool pressure at MPP Pi kPaa
Formation temperature T K
Initial supercompressibility factor
Zi
Recovery factor R fraction
Unadjusted Daily Gas Allowable (103m3) =
Ah (1- S )P R
35.16398TZ
w i
i
1
3.650
Name Position
Signature Company
Date Phone FAX Email
APPROVAL (for Commission use only)
Off-target penalty factor Daily gas allowable 103m3 (minimum UDGA is 60.0 103m3 in accordance with Section 1 of the Drilling and Production Regulation)
Date Effective
Field Pool
Approval Date
OGC_038_DGA Rev.06/05 Authorized Commission Employee 59070-03/WA
Application form
Off-Target Well Production Penalty WaiverOff-Target Well Production Penalty Waiver
A. Discovery Well absolute
B. Common Ownership - same lease waiver
C. Common Ownership - different lease conditional
D. Different Ownership - different lease waiver
Note: for C & D, operator may apply for waiver on proposed well before drilling
Off-Target Well Production Penalty WaiverOff-Target Well Production Penalty Waiver
A. Discovery Well - “sufficient information has been obtained to determine that the well has encountered a previously undiscovered pool”
not first well to produce; older well with DST may qualify
operator must apply to OGC Victoria office for recognition; no specific application form
supply supporting data to build a “case”, i.e. seismic, pressure, x-sections, etc.
for unconventional gas plays, OGC recognizes regional pools, so discovery application likely
not successful!
Off-Target Well Production Penalty WaiverOff-Target Well Production Penalty Waiver
B. Common Ownership - Same Lease
Off-target waiver is automatic under section 9.4 (oil) and 10.4 (gas) of the Drilling and Production Regulation
No application required
Two spacing areas under one PNG Lease
Off-Target Well Production Penalty WaiverOff-Target Well Production Penalty Waiver
C. Common Ownership - Different Lease
Application required (no specific OGC form) Include cover letter stating request and attached titles map with well location plotted If title of affected lease (PNG #1 in example) expires or changes ownership, penalty may be imposed Affected title must be a P&NG Lease, not a Drilling Licence
PNG#1 PNG#2
PNG#1 & #2 both registered identical ownership
Off-Target Well Production Penalty WaiverOff-Target Well Production Penalty Waiver
D. Different Ownership - Different Lease
Application required (no specific OGC form) Include titles map with well location and letters of consent from registered owner(s) of affected off-setting lease (PNG #1 in example) Approval is “conditional” upon ownership of PNG #1; if changes, OT penalty may be applied PNG #1 must be P&NG Lease, not a Drilling Licence
PNG#1 PNG#2PNG#1 & #2 registered different ownership
Good Engineering Practice (GEP)Good Engineering Practice (GEP)
Allow a pool (or portion) to be exploited without well spacing & target restrictions, i.e. “super” target area.
Effective for “downspacing” or areas of horizontal drilling.
No inter-well minimum distance specified, OGC expects economics and geology to dictate.
Usually no production restrictions, however individual allowable(s) may be applied to lease-line wells.
Flexibility in locating wells to access resource and minimize surface impact.
Good Engineering Practice (GEP)Good Engineering Practice (GEP)
Example gas pool under GEP approval(contiguous full spacing areas)
• off-target locations• HZ wells crossing multiple spacing areas • increased density
OGC requires evidence that “downspacing” will result in increased recovery, not just recovery acceleration. (production decline vs. volumetric)
However, not an issue in recognized unconventional resources.
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File: Dawson Cr Montney GEP.MAP Datum: NAD27 Projection: Stereographic Center: N55.85875 W120.16283 Created in AccuMap™, a product of IHS
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File: CAPL example 2.MAP Datum: NAD 27 Projection: Stereographic Center: N55.85031 W120.15762 Created in AccuMap™, a product of IHS
Good Engineering Practice (GEP)Good Engineering Practice (GEP)
non-contiguous area receives
separate approval
contiguous lands single approval
However both areas may be included in a single application if for the same pool.
Good Engineering Practice (GEP)Good Engineering Practice (GEP)
Individual allowable(s) may be applied to lease-line locations,
Production from each of these gas spacing areas may be limited to a daily
gas restriction
(example 60 103m3/d)
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Map Center on: A-48-J/94-H-1
File: capl example 3.MAP Datum: NAD 27 Projection: Stereographic Center: N57.20004 W120.21297 Created in AccuMap™, a product of IHS
based on objection(s) received.
Good Engineering Practice (GEP)Good Engineering Practice (GEP)
Approval does not have any affect on lease tenure (conversion or continuation).
Pooling still required to produce incomplete gas spacing areas.
GEP areas range in size from one gas spacing to hundreds.
May be approved for land held under a Drilling Licence, provision that PNG Lease selection made prior to production.
Buffer area usually 250 m, opportunity to decrease if both off-setting parties agree.
Note: see ogc.gov.bc.ca “Good Engineering Practice – Background Article”
GEP Application GuidelineGEP Application Guideline
ogc.gov.bc.ca
GEP ApplicationGEP Application
Notice of application posted on OGC website; 3 week period for objections to be filed.
Not a requirement to notify off-setting lease owners of application but suggested good practice if objection expected – early resolution will speed final approval.
Decision if objection is valid at discretion of OGC, no hearing process but applicant allowed to respond.
Approval subject to specified conditions.
Approval transfers to new operator.
