Developing and Marketing Gas Technology for

Unconventional Reservoirsby

Stephen A. HolditchTexas A&M University

Outline

• Why do we need technology

• Importance of breakthrough technologies

• Recent trends in technologies

• Global marketing of technology

Why Do We Need Technology?• The easy oil and gas are found early in the

life of a basin• As a basin matures, the oil and gas

reservoirs become more difficult to find and more difficult to produce, due to complex structure and low permeability

• The importance of technology can be explained using a concept called the resource triangle

Resource TriangleConventional - Small volumes that areeasy to develop

UnconventionalLarge volumes that are difficult to develop

Impr

oved

tech

nolo

gy

Incr

ease

d pr

icin

g

Natural Resources• All natural resources are distributed log-normally

in nature• This has been proven true for all resources such

as Gold Zinc DiamondsNickel Silver LeadUranium Oil Gas

• High grade, pure veins or deposits of these resource are rare and small

• Low grade deposits are very large but often uneconomic to produce unless price are high or a breakthrough in technology occurs

• In U.S.A., most wells are being drilled to develop low quality reservoirs onshore, such as - Frontier - Mesa Verde

- Wilcox Lobo - Fruitland Coal

- Cotton Valley - Antrim Shale

• In other mature areas, such as Venezuela, Mexico, Canada, Russia, many of the high quality reservoirs are also developed, and the industry is starting to look at the more difficult reservoirs, lower in the triangle

U.S. Lower-48 Unconventional Gas Production - tcf/year

00.511.522.533.544.55

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

Devonian Shale Coalbed MethaneTight Gas Sands

• Many basins around the world are just now being explored; therefore, reservoirs near the top of the triangle are just being found and developed

• All basins, however, require better technology to increase reserves and profit when oil and gas prices are not increasing

After EconomidesMuch of the following information and

concepts were taken from the following paper:

Economides, M.J.: "The State of R&D in the Petroleum Industry," Distinguished Author Series, JPT (July 1995), 586-588.

Development Cycle of One Specific Technology

Time

Cum

ulat

ive

deve

lopm

ent

of te

chno

logy

Generation

Rapiddevelopment

Maturation

1

2

3

Breakthrough Technologies• Once a technology matures, only

incremental improvement occur as a result of R&D

• To maintain the momentum in technology improvement, we must have periodic breakthroughs in technology

Development of a Technology Group

Cum

ulat

ive

deve

lopm

ent

of d

rillin

g te

chno

logy

Cable tooldrilling

Rotary bitdrilling

Technologyneeds of the

industry

Horizontaldrilling

Time

Development of a Technology Group

Cum

ulat

ive

deve

lopm

ent

of fr

actu

re fl

uid

tech

nolo

gy

Water Fracs

Cross-linkedGels

Technologyneeds of the

industry

NonDamaging

Gels

Time

Technology Developed in USA can be Applied in Other Basins in the World

Time

Cum

ulat

ive

deve

lopm

ent

of te

chno

logy

U.S.A.fields

New basinsin the world

Importance of Research• It is clear that we need research to provide

these breakthrough technologies• Research should not only focus on short

term goals, it should also focus on breakthrough technologies that can make a difference

• In the U.S., our research intensity in oil and gas is not large enough, and getting worse

1993 R&DSpending(Billion $)

ResearchIntensity

(% of Sales)Health Care 13.9 10.6Office Equipment 17.2 8.0Electronics 8.5 5.5Aerospace & Defense 4.2 4.2Chemicals 5.0 4.1Automotive 13.4 4.0Oil, Gas, Coal 2.7 0.8

Recent Trends in Technology

• Use of seismic data

• Horizontal drilling

• Well stimulation

Use of Seismic Data• 3-D seismic is now used routinely to

develop new fields

• 3-D seismic has been used to re-develop many old fields

• 3-D seismic lets us look beneath layers of salt and granite

• 4-D seismic lets us use monitor changes in the reservoir vs. time

Horizontal Drilling• Horizontal drilling has become routine in

many fields

• We often drill multiple laterals

• Wells are often drilled underbalance to minimize damage to formation

• Biggest problems are formation evaluation and stimulation

Top of Zone

HighlyFracturedInterval

Bottom of Zone

Dual Opposed Branches

Stacked Branches

ThinLayers

SandLenses

Horizontal Branches from Vertical Hole

Low PermeablitySand Lenses

Hydraulic Fracture

Vertical Branches From Horizontal Hole

Well Stimulation

We have measurably improved well stimulation methods with the developments in

• 3-D fracture treatment design• Improved fluids• Improved propping agents• Oriented perforating• Real time operations

Micellar Fluids

Surfactant

+NH4Cl

KCl

MgCl2

e.g.,Electrolyte

+ + + + + + + + + + +

+ + + + + + + + + + +

+

+

+

+ + + + + + + + + + +

+ + + + + + + + + + +

+

+

+

+ + + + + + + + + + +

+ + + + + + + + + + +

+

+

+

+ + + + + + + + + + +

+ + + + + + + + + + +

+

+

+

+ ++ +

+ + +

+ + + + + + + + +

+

+ + + + + + + + + + +

+ + + + + + + + + + +

+

+

+

=

Rod/Worm Shaped Micelles

Coil Tubing FracturingSingle or Multiple Fracture Stimulation using Coiled Tubing as a conduit for both the isolation and treatment.

Real Time Operations• Go to the field

• Measure, monitor and record everythingbefore, during and after treatment

• Find and solve problems before treatment

• Monitor fluids and data during treatment

• Flow back well properly

• Conduct detailed post-treatment evaluation

Post-Fracture Evaluation

• Collect and analyze production data

• Evaluate entire process for improvements

• Extend Analysis to Field Evaluation

5000

3000

2000

1000

500

3000 20 40 60 80 100 120

Producing Time, days

DesignForecast

ActualResult

Actual Data230 ft Half-Length300 ft Half-Length

Flow

Rat

e, M

scf/

D

Summary• As we delve deeper into the resource

triangle, the reservoirs we will discover and develop will require better technology

• Getting more oil and gas out of existing reservoirs requires better technology

• To meet the needs of the industry, technology breakthroughs will be required

Summary• The most beneficial improvements in

technology in the past 10 years has been in the areas of

Seismic technology

Horizontal drilling

Well stimulation, and

Deep water/hostile environment development

• In the future, we will continue to pursue better ways to find oil and gas

Using seismic signals

Drilling wells better and cheaper

Evaluating wells using better petrophysical tools, and

Completing wells better using better stimulation methods

Summary• Much of the current technology, especially

for unconventional reservoirs, has been developed in mature basins in the west

• In the coming years, most of the technology for UCR’s will be exported to the areas in the world that are just now starting to develop tight gas, heavy oil, coalbed methane and deep water reservoirs.