5 Petronas Shale Gas Workshop - Engineering Module

Shale Reservoir Engineering
2011 Gaffney, Cline & Associates. All Rights Reserved.
Drilling and Development

The most important factor behind the rapid expansion in
shale gas development has been advances in drilling and
completions technology
Most notable among these are the use of:
(1) horizontal drilling,
(2) light-sand slickwater fracs, and
(3) microseismic
Typical shale wells have lateral well lengths of 5,000 ft or
more with 15 to 20 fracture stages
Typical patterns in a section (640 acres) range from 4
wells (160-acre spacing) to 8 wells (80-acre spacing) with
some pilot projects containing wells spaced at 40 acres
2
Fractured Horizontal Well Schematic
Source: ESG Solutions

3
Completions and Stimulation Design: Multi-Stage

Completion Systems
2010 Baker Hughes Incorporated. All Rights Reserved.
And this is What it Really Looks Like

52,000 HP in the Woodford Shale
Shale Reserves (or Resources) Booking

Same definitional principles and guidelines apply as for
conventional reservoirs
To qualify as Reserves the key requirements must be met
Firm commitment to develop
Reasonable timeframe (five years)
Economic producibility
Etc.
Proved Reserves requires reasonable certainty of
recovery
For SEC purposes, use can be made of reliable
technology, but what does this mean in shales?
Resources Classification
Reserves
Discovered, recoverable, commercial,
remaining
Proved, Probable, Possible
1P, 2P, 3P (now formalized)
Classification
Contingent Resources
Discovered, potentially recoverable, not
yet commercial, remaining
1C, 2C, 3C (new terms)
Equivalent to Low, Best and High Estimates
Prospective Resources
Undiscovered, potentially recoverable,
potentially commercial, remaining
Low, Best and High Estimates
Unrecoverable
Discovered or undiscovered, not
recoverable
Categorization
PRMS Reserves Defined

Reserves are those quantities of
petroleum anticipated to be
commercially recoverable by
application of development projects to
known accumulations from a given date
forward under defined conditions
Reserves must satisfy four criteria
discovered
recoverable
remaining (as of the evaluation date)
commercial
based on the development project(s)
applied
For unconventional formations,
Reserves are typically only attributed

after pilot programs have confirmed the
technical and economic producibility
and after capital is allocated for
development
Critical Factors
1. The extent of the resource (what has been discovered?)
Gas or oil in place
2. Number of wells in each reserves or resources category
How to demonstrate appropriate level of confidence
3. Volume recovery per well
Methods to estimate EUR
Decline analysis
Basic
Advanced
Simulation
Analytical
Numerical
Analogy
9
How Much Has Been Discovered?

Consider spread of wells across acreage
Number, distance apart, types of information available
Information from neighboring leases
Has commerciality been established everywhere?
Short tests or longer term production
Estimates of gas or oil in place
Rock properties free gas
Adsorbed gas
Fluid properties and future behavior
Use as cross-check of recovery efficiency
10
Projecting EUR
If you torture the data long enough, it will confess!
(Ronald Coase, Economist)
Decline analysis
Basic
Advanced
Simulation
Analytical
Numerical
Analogy
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11
Shale Reservoir Analysis

Shale reservoirs require a new/unique approach for analysis
and forecasting as compared to conventional reservoirs
Nanodarcy permeability
Long transient periods
Short production histories mean decline curve analysis has large
uncertainty
Horizontal wells with multi-stage fracturing causes changes in

rock fabric and complicates aerial contribution
Draw down dependent recovery can have geomechanical
effects
An integrated approach is required to plan wells; plan

stimulation; and forecast production over the long term
12
Shale Gas Well Performance

Wells in thermogenic shale gas reservoirs produce at very high
initial rates and decline rapidly
This is due to multiple factors, including a reduction in reservoir
pressure near the wellbore, a reduction in permeability as pore
pressure decreases, and reductions in fracture conductivity
resulting from proppant crushing, proppant embedment, and
fines migration
Because many wells produce more than half of their total gas
within the first two years, drilling must expand continuously to
increase the field gas rate
In shale gas reservoirs dominated by sorbed gas, such as the
Antrim shale, production may be delayed because of
dewatering and more closely-spaced wells may be needed to
accelerate this process
13
Estimation of EUR
Conventional approaches do not work
Decline analysis is commonly used, but has its challenges
Flow regime is different and changes
b factor changes with time, but we dont know how
What is final value that b could reach?
0.5 in homogeneous reservoirs?
1.5 in very heterogeneous reservoirs?
Standard assumptions may be flawed
The well-known Arps plot is more a means of communication than
analysis
There may be alternatives that provide guidance
But perhaps look at several
Analytical and numerical simulation can help

