02 Basics of Shale Plays Shale Basins

Shale Gas Evaluation Finding
Production Sweet Spots
Shale Basics
Agenda
Day #1, Morning (Introduction)

1. What are Unconventional Reservoirs, how do they differ from
Conventional Reservoirs and why are they important?
2. Overview of Shale Basics
A. The Shale Production Control Matrix
B. The Shale Operating Cycle
C. Review of Selected Major Shale Plays
3. Main geologic considerations for their evaluation.
A. Basin Scale Considerations
B. Localized Operating Area Considerations
1 Copyright 2001-2011 NExT. All rights reserved
Overview of Shale Basics
Why Study Shales?

Shales have been studied for decades by geoscientists.
However, these studies have almost exclusively focused on shales from the
perspectives of source rocks and seals.
Only during the last few years has the industry studied shales as reservoirs.
Prior to this, during the onset of the recently shale boom, many operating
companies believed that there was no need to study shales.
It was often heard that A shale was a shale was a shale, meaning,
Shales were homogeneous.
Shales are easy to understand.
Shale reservoir produced the same everywhere.
Why bother to study them.
Why Study Shales?

This thought process resulted in the
development of the initial drilling practices
used during the early years of shale
reservoir development.
This is referred to as the Statistical Drill
Approach.
In a Statistical Drill Approach a large
number of horizontal boreholes are drilled
across the area in a regular pattern and
completed the same way.
This results in a large number of poor
producers and a few good producers.
Why Study Shales?

This Statistical Drill Approach is costly
due to the large number of horizontal
borehole that must be drilled and the
large number of completions that must be
performed.
This No study needed approach to
developing shale reservoirs results in
marginal economics in some shale plays
but not in others.
Only one well out of many has good
enough production to pay for the multiple
poor producers and result in some profit.

Why Study Shales?

After a few years of production many
operators began to realized that A shale
is a shale is a shale was not true.
Significant variations in production
indicated that shale were, in fact,
heterogeneous.
complex in nature.
highly variable producers.
Must be studied in order to drill and
complete them successfully.

The Shale Production Control Matrix
Good Reservoir / Poor Good Reservoir / Good

Reservoir Quality
Completion Completion
(increasing)
Poor Reservoir / Poor Poor Reservoir / Good

Completion Quality
(more effective)
The Shale Production Control Matrix
Good Reservoir / Poor Good Reservoir / Good

Reservoir Quality
Poor Production Good Production

(increasing)
Poor Reservoir / Poor Poor Reservoir / Good

Very Poor Production Poor Production
Completion Quality
(more effective)
Whats needed to Identify the Best Shale Reservoirs

A thorough understanding of the geologic characteristics of all
reservoirs, including unconventional reservoirs, is required in order to
identify the best shales and locate their Production Sweet Spots
This is obtained through Then, for Completions, add in
Geoscience Engineering
Geology Reservoir Engineering
Geophysics Completion Engineering
Geochemistry Drilling Engineering
Geomechanics

Generally, this understanding relates to
Geology Reservoir Eng.
Geophysics Completion Eng.
Geochemistry Drilling Eng.
Geomechanics
Reservoir Quality Completion Quality
Two separate but interlocked components

An understanding of reservoir quality must be obtained by studying at

Regional (Basin) Level
Geoscience
Geology
Geophysics
Geochemistry
Geomechanics Local (Stratigraphic) Level
Reservoir Quality

Completion Quality
Geology Reservoir Eng.
Geophysics Completion Eng.
Geochemistry Drilling Eng.
Geomechanics
Reservoir Quality Completion Quality
Completion quality will be discussed only briefly during this course.

Agenda

Overview of Shale Basics - The Shale Operating Cycle
Copyright 2001-2011 NExT. All rights reserved



Management decision is made to invest

in shale reservoirs in a specific area.
Exploration phase begins.
Basins are identified and located.
Potential shale reservoirs within these basins identified.
Data on shale geochemistry is collected and input into score cards.
Shales are compared and the best potential reservoirs identified.
Data on basin structure / stratigraphy is collected. (Seismic, wells, etc.)
Basin structural framework is developed and used in basin evaluation.
High TOC / thermally mature Regional Sweet Spots are identified.