Good Engineering Practice (GEP)Good Engineering Practice (GEP)
Usually applied for area of common interest, but not a requirement. Consent letter(s) required from all registered lease owners, including brokers.
example letter on website
Fictitious Oil Company Limited 200, 300 – 4th Ave SW Calgary, AB T2P 2T2 October 24, 2006 Oil and Gas Commission Resource Conservation Branch PO Box 9329 Stn Prov Gov’t Victoria BC V8W 9N3 Attention Ron Stefik: RE: Consent to Application for Good Engineering Practice Please be advised the Fictitious Oil Company Limited, as a registered tenure owner of: Petroleum and Natural Gas Lease(s) # 1234, 2345 and 3456, hereby consents to inclusion of those lands within the application made by Serendipity Oil Company Limited, dated October 23, 2006, for Good Engineering Practice for the Lucky field Bluesky “A” pool. Sincerely, Signed Gus Gusher Exploitation Engineer
Good Engineering Practice (GEP)Good Engineering Practice (GEP)
example Approval
APPROVAL 06-06-060
THE PROVINCE OF BRITISH COLUMBIA PETROLEUM AND NATURAL GAS ACT
DRILLING AND PRODUCTION REGULATION OIL AND GAS COMMISSION
IN THE MATTER of a Good Engineering Practice (GEP) scheme of Northpoint Energy Ltd. (Northpoint) for producing the Altares field Halfway “B” gas pool without well spacing and target restrictions. NOW, THEREFORE, the Commission, pursuant to Part 8, Division 6, Section 101 of the Drilling and Production Regulation, hereby approves the GEP scheme of Northpoint for drilling wells without spacing and target restrictions, as such scheme is described in an Application from Northpoint to the Commission dated July 27, 2006 and related submissions. This scheme is approved, subject to the conditions herein contained and, in particular: 1. The area of the project shall consist of:
94-A-5: Block D - units 20, 30, 40, 50, 60, 70, 80, 90
94-B-8: Block A - units 11-13, 21-23, 31-33, 41-43, 51-53, 61-63, 71-73, 81-83, 92-95 Block H – units 2-5, 12-15, 22-25, 32-35, 42-45, 52-55 and 62-65.
2. The requirements of Section 10 of the Drilling and Production Regulation are hereby
waived, provided that gas wells within the project area are not completed nearer than 250 m to the sides of the approved project area.
3. The gas wells within the project area may be produced without individual well
allowable restrictions. 4. This approval may be modified or rescinded at a later date if deemed appropriate. _____________________ Doug McKenzie Director Resource Conservation Branch DATED AT the City of Victoria, in the Province of British Columbia, this 10th day of October 2006.
area description
pool specific
waiver of well spacing & targets but 250 m buffer
no production restriction
HornHorn RiverRiver Basin - Basin - Jean Marie GEP areas comparisonJean Marie GEP areas comparison
Montney Play - existing GEP approval areasMontney Play - existing GEP approval areas
depleted or wet reservoir preferred
if hydrocarbon reservoir, injection below water contact
below shallow / near surface aquifers
injection pressure must be below 90% of formation fracture gradient
must control P & NG rights to ¼ section (1 unit)
Water Disposal Well - considerationsWater Disposal Well - considerations
Water DisposalWater Disposal
Application notice posted to OGC website, for possible objections.
Limited “test” injection volume may be approved before / during formal application process.
May dispose of both produced water or recovered fluids from a well completion or workover (includes fracture treatment fluids ie “slick water fracs”).
Challenge to industry – recycle frac water, use saline zones (Debolt) as “water storage”.
proximity to source facility (shorter the pipeline the better)
confinement of the injected gas competent cap rock, effect on rock matrix lateral plume migration
protection of hydrocarbon, mineral and groundwater resources potential to effect nearby wells and future production / drilling in area
equity interests
wellbore integrity – cement, casing, packer, tubing, safety valve
public and environmental safety – air monitoring
must control P & NG rights to full gas spacing area
Acid Gas Disposal Well - considerationsAcid Gas Disposal Well - considerations
Acid Gas DisposalAcid Gas Disposal
WA# Disposal Zone Approval Date
464 WGSI BUBBLES b-19-A/94-G-08 Baldonnel June 27, 1997
7908 BURLINGTON BURNT a-94-A/93-O-08 Baldonnel October 21, 2004
7961 ANADARKO CARIBOU c-04-G/94-G-07 Halfway September 20, 2000
10585 ANADARKO CARIBOU a-A30-G/94-G-07 Debolt March 30, 1998
9637 PC ET AL JEDNEY a-79-J/94-G-01 Baldonnel October 31, 1996
427 PC ET AL JEDNEY b-88-J/94-G-01 Baldonnel October 31, 1996
7979 PC ET AL PARKLAND 15-17-81-15 W6M Basal Kiskatinaw February 22, 2001
10503 BRC HTR ET AL RING d-49-B/94-H-16 Debolt April 6, 2000
5787 CNRL SIKANNI a-32-I/94-G-03 Debolt January 31, 2005
9887 CNRL W STODDART 01-33-87-21 W6M Halfway June 14, 2001
11398 CNRL W STODDART 07-34-87-21 W6M Halfway September 18, 1998
1517 TALISMAN SUKUNKA a-43-B/93-P-05 Pardonet-Baldonnel March 21, 2002
12 wells approved for acid gas disposal
Commingled ProductionCommingled Production
OGC avoids mapping sub-units, removing commingling as an issue.
single Montney, not Upper and Lower
individual well, pool or area based approvals.
Project DataProject Data Reservoir projects (including GEP) data file at;
www.ogc.gov.bc.ca
“Drilling Data for all wells in B.C.” – Excel file
For past Project applications or approvals, contact;
Steven Glover (250) 952-0293
Steven.Glover@gov.bc.ca
OGC has digital shape files for GIS systems, also digitizing pool net pay maps and pool designation areas Lori Miller (250) 261-5713 Lori.Miller@gov.bc.ca
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