Analogs so useful elsewhere are difficult to justify
The play is the analog to itself (PDPs for PUDs, etc.)
Take geo-mechanics into account

Numerical model with variable permeability function
14
The Unconventional Challenges

How to predict performance for unconventional reservoirs,
especially shale gas wells
How and when to assign reserves
Assimilation of historical data and building of
type curves has drawbacks:
Does not involve natural constraints
Difficult to explain well design effects
Optimization is based on trial and error
Large investments for know-how
Geo-mechanical effects are ignored
Long term predictions are questionable
Not all shale formations are the same!
Type Well
Most critical assumption is often over-simplified
The Problem
Shale reservoir performance
prediction is more complex than more
traditional formations
Conventional theory does not work
Limited history can lead to forecasting
errors
Type curves are widely used and,
potentially, abused
The choice of which type curve to use
depends on a number of factors
including area, permeability-thickness,
lateral length, and completion
effectiveness
What other options are there?
Inconvenient Facts
Flow may be transient for many years
Initial best-fit b will almost always be greater than unity
It will decline with time, but this cannot (yet) be predicted
Some use a terminal decline (or Dmin) to try to prevent
over-estimation of EUR
Does this work?
What should the value be?
Simplified View of Flow Regimes

Shale Gas well performance is influenced by:
Matrix contribution
Extent and intensity of the artificial reservoir (fracking success)
Flow vectors that are perpendicular to fracture planes (linear flow)
Boundary conditions can be affected by fracture closure
Transient flow
Storage
Fractures dominate
Boundary Effects
Semi-Steady state
Geo-mechanical effects
Fluid effects?
Main Regime
Partially linear
Non-Darcy
Forecasting Methodologies
Extrapolation of decline curves
Basic
Arps: exponential, hyperbolic, harmonic, super-hyperbolic
Modified hyperbolic (very common in industry)
Advanced
Stretched Exponential Decline Model (SEDM)
Power-law
Long-duration linear flow
Duong model
We can only use DCA once a well has exhibited decline!
Analytical models
Numerical models
Analogs
Type curves
Arps Decline Formulae

Q = Qi * (1 + b*Di*t)^(-1/b)
Super Hyperbolic,
b = 1.2
Exponential,
b=0
Harmonic,
b=1
Plot from Fekete HarmonySoftware
Can b>1? Yes, during transient flow, infinite-acting linear flow b=2
b declines with time as flow regime changes
Ultimately it is expected that b<1
Modified Hyperbolic
Changes With Additional Data
From analogs?
EUR after 2 yrs = 8.8 Bcf

Plot from Fekete HarmonySoftware
D decreases with time: D = 1 / (1/Di + bt)

Requires constant b, which is not correct in transient flow
Examples of Minimum Terminal Decline
EUR = 22
EUR = 11
EUR = 6.7
EUR = 10
EUR = 7.9
Plot from Fekete Harmony Software
EUR = 8.6
Advanced Decline Methods
Prepare Bracketing Forecasts

Assume continuation of hyperbolic with best-fit b value
This will give a maximum value
Assume that decline continues as exponential with b=0

This will give a minimum value
Calculate decline using SEDM, Power Law and/or Duong

methods
Likely best estimate value
Calculate continued hyperbolic decline but with imposition of

minimum terminal decline
Use a range of Dmin values, based for preference on analogs
Range might be from 2% (optimistic) to 10+% (conservative)
DCA Fit Comparison

(based on average of 10 Barnett wells)
10000
Rate, Mcf/day
1000
100
Duong(a=2.71, m=1.22)
Exp
Hyp (b= 1.25)
10
Dmin = 5%
PLE (n = 0.7)
Historical data(5.5 yrs)
1
0
25
2500
5000
Time, Day
7500
10000
No. of days
30 Yr EUR (Bcf)
Method
b value
Residual
2273
2.79
Exp
b= 0
8.1
2273
4.65
Hyp
b= 1.25
2.3
2273
4.59
Mod Hyp
Dmin = 5%
2.3
2273
3.26
PLE
n= 0.7 Dinf= 1E-06
0.8
2273
3.84
Duong
a=2.71, m=1.22
0.68
New Change in EUR with Time