Pilot project areas are

selected within the
Sweet Spots.
3D seismic is acquired /
interpreted over these.
Seismic-based fracture detection methods performed and Localized
Sweet Spots identified .
Vertical wells are located and drilled within Localized Sweet Spots.
Log and core data is collected and reservoir parameters determined.
Geochemical / Petrophysical analysis confirms Regional Sweet Spot
and establishes shales mineral profile.
Potential completion
barriers identified and
an optimum lateral
stratigraphic landing
point is selected.
Geomechanical analysis is performed and the optimum lateral
orientation is determined.
Potential completion treatments are modeled and optimum
parameters determined.
Static and dynamic modeling predict reservoir performance and
perforation spacing determined. The Theoretical
Production Model


Geologic Analysis
IfTheoretical
validated,
the test fails, Seismic
Production
operations Model
move into Analysis
another model is
developed during Pilot
Static Model
the
PhaseFactory
developedand andmode
tested
Construction
phase using the

during Appraisal
tested.
Production
Phase. Model. Stimulation Reservoir
Monitoring Simulation
Reservoir Model
Stimulation Planning

Vertical pilot wells are

whipstocked and
horizontal boreholes drilled as planned.
Data is collected and completions performed.
Micro-seismic monitoring is performed during completions and
compared with completion models developed during Pilot Phase.
Drilling, completion and production results are used to fine tune the
Theoretical Production Model finalized Production Model.




Do Production Sweet Spots Really Exist in Shales?
Barnett Shale Study

Best 12 month
production map shows
significant variation in
production.
Red is best production,
approx. 500 MMScf
Purple is poorest
production, 50 MMScf.
Source: SPE 138427, Baihly, 2010.

Continuous Cycle
within a Shale Play

Exploration

Exploration and a Fields Lifecycle
Rank Exploration Traditional Development Production

(Pathfinding) Exploration (Green Field Phase) (Brown Field Phase)
Play Concept Increasing Reservoir
Development Understanding Production
Key Element of Fields Mechanisms
Field Structure and Fully
Reconnaissance
Stratigraphy Understood.
Basin Architecture
Investigation Decreasing No Significant
Discovered Uncertainty in Additional
Lead Area Reservoir Geoscience
Definition Controls Knowledge
Prospect Required
Generation


Development Understanding Production
Key Element of Fields Mechanisms
Primarily
Reconnaissancepassive 2D Seismic
Field Structure and
Primarily Fully
active
methods use due to the EM Stratigraphymethods Understood.
used due
Basin Architecture
large areas that need to Basin Analysis to the detail needed
Investigation Decreasing No Significant
be investigated. Uncertainty toin resolve targets.
Additional
Lead Area Discovered
Remote Sensing Reservoir 3D Seismic Geoscience
GravityDefinition Controls Knowledge
Magnetics Prospect Required
Generation


Development
Primarily active Seismic volume
Understanding Production
methods use due to interpretation of Fields Mechanisms
Key Element
the detail needed to adjusted Field as more
Structure and
Reconnaissance Fully
No
characterize well control Stratigraphy Understood.
Basin Architecture additional
reservoir. becomes available
Decreasing data
No Significant
Investigation
3D Seismic (sonic & density
Discovered Uncertainty in Additional
acquired.
Lead Area logs). Reservoir Geoscience
Definition 4D seismic Controls Knowledge
Integration w/ Prospect
Reservoir Engineering Required
Generation
New technology initiates secondary & tertiary recovery
The Shale Exploration Phase
Two Levels of Exploration

Historically, in Conventional Reservoirs two levels of exploration have occurred.
Rank exploration (also referred to as Pathfinding)
Usually covers a very large area, sometimes multiple basins.
Typically, only existing data is assembled, examined and interpreted
during this initial exploration effort.
Often performed with very limited data sets.
Results in identification of areas of potential interest
Play and Prospect Generation
Covers less area than Pathfinding but is still a fairly large area,
perhaps an entire basin.
New data obtained in limited amounts due to large area investigated.
Results in a more geologic details identified in smaller area Prospect.
Shale Exploration
Like Conventional Reservoirs Exploration is still necessary for shales. Again, two
levels exist.
Pathfinding exploration is regularly conducted in order to identify which
shales in which basins in which countries are among the most attractive.
This investigation is aided by the fact that shales have been studied for
many years for their capacity as source rocks in area.
However, in many basins where conventional fields are few or
undiscovered little data may exist.
The ultimate goal of this phase of exploration is two fold
The first is to identify the shale play to be developed.
The second is to identify sweet spots at the basin level where
the shale play has greater reservoir potential.
35
Basin modeling is a major tool during this phase.
Shale Exploration
Like Conventional Reservoirs Exploration is still necessary for shales. Again, two
levels exist.
Prospect generation also occurs in shales.
The goal of this phase is to identify local sweet spots in the shale
within the area of interest.
This can only be accomplished through the acquisition and integration
of multiple data types.
This integration occurs during the Pilot / Appraisal Project Phases in the
Shale Operating Cycle.
3D seismic is a major tool during this phase.

