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SPE 135555: Shale Gas

Production Decline Trend


Comparison over Time and
Basins

Jason Baihly, Raphael Altman, Raj


Malpani & Fang Luo, Schlumberger

Overview

Objectives
Motivation
Formations Analyzed
Methodology
Horizontal Shale Basin Results
Vertical to Horizontal Well Comparison
Sandstone and Shale Horizontal Well Comparison
Economic Analysis
Conclusions

Objectives
Examine production trends in horizontal shale gas wells

over time in a given basin


Compare the production profiles between shale basins
Compare historical production of vertical and horizontal
Barnett Shale wells
Compare the production profiles of horizontal tight gas
sandstone and shale formations
Perform a basic economic analysis of the
average shale basin horizontal well

Motivation
Disagreement within the industry in shale plays over
Long term viability

Decline trends
Time to abandonment rate
EUR
Resultant economics

Formations Selected for Analysis


Niobrara
& Baxter

Excello/Mulky
Gammon
Bakken
New Albany
Antrim

Green
River
Cane
Creek

Marcellus
& Huron

Monterey

McClure
Lewis &
Mancos

Floyd &
Conasagua

Thirteen
Finger
Barnett &
Woodford

Barnett
Eagleford
Woodford

Caney &
Woodford
Bossier &
Haynesville

Fayetteville

Methodology for Production Analysis


Core area was chosen in each shale basin based
upon

Limit the number of wells for analysis


Perform proper QA/QC on a well by well basis

Wells not on the periphery of the play


Horizontal wells drilled since the inception of the basin
Better producing area in the play

Eagle Ford gas area was analyzed and due to low


well count, the entire play was analyzed
Hundreds of horizontal wells chosen in each play
Each play was analyzed individually

Methodology for Production Analysis


Monthly production broken down into daily rates
All wells not exhibiting a normal decline trend were

excluded
Wells were grouped by date of first production
Data sets with less than eight wells were ignored
Wells falling an order of magnitude or more outside of the
trend were scrutinized further
Data normalization

Shift all well production data to a specific time zero

Once the well count fell drastically, the analysis was


stopped

Data Quality Control


BARNETT DOFP
2007

Number of
Producing
Wells
Gas
Production
Rate (MSCF/D)

Sudden drop in
well count
representing
wells that started
production in
latter stages of
2007

Number of Wells Analyzed


Case
Barnett
Fayetteville
Woodford
Haynesville
Eagle Ford

Total Wells
#
731
467
305
275
59

Forecast Method
Decline curve analysis (DCA)
Determine Arps b exponent from regression of
historical production data for each group

Forecast analysis
Formulate a production type curve for each shale
gas basin from DCA

Barnett Shale
Maximum Time Decline Trend
Barnett Shale

2500

DOFP_2003 (25 Wells)

Gas Production Rate (MSCF/D)

DOFP_2004 (68 Wells)


DOFP_2005 (129 Wells)

2000

DOFP_2006 (107 Wells)


DOFP_2007 (168 Wells)

1500

DOFP_2008 (218 Wells)


DOFP_2009 (123 Wells)

1000

500

0
0

12

24

36

48

TimeN (months)

60

72

84

Barnett Shale Summary


2500

IPs and decline trends

2000

are similar over time

1500

Open natural fractures


Low stress anisotropy
Pipeline capacity maxed
out

DOFP_2003 (25 Wells)


DOFP_2004 (68 Wells)
DOFP_2005 (129 Wells)
DOFP_2006 (107 Wells)
DOFP_2007 (168 Wells)
DOFP_2008 (218 Wells)
DOFP_2009 (123 Wells)

1000
500
0

12

24

36

48

60

Wells are not interfering with one another


Some wells have fracd into one another

Increasing from two to six frac stages over time


Proppant per stage decreasing as number of stages

increased
One study found that proppant amount
correlated well to production results

72

84

Fayetteville Shale
Maximum Time Decline Trend
Fayetteville Shale

Gas Production Rate (MSCF/D)

3000

DOFP_2005 (8 Wells)
DOFP_2006 (53 Wells)

2500

DOFP_2007 (118 Wells)


DOFP_2008 (173 Wells)

2000

DOFP_2009 (115 Wells)

1500
1000
500
0
0

12

24

36

TimeN (months)

48

60

Fayetteville Shale Summary


3000

IPs and production


increase over time

2500
2000

DOFP_2005 (8 Wells)
DOFP_2006 (53 Wells)
DOFP_2007 (118 Wells)
DOFP_2008 (173 Wells)
DOFP_2009 (115 Wells)