(based on average of 10 Barnett wells)
After 2 years
After 3 years
Summary Plot (Semi-Log)

q vs. Time, days - All Models
1.E+04

1.E+04
qg, MSCF/day or qo, STB/day
qg_MSCF/day_all
qg_MSCF/day_edited
qg_MSCF/day_(exp)
qg_MSCF/day_(hyper)
qg_MSCF/day_(MH)
qg_MSCF/day_(PLE)
1.E+03
b= 1.75
1.E+02
2,000
After
4 years
1.E+04
4,000
6,000
8,000
Time, days
qg_MSCF/day_ ( Duong)
qg_MSCF/day_(Duong)
qg_MSCF/day_(exp)
qg_MSCF/day_(hyper)
qg_MSCF/day_(MH)
qg_MSCF/day_(PLE)
1.E+03
b= 1.45
1.E+02
6,000
8,000
Time, days
Plots from Stephanie Curie Rate Time Relation spreadsheet

26
qg_MSCF/day_(hyper)
qg_MSCF/day_(MH)
qg_MSCF/day_(PLE)
1.E+03
b= 1.7
1.E+02
10,000
2,000
After
6.5 years
1.E+04
qg_MSCF/day_edited
4,000
qg_MSCF/day_(exp)

qg_MSCF/day_all
2,000
qg_MSCF/day_edited
10,000
qg_MSCF/day_(Duong)
qg_MSCF/day_all
4,000
6,000
8,000
Time, days
10,000

qg_MSCF/day_(Duong)
qg_MSCF/day_all
qg_MSCF/day_edited
qg_MSCF/day_(exp)
qg_MSCF/day_(hyper)
qg_MSCF/day_(MH)
1.E+03
qg_MSCF/day_(PLE)
b= 1.25
1.E+02
2,000
4,000
6,000
8,000
Time, days
10,000
Change in EUR with Time

(Time limit: 30 yr. or Zero Rate)
EUR vs Time
7
Exp
Hyp
Dmin=5%
PLE
Duong
Dmin = 10 %
EUR (Bcf)
1
500
1000
1500
Time (Days)
2000
2500
Method
No. of days
Years
30 Yr EUR(Bcf)
b value
Exp
730.08
2.31
b=0
Exp
1095.12
2.33
b=0
Exp
1460
2.72
b=0
Exp
2372.76
6.5
2.79
b=0
Hyp
730.08
5.6
b= 1.8
Hyp
1095.12
5.33
b=1.7
Hyp
1460
4.96
b= 1.45
Hyp
2372.76
6.5
4.65
b= 1.25
Mod Hyp 730.08
5.34
Dmin = 5%
Mod Hyp 1095.12
5.1
Dmin = 5%
Mod Hyp 1460
4.83
Dmin = 5%
Mod Hyp 2372.76
6.5
4.59
Dmin = 5%
PLE
730.08
3.07
n= 0.75 Dinf= 1E-06
PLE
1095.12
3.1
n= 0.75 Dinf= 1E-06
PLE
1460
3.2
n= 0.75 Dinf= 1E-06
PLE
2372.76
6.5
3.26
n= 0.75 Dinf= 1E-06
Duong
730.08
1095.02
1460
2372.76
2
3
4
6.5
2
3
4
6.5
2.68
2.9
3.35
3.84
4.45
4.28
4.2
4.13
a=1.65m=1.13
a=1.98m=1.17
a=2.14m=1.18
a=2.71m=1.22
Duong
Duong
Duong
Mod Hyp 730.08

Mod Hyp 1095.12
Mod Hyp 1460
Mod Hyp 2372.76
Dmin = 10%
Dmin = 10%
Dmin = 10%
Dmin = 10%
Barnett
Review of Several US Shales
Eagle Ford Shale

Dry Gas Window
69 wells
Barnett Shale
11,000 wells
Marcellus Shale
3 wells (high rate)
5 wells (low rate)
Compare different DCA methods