Analytical Tools for the Shale Geoscientist

Tectonics
Structure and stratigraphy
Basin Analysis
Petrophysics and Rock Physics Note: Software is not listed
Geochemistry as a tool for the Shale
Geomechanics Geoscientist.
Seismic, 3D and 2D
Hydraulic Fracturing / Microseismic Analysis

Seismic
During the initial days of the shale Boom most operators did not acquire or
analyze seismic during their efforts to develop their shale plays. The thinking
being A shale is a shale is a shale.
The use of seismic data began as companies realized that locating faults
became much more critical as horizontal boreholes were being drilled.
Fault identification and mapping has become more important as the horizontal
lateral length has increased in nearly all plays.
Additionally, locating subtle faults has proven to be important as their effect on
completions can be significant.
Emerging techniques are now being shown to be of major importance with
regard to locating production sweet spots.
Seismic
For shale reservoirs the use of seismic now optimally occurs at two points in
the Shale Operating Cycle.
Reconnaissance Level Exploration
Performed at basin / regional scale
Used to determine / confirm basin structure and general stratigraphy
Uses 2D seismic acquisition, processing and analysis.
Pilot / Appraisal Projects
Performed at local / sub-basin / development area scale
Used to identify production sweet spots for horizontal wellbore planning
Used to anticipate number of completion stages and types of completions.
Uses 3D seismic acquisition, processing and analysis.
Petrophysics
Used at multiple points in the Shale Operating Cycle.
Used both for Exploration and Pilot / Appraisal
Uses better logging tools for resistivity arrays, sonic arrays, imaging logs and
nuclear magnetic resonance.
Special core analyses for low porosity, low permeability, capillary pressure,
relative permeability and mechanical properties.
Correlations related to flow units.

Geochemistry
Used at multiple points in the Shale Operating Cycle.
Performed to identify and map areas of higher TOC within the shale play.
Pilot Project
Used to confirm that the Pilot location is actually in a regional Sweet Spot in the play.
Used to determine the mineral constituents within the shale.
Assists in the picking of borehole landing points and completion zones.

Geomechanics
Primarily used during the Pilot Project stage.
Performed to determine region stress orientation
Performed to determine tectonic regime (normal, compressional, strike-slip)
Pilot / Appraisal Level
Performed to develop a pressure model
Performed to determine rock mechanical properties
Performed to confirm stress regime

Hydraulic Fracturing / Microseismic Analyses

Used in combination during the Pilot Project
Pilot / Appraisal projects only
Performed to determine if the completion design developed during the Pilot project is
performs as anticipated.
Used to evaluate the volume of shale reservoir stimulated.
Used to confirm well spacing.

Optimization of Shale Production Integration Required
Geologic Analysis
Seismic
Analysis Static Model
Construction
Stimulation Reservoir
Monitoring Simulation
Reservoir Model
Stimulation Planning

Shale Reservoir Production Sweet Spots
Recent Article Rigzone

Musings: Thoughts About The Changing Future of Gas Shales by
G. Allen Brooks
.gas shales have sweet spots, a fact that has emerged over the
past year or so, and provides a death-knell to the "manufacturing"
development process.
suggests that other disciplines besides just horizontal drilling
and hydraulic fracturing are important for the success of gas
shales. We were intrigued by the mention of 3D seismic as a key
factor in this process. We have had that statement confirmed by
others in the seismic business.
Industry Acknowledgement
E & P Magazine On-Line Article

Use Studied Approach In Cracking Open Shales by Rhonda Duey,
Jan 27th, 2012.
Quote for George King, Apache Oil, The primary knowledge that
weve had in the past 10 years working in shales is that there are
definite sweet spots. That can make all the difference between
commercial and non-commercial wells.
http://www.epmag.com/Production-Field-Development/Use-Studied-
Approach-Cracking-Open-Shales_95211

Agenda

On-Going Shale Plays in North America
48
Source: US Dept of Energy, Energy Information Administration
Largest Gas Fields in the World
49
Source: US Dept of Energy, Energy Information Administration
Fort Worth
Basin Barnett
Shale Play

Source: U. S . D e p a r t m e n t o f E n e r g y O f f i c e o f F
o s s i l E n e r g y N a t i o n a l E n e r g y Te c h n o l o g y L a
Fort Worth Basin Barnett Shale

Development


Location and Aerial Extent
Core area is a
geologically favorable
area with high resource
concentration due to
favorable TOC and
thermal maturity.