1500

Lateral length increased 1000

from 1,800 to 4,300 ft


500
Frac stages per lateral
0
0
12
24
went from 3-4 to 6-8
Fluid volume per lateral has doubled
Proppant amount per lateral has tripled

have
36

48

Production decline trends are fairly parallel over time


Increase in production appears to be sustained

60

Woodford Shale
Maximum Time Decline Trend
Woodford Shale

Gas Production Rate (MSCF/D)

4000

DOFP_2006 (32 Wells)

3500

DOFP_2007 (90 Wells)

3000

DOFP_2008 (127 Wells)

2500

DOFP_2009 (56 Wells)

2000
1500
1000
500
0
0

12

24

TimeN (months)

36

48

Woodford Shale Summary


4000

DOFP_2006 (32 Wells)

3500

IPs and production


increase over time

Lateral length increased

DOFP_2007 (90 Wells)

3000

DOFP_2008 (127 Wells)

2500

DOFP_2009 (56 Wells)

2000
1500

from

1,800 to 4,800 ft
1000
500
Frac stages per lateral
0
went from 3 to 10
0
12
24
Fluid volume has increased, but not proportionately
Proppant amount per lateral has remained constant

Production decline trends are somewhat parallel

over time
Increase in production may be sustained, more
production is needed
Decline profile similar to the Fayetteville

36

48

Haynesville Shale Maximum Time


Decline Trend
Haynesville Shale

Gas Production Rate (MSCF/D)

10000
9000

DOFP_2008 (37 Wells)

8000

DOFP_2009 (238 Wells)

7000
6000
5000
4000
3000
2000
1000
0
0

12

24

TimeN (months)

36

Haynesville Shale Summary


10000
9000

IPs have increased by

8000
7000

18% year on year

6000

Completion trends have

4000

DOFP_2008 (37 Wells)


DOFP_2009 (238 Wells)

5000

3000
rapidly evolved
2000
Lateral length increased 1000
from
0
2,200 to 4,800 ft
0
12
24
Frac stages per lateral increased from 6 to 14
Stimulation volumes have increased proportionately to
the number of stages
Fluid volume per stage ~12,000 bbl
Proppant amount per stage ~300,000 lbs

Production decline trends are fairly parallel


over a short timeframe

36

Eagle Ford Shale Decline Trend


Eagle Ford Shale
Gas Production Rate (MSCF/D)

5000
4500

DOFP_2009 (46 Wells)

4000
3500
3000
2500
2000
1500
1000
500
0
0

TimeN (months)

10

11

12

Eagle Ford Shale Summary


5000
4500

IP is second highest

DOFP_2009 (46 Wells)

4000
3500

over shale plays analyzed 3000


2500

Lateral length is ~5,000 ft 2000


Frac stages per lateral 1500
1000

are 12 to 14
500
0
Frac designs are
0
1
2
3
comparable to the Haynesville Shale

More time needed to perform additional analysis

10

11 12

2009 DOFP Inter Shale Basin Comparison


DOFP 2009 Inter - Shale Basin
Comparison

Gas Production Rate (MSCF/D)

10000

Barnett (123 Wells)

9000

Eagle Ford (59 Wells)

8000

Fayetteville (115 Wells)

7000

Haynesville (238 Wells)

6000

Woodford (56 Wells)

5000
4000
3000
2000
1000
0
0

10

TimeN (months)

12

14

16

Absolute Gas Production Rate for Barnett


Horizontal and Vertical Wells
2500

Barnett Horizontal
Barnett Horizontal (Forecast)
Barnett Vertical
Barnett Vertical (Forecast)

Production Rate, MScf/day

2000

1500

1000

500

0
0

60

120

180
Time, Months

240

300

360

IP-Normalized Gas Production Rate for


Barnett Shale Horizontal and Vertical Wells

Normalized Production Rate

Barnett Horizontal
Barnett Horizontal (Forecast)
Barnett Vertical
Barnett Vertical (Forecast)

0.8

0.6

0.4

0.2

60

120

180
Time, Months

240

300

360

Overlay of IP-Normalized Production Type


Curves for Horizontal and Vertical Sandstones
1

Cotton Valley Horizontal


Cotton Valley (Forecast)
Cleveland Horizontal
Cleveland (Forecast)
Cotton Valley Vertical
Cleveland Vertical

Normalized Production Rate

0.8

0.6

0.4

0.2

0
0

12

24

36
Time, Months

48

60

Overlay of IP-Normalized Production Type


Curves for Horizontal Sandstone and Shale Plays
1

Barnett
Fayetteville
Fayetteville (Forecast)
Woodford
Woodford (Forecast)
Haynesville
Haynesville (Forecast)
Eagle Ford
Eagle Ford (Forecast)
Cotton Valley Horizontal
Cotton Valley (Forecast)
Cleveland Horizontal
Cleveland (Forecast)