Historical Data from DIDesktop
Eagle Ford Wells
DCA Comparison After 2.3 Years

1.E+05
Duong
qg_MSCF/day_edited
qg_MSCF/day_(exp)
1.E+04
qg_MSCF/day_(hyper)
qg_MSCF/day_(MH)
1.E+03
qg_MSCF/day_(PLE)
1.E+02
1.E+01
0
30
1,000
2,000
3,000
Time, days
4,000
5,000
No. of days
30 Yr EUR (Bcf)
Method
b value
851
1.96
Exp
b= 0
851
3.92
Hyp
b= 1.45
851
3.83
Mod Hyp
Dmin = 5%
851
3.6
PLE
n= 0.14, Dinf=9.84E-09
851
3.64
Duong
a=1.96, m=1.2
6,000
Forecast Based on Duration of Historical Data
qg, MSCF/day or qo,

STB/day
1.E+05
After 1.5 years

Duong
Duong
qg_MSCF/day_all
qg_MSCF/day_all
qg_MSCF/day_edited
qg_MSCF/day_edited
qg_MSCF/day_(exp)
1.E+04

1.E+05
qg_MSCF/day_(hyper)
qg_MSCF/day_(MH)
qg_MSCF/day_(PLE)
1.E+03
qg, MSCF/day or qo,

STB/day
After 1 years
qg_MSCF/day_(exp)
1.E+04
qg_MSCF/day_(hyper)
qg_MSCF/day_(MH)
qg_MSCF/day_(PLE)
1.E+03
b= 1.9
1.E+02
b= 1.65
1.E+02
0
500
1,000
1,500
2,000
Time, days
2,500
3,000
After 2.33 years

1.E+05
500
1,000
1,500
2,000
Time, days

Duong
qg_MSCF/day_edited
qg_MSCF/day_(exp)
1.E+04
qg_MSCF/day_(hyper)
qg_MSCF/day_(MH)
qg_MSCF/day_(PLE)
1.E+03
b= 1.45
1.E+02
Plots from Stephanie Curie Rate time relation spreadsheet

31
500
1,000
1,500
2,000
Time, days
2,500
3,000
2,500
3,000
Eagle Ford - Change in EUR with Data Availability

Time limit: 30 yrs
EUR vs. Time (Days)

6
EUR (Bcf)
4
Exp
3
Hyp
Mod Hyp
PLE
Duong
0
300
400
500
600
Time (Days)
700
800
900
Barnett Wells
DCA Fit Comparison After 6.4 Years

1.E+05
Duong
qg_MSCF/day_all
qg_MSCF/day_edited
1.E+04
qg_MSCF/day_(exp)
qg_MSCF/day_(hyper)
qg_MSCF/day_(MH)
qg_MSCF/day_(PLE)
1.E+03
1.E+02
1.E+01
0
34
1,000
2,000
3,000
Time, days
4,000
5,000
No. of days
30 Yr EUR (Bcf)
Method
b value
2343
1.93
Exp
b= 0
2343
2.25
Hyp
b= 1.61
2343
2.17
Mod Hyp
Dmin = 5%
2343
2.19
PLE
n= 0.13, Dinf=9.84E-09
2343
2.16
Duong
a=0.88, m=1.08
6,000
Forecast Based on Duration of Historical Data

1.E+05
Duong
qg_MSCF/day_all
qg_MSCF/day_edited
1.E+04
qg_MSCF/day_(exp)
qg_MSCF/day_(hyper)
qg_MSCF/day_(MH)
qg_MSCF/day_(PLE)
1.E+03
qg_MSCF/day_(exp)
qg_MSCF/day_(hyper)
qg_MSCF/day_(MH)
qg_MSCF/day_(PLE)
1.E+03
b= 1.65
1.E+02
b= 1.65
1.E+02
1.E+01
1.E+01
0
1,000
2,000
After 4.5 years q
1.E+05

qg_MSCF/day_all
qg_MSCF/day_edited
1.E+04
After 3 years
Duong
After 1 years
3,000
4,000
Time, days
5,000
6,000
1.E+05
2,000
3,000
4,000
Time, days
5,000
Duong
qg_MSCF/day_all
qg_MSCF/day_edited
1.E+04
qg_MSCF/day_(hyper)
qg_MSCF/day_(MH)
qg_MSCF/day_(PLE)
qg_MSCF/day_(exp)
qg_MSCF/day_(hyper)
qg_MSCF/day_(MH)
qg_MSCF/day_(PLE)
1.E+03
b= 1.65
1.E+02
6,000

qg_MSCF/day_all
qg_MSCF/day_(exp)
1.E+03
1,000
Duong
qg_MSCF/day_edited
1.E+04
After 6.4 years

vs. Time, days - All Models
1.E+05
b= 1.61
1.E+02
1.E+01
1.E+01
0
1,000
2,000
3,000
4,000
Time, days
Plots from Stephanie Curie Rate time relation spreadsheet