Stratigraphy

Arkoma Basin
Fayetteville
Shale Play
54 Copyright 2001-2011 NExT. All rights reserved Source: U. S . D e p a r t m e n t o f E n e r g y O f f i c e o f F

Arkoma Basin Fayetteville Shale

Location and Aerial
Extent.

Arkoma Basin Woodford Shale

Location and Aerial
Extent.

Anadarko Basin
Woodford Shale
Play
Anadarko Basin Woodford Shale

Location and Aerial
Extent.

Anadarko Basin Woodford Shale

Stratigraphy

Texas-Louisiana
Salt Basin -
Haynesville-Bossier
Shale Play

Haynesville-Bossier Shale Play, Texas-Louisiana Salt Basin

Location and Aerial
Extent.

Haynesville-Bossier Shale Play, Texas-Louisiana Salt Basin

Stratigraphy

Appalachian Basin
- Marcellus Shale
Play

Appalachian Basin - Marcellus Shale

Location and Aerial Extent.

Appalachian Basin - Marcellus Shale

Stratigraphy

Eagle Ford Shale

Location and
Aerial Extent.

Eagle Ford Shale

Development
67
Source:
Eagle Ford Shale

Stratigraphy.

Williston Basin - Bakken Shale

Location and Aerial Extent.
69
Source:

Development
70
Source:

Stratigraphy

Michigan
Basin - Antrim
Shale Play

Illinois Basin
New Albany
Shale Play
Comparison of Major North American Shale Plays
Thickness

Depth

Geologic Age

Thickness and
Gas Content
versus Depth
Unlike the
previous slides
this comparison
technique shows
ranges.
This is a better
method for
comparison.

Spider Diagrams
Used for comparison of multiple attributes at the same time.

1930

1940

1950

1960

1970

1980

1990

2000

2010

2012

2012

Shale Plays
Total

Shale Plays
Similarities
Most shale plays are Devonian-Mississippian in age.
These shale reservoirs range between 150-450 feet
Devonian-Mississippian age reservoirs average 7000-10,000 in depth.
Differences
Some of the best shale gas basins are Mesozoic (Eagle Ford, Haynesville)
Some of the best shale gas basins have deeper - 10,000-13,000 (Eagle
Ford, Haynesville)
Major differences with regard to structuring occur between plays.
Differences in thickness, permeability and porosity influence gas-in-place
differences between shale gas plays
Shale Basics Summary
Many shale plays have developed in the United States and Canada
during the last two decades.
Development of these plays has accelerated significantly in recent
years.
This is due to the application of new techniques, such as horizontal
drilling and large scale, multistage completions.
Although many shales can be found throughout the world only those
that meet specific criteria will prove to be productive.
Being able to rapidly distinguish between those that will be
productive and those that wont is critical to operators success in
shale plays.

02 Basics of Shale Plays Shale Basins

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Shale Gas Evaluation Finding

Production Sweet Spots

Day #1, Morning (Introduction)

Why Study Shales?

Why Study Shales?

Why Study Shales?

4 Copyright 2001-2011 NExT. All rights reserved

Why Study Shales?

5 Copyright 2001-2011 NExT. All rights reserved

The Shale Production Control Matrix

Good Reservoir / Poor Good Reservoir / Good

Poor Reservoir / Poor Poor Reservoir / Good

The Shale Production Control Matrix

Good Reservoir / Poor Good Reservoir / Good

Poor Production Good Production

Poor Reservoir / Poor Poor Reservoir / Good

Whats needed to Identify the Best Shale Reservoirs

8 Copyright 2001-2011 NExT. All rights reserved

Generally, this understanding relates to

Reservoir Quality Completion Quality

Two separate but interlocked components

An understanding of reservoir quality must be obtained by studying at

10 Copyright 2001-2011 NExT. All rights reserved

Reservoir Quality Completion Quality

Completion quality will be discussed only briefly during this course.

11 Copyright 2001-2011 NExT. All rights reserved

Day #1, Morning (Introduction)

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Copyright 2001-2011 NExT. All rights reserved

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Management decision is made to invest

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Pilot project areas are

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Copyright 2001-2011 NExT. All rights reserved

phase using the

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Vertical pilot wells are

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Barnett Shale Study

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Rank Exploration Traditional Development Production

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Rank Exploration Traditional Development Production

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Rank Exploration Traditional Development Production

Two Levels of Exploration

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Analytical Tools for the Shale Geoscientist

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40 Copyright 2001-2011 NExT. All rights reserved

41 Copyright 2001-2011 NExT. All rights reserved

42 Copyright 2001-2011 NExT. All rights reserved

Hydraulic Fracturing / Microseismic Analyses

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Recent Article Rigzone

E & P Magazine On-Line Article

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