Normalized Production Rate

0.8

0.6

0.4

0.2

0
0

12

24

36
Time, Months

48

60

Overlay of Absolute Production Type Curves for


Horizontal Sandstone and Shale Plays

Production Rate, MScf/day

5000

Barnett Horizontal
Barnett (Forecast)
Fayetteville
Fayetteville (Forecast)
Woodford
Woodford (Forecast)
Haynesville
Haynesville (Forecast)
Eagle Ford
Eagle Ford (Forecast)
Cotton Valley Horizontal
Cotton Valley (Forecast)
Cleveland Horizontal

4000

3000

2000

1000

0
0

12

24
36
Time, Months

48

60

Comparison of DCA for Various Plays


Case
Barnett
Fayetteville
Woodford
Haynesville
Eagle Ford
Cotton Valley
Cleveland
Cotton Valley (1980)
Cleveland (1980s)
Cotton Valley (>2005)
Barnett (1980s)

Reservoir Type

Well Type

Shale Gas
Horizontal

Tight Gas
Sandstone
Vertical
Shale Gas

b
1.5933
0.6377
0.8436
1.1852
1.6940
0.7259
1.0000
1.2778
2.3483
1.0000
1.9366

Current Cumulative
Gas Production
MMScf
1,415
883
996
1,740
548
1,341
478
2,703
476
469
389

Economic Inputs
Play
Barnett
Fayetteville
Woodford
Haynesville
Eagle Ford

Well Cost Royalty Operating Cost


$ MM
%
$/MScf
3
2.8
6.7
8
5.8

22
17
19
25
25

0.7
1.1
1.2
2.5
1.5

Economic and Production Results


Case
Barnett_DOFP_2008
Barnett_DOFP_2009
Fayetteville_DOFP_2008
Fayetteville_DOFP_2009
Woodford_DOFP_2008
Woodford_DOFP_2009
Haynesville_DOFP_2008
Haynesville_DOFP_2009
Eagle Ford_DOFP_2009
Cotton Valley_Horizontal

Before Tax @ $4/MScf


DPI @ 0% DPI @ 10% DPI @ 15% ROR, %
2.11
1.11
0.92
12.6
2.09
1.1
0.92
12.3
1.95
1.15
0.99
14.7
2.69
1.43
1.19
22.1
0.71
0.42
0.37
0
0.94
0.53
0.45
0
0.29
0.19
0.16
0
0.38
0.24
0.21
0
0.83
0.45
0.38
0
0.92
0.69
0.64
0

EUR, Bcf
2.895
2.867
2.463
3.401
2.544
3.389
4.579
6.092
3.793
2.036

Economic Break Even Price


Case

Barnett_DOFP_2008
Barnett_DOFP_2009
Fayetteville_DOFP_2008
Fayetteville_DOFP_2009
Woodford_DOFP_2008
Woodford_DOFP_2009
Haynesville_DOFP_2008
Haynesville_DOFP_2009
Eagle Ford_DOFP_2009

EUR, Bcf Gas Price (DPI @ 10% =1)


(USD)

2.895
2.867
2.463
3.401
2.544
3.389
4.579
6.092
3.793

$3.70
$3.74
$3.65
$3.20
$7.35
$6.22
$6.95
$6.10
$6.24

Conclusions
Haynesville IP > Eagle Ford IP > Woodford IP >
Fayetteville IP > Barnett IP

Haynesville Shale IP is considerably higher than other


Shales due to

Higher reservoir pressure


Aggressive drilling and completion approach
Production increased with time across all shale gas
basins analyzed

Barnett Shale is the exception


Due to improvements in drilling, completion practices,
stimulation designs, and knowledge gain over time

Cotton Valley Sand has the steepest decline


over time of all formations analyzed

Conclusions
Barnett Shale had a flatter production decline trend
Barnett would not serve as an analog shale play for
estimating production declines in other shale gas plays
Could be due to natural fractures, curvature, and stress
Vertical and horizontal wells exhibit similar decline profiles
during first 2 years of production

b exponents greater than 1.0 are realistic in

unconventional gas reservoirs


Economics in our study areas

Barnett and Fayetteville are economical @ $4/MScf gas


price at 10% discount rate
Haynesville, Eagle Ford, and Woodford are
economical @ >$6/MScf at 10% discount rate

SPE 135555: Shale Gas


Production Decline Trend
Comparison over Time and
Basins

Jason Baihly, Raphael Altman, Raj


Malpani & Fang Luo, Schlumberger