35
5,000
6,000
1,000
2,000
3,000
4,000
Time, days
5,000
6,000
Barnett - Change in EUR with Data Availability

Time limit: 30 yrs
EUR vs. Time (Days)
2.5
EUR (Bcf)
1.5
Exp
Hyp
Mod Hyp
1
PLE
Duong
0.5
0
300
800
1300
1800
Time (Days)
2300
2800
A Smaller Set of Barnett Wells (30)

EUR vs Time
7
Exp
Hyp
Dmin=5%
PLE
Duong
Dmin = 10 %
EUR (Bcf)
1
500
1000
1500
Time (Days)
2000
2500
Marcellus
3 High-Rate Wells
5 Low-Rate Wells
DCA Fit Comparison- Marcellus

1.E+05
Duong
Three
High-Rate
Wells
qg_MSCF/day_all
qg_MSCF/day_edited
qg_MSCF/day_(exp)
1.E+04
qg_MSCF/day_(hyper)
qg_MSCF/day_(MH)
qg_MSCF/day_(PLE)
1.E+03
1.E+02
0
500
1,000
1,500
Time, days
2,000
2,500
3,000

1.E+05
Duong
Five LowRate
Wells
39
qg_MSCF/day_all
qg_MSCF/day_edited
1.E+04
qg_MSCF/day_(exp)
qg_MSCF/day_(hyper)
qg_MSCF/day_(MH)
qg_MSCF/day_(PLE)
1.E+03
1.E+02
1.E+01
0
500
1,000
1,500
Time, days
2,000
2,500
3,000
Marcellus - Change in EUR with Data Availability

Time limit: 30 yrs
Three High-Rate Wells
Five Low-Rate Wells
EUR VS. Time (Days)
EUR VS. Time (Days)
0.25
0.2
Exp
Hyp
3
Mod Hyp
PLE
Duong
EUR (Bcf)
EUR (Bcf)
5
0.15
Exp
Hyp
Mod Hyp
0.1
PLE
Duong
0.05
1
0
0
300
400
500
Time (Days)
600
700
300
500
700
900
Time (Days)
1100
Predicting Shale Performance is Challenging

Formation description requires special attention
Regional and local trends should be understood
Ro, rock mechanics, stresses, TOC, and mineralogy are key
factors in shale plays
Matrix properties are difficult to measure in logs
Coring is essential to understand shale reservoirs
Natural fractures are difficult to quantify
Conventional reservoir engineering tools dont always
apply
In-place and recoverable volumes do not correlate
Recoverable volumes more closely associated with exploitation
methods
Material balance approach does not apply

Flow is not directly related to pressure difference
The effect of natural fractures is often misunderstood
DCA especially in the short term is uncertain
Massive hydraulic stimulation creates an artificial reservoir; the

bounds and quality of which need to be understood
Most Common Approach: Analogy and Statistics

In-Place
Description
Statistical
Analysis and
Type Wells
Assimilation of historical data and building of

type curves has drawbacks:
Performance
Type Well
Most critical assumption is often over-simplified
Does not involve natural constraints

Difficult to explain well design effects
Optimization is based on trial and error
Large investments for know-how
Geo-mechanical effects are ignored
Long term predictions are questionable
All shale formations are NOT the same!

Source - 2010 Responsible Drilling Alliance
Reservoir Simulation
Model components
Geological description
Recovery process
Flow through matrix
Desorption
Geomechanics
Fracture hydraulics
Well hydraulics
Surface facility integration
Goals
Performance models
Development priorities
Adjustment to regional parameters
Integrated development plan
43
Model Process
Individual completions
Wells
Production modules
Field
Regional
Drawdown, psi
Shale Engineering
Advanced Reservoir Engineering for Shales
In-Place
Description
Shale
Engineering
Shale Engineering Modeling

Based on geo-mechanics
Implements physical shale properties
Describes properties of the induced
reservoir after stimulation
Matches observed performance
Interprets and implements micro-seismic
Optimizes well design and field
development
Provides early predictions of long term
production behavior
Performance
Fitting Challenges
Forecast Uncertainties
2,500
Surface pressure
restrictions
Interaction with other
wells or formations
through natural
fractures
Fluid
unloading
1,500
1,250
1,000
200
300
Line pressure
restriction
200
150
100
750
500
100
50
250
0
2010-1
2010-4
2010-7
2010-10
Time (Date)
45
2011-1
2011-4
2011-7
Water Rate SC (bbl/day)
Fluid unloading
1,750
400
Gas Rate SC, Model

Well Head Pressure, Model
2,000
Gas Rate SC (MSCF/day)
Initial trends can be

influenced by:
250
Well Head Pressure (psi)
Gas Rate SC, Historical

Well Head Pressure, Historical
Water Rate SC, Model
2,250
500
Shale Model Description
Proppant
concentration,
distance relation
Extension of the
wellbore
NATURAL
Dual Permeability formulation
Fracture spacing, stress
anisotropy
Proppant
placement
Natural fractures
Matrix
INDUCED
MINOR
NATURAL
Non-Darcy flow
Gas Desorption
46
Stimulated Rock
Volume (SRV)
INDUCED
MAJOR
Induced permeability
domain
Pore pressurepermeability relation
From Natural Shale to the Artificial Reservoir

Logs and core
In situ stress
determination
Microseismic Re-processing
Geomechanical
Natural Fracture
Permeability
Flow Model
Analysis
Benefits
Enhancing reservoir understanding
Exploiting modern technology
Modeling Objectives
Based on SPE 146912
SRV description related to hydrofrac (model A)

Long term well performance (model B)
Model A
Induced
permeability
Proppant
conductivity
Model B
Modeling Approach
Model Attributes
Flow tied to geomechanics through
dilation-compaction tables
Compositional formulation
Gas desorption
Non-Darcy matrix flow
A. Fracture propagation model
B. Full well model
Models fracture propagation
Models long term production
Fine grid (models Minutes)
Coarse grid (models Decades)
Stimulation and backflow timeframe
Uses SRV attributes from model A
Matches frac and microseismic surveillance
Adjusts frac stage contribution to PLT

Outputs stimulated rock volume (SRV) permeability measurements
Adjusted to historical production rates and
pressures
Provides Long production forecast
Model A Gridding
Stimulated Reservoir Volume (SRV)
s max
Calculated
Permeability
Welbore node
sH
Wellbore
50
Model B Gridding
Proppant
nodes
s max
Stimulated Reservoir Volume (SRV)
Welbore node
Full well model
sH
Wellbore
51
Full Model Results

Matched production history and production logging
Frac stage contribution

match
Proppant placement match
Pressure Drop, psi
2,500
1,000
2,000
800
1,500
600
1,000
400
500
200
0
2010-1
2010-7
2011-1
Time (Date)
2011-7
2012-1
2012-7
W ell Head Press ure (psi)
Gas Rate SC (M SCF/day)
Well History match
A Real Shale Engineering Application
Rates measured by PLT five months later
Micro-seismic events do not necessarily relate to production response

Do all micro-seismic events relate to fluid presence?
Production seems dependent on natural fractures
Modeling Workflow
Input Data
Petrophysical
analysis
Model A:
Fracture
propagation
Match Parameters
Frac Treatment
Data
Micro-seismic
Geomechanical
analysis
Model B:
Full Well Model
Flow-back
Geological
Model
Facility Design
Regional
Trends
54
Mini-frac
Multi-Well:
Pad Model
Analytical :
Play Evaluation
Production
Logging
Well rates and

Pressures
Can Statistics Help?

SPEE Monograph 3
Identify a resource play
Repeatable statistical distribution of EUR

Offset well performance is not a reliable predictor
Continuous hydrocarbon system exists
Free hydrocarbons not held in place by hydrodynamics
Select analogous wells and create statistical distribution for analysis

Work with randomly selected anchor wells and test set wells
Analyze increasing areas around anchor wells until test set wells show different
distribution
Determine number of opportunities (the project)
Carry out Monte Carlo simulation for undrilled locations and assign appropriate
category
But always consider the geology!
55
A Final Check - Recovery Efficiency

What is Reasonable?
Recovery factors are typically much lower in shale formations
Each formation is different
Depends also on well spacing and completion
Lateral length and number, size and spacing of fracs
What is the drainage area?
Depends entirely on permeability
Nano-Darcy vs. micro-Darcy makes a large difference
Does micro-seismic provide quantitative or only qualitative information?
Use mini-frac to estimate initial pressure and permeability

1-2 bbl/min for 5 minutes, then fall-off (fracture closure in 3-12
hours)
Gas
Perhaps 25% to 50%
But what about NGLs and changing yield?
Liquid drop out considerations (e.g. Eagle Ford condensate
window)
56
Recovery Factors
Calculating recoverable reserves requires understanding of recovery factors
How can we quantify a recovery factor?
The EIAs World Shale Gas Report divides plays into:
35%
30%
25%
20%
15%
Exceptional
Favourable
Average
Less Favourable
Least Favourable
Established high
rates of well
performance
Low clay content; low

to moderate geologic
complexity; overpressured shale
formation; high gasfilled porosity
Medium clay content;

moderate geologic
complexity; average
reservoir pressure
and properties
Medium to high clay

content; moderate to
high geologic
complexity; below
average reservoir
properties
Severe underpressure and

reservoir complexity
Higher RFs may be achievable, but realistic estimates must be based on
what is being achieved with current technology

But what about NGLs and changing yield?
Quantitative contribution and timing of adsorbed gas?
Shale Engineering Implementation

Integrated Team Deployment
Shale Engineering
From Rock to the Bank
Formation
Evaluation
Consulting
Appraisal
Fracturing
Fracture
Modeling
Monitoring
Geomechanics
Software
Planning
Completions
Microseismic
interpretation
Reservoir
Modeling
58
Drilling
Strategic
Planning,
Resource
Booking
Evaluation
Operations
Implementation
What we cover and where we can go

Formation evaluation
Microseismic processing
Frac point completions
Geomechanics
Reservoir modeling
Evaluation and Strategy
.other specialists
Reduce
Uncertainty
59
Increase
Production
I.
II.
III.
IV.
V.
VI.
Screening studies
Pilot program designs
Streamlined monitoring
Master plan evaluation
Integrated operations
Process optimization
Accelerate
Development
Reduce
Costs

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Shale Reservoir Engineering

2011 Gaffney, Cline & Associates. All Rights Reserved.

Drilling and Development

2011 Gaffney, Cline & Associates. All Rights Reserved.

Fractured Horizontal Well Schematic

Source: ESG Solutions

2011 Gaffney, Cline & Associates. All Rights Reserved.

Completions and Stimulation Design: Multi-Stage

2010 Baker Hughes Incorporated. All Rights Reserved.

And this is What it Really Looks Like

2012 Gaffney, Cline & Associates. All Rights Reserved.

Shale Reserves (or Resources) Booking

2011 Gaffney, Cline & Associates. All Rights Reserved.

PRMS Reserves Defined

For unconventional formations,

Reserves are typically only attributed

2011 Gaffney, Cline & Associates. All Rights Reserved.

How Much Has Been Discovered?

2011 Gaffney, Cline & Associates. All Rights Reserved.

Shale Reservoir Analysis

Horizontal wells with multi-stage fracturing causes changes in

An integrated approach is required to plan wells; plan

Shale Gas Well Performance

2011 Gaffney, Cline & Associates. All Rights Reserved.

Standard assumptions may be flawed

The well-known Arps plot is more a means of communication than

Analytical and numerical simulation can help

Take geo-mechanics into account

2011 Gaffney, Cline & Associates. All Rights Reserved.

The Unconventional Challenges

Does not involve natural constraints

Difficult to explain well design effects

Optimization is based on trial and error

Large investments for know-how

Geo-mechanical effects are ignored

Long term predictions are questionable

Not all shale formations are the same!

Simplified View of Flow Regimes

Arps Decline Formulae

Plot from Fekete HarmonySoftware

EUR after 2 yrs = 8.8 Bcf

Plot from Fekete HarmonySoftware

D decreases with time: D = 1 / (1/Di + bt)

Examples of Minimum Terminal Decline

Advanced Decline Methods

Prepare Bracketing Forecasts

Assume that decline continues as exponential with b=0

Calculate decline using SEDM, Power Law and/or Duong

Calculate continued hyperbolic decline but with imposition of

DCA Fit Comparison

n= 0.7 Dinf= 1E-06

New Change in EUR with Time

Summary Plot (Semi-Log)

Summary Plot (Semi-Log)

qg, MSCF/day or qo, STB/day

qg, MSCF/day or qo, STB/day

Plots from Stephanie Curie Rate Time Relation spreadsheet

qg, MSCF/day or qo, STB/day

Summary Plot (Semi-Log)

Summary Plot (Semi-Log)