EXCO Succesful In The Haynesville

EXCO Resources Announces Results of First Horizontal Haynesville Completion

Wednesday, December 10, 2008 (source)

EXCO Resources, Inc. today announced the completion of the Oden 30H#6 in DeSoto Parish, Louisiana, its first Haynesville horizontal well completion. The Oden 30H#6 was drilled vertically to a depth of 12,304 feet in the pilot hole where 180 feet of whole core was recovered in the Haynesville Shale. The horizontal target was selected, and the well was plugged back and drilled with a 4,481 foot lateral to a total measured depth of 16,083 feet. We completed the well with a nine stage fracture stimulation treatment using 3.2 million pounds of proppant. The well had an initial production rate of 22.9 million cubic feet of gas per day (MMcf/d) on a 26/64th inch choke with 7,800 pounds per square inch (psi) flowing casing pressure. The well has been flowing to sales for the past five days and, in the last 24 hours, averaged 22.5 MMcf/d on a 26/64th inch choke and 7,800 psi flowing casing pressure. EXCO owns a 100% working interest and a 75% net revenue interest in the well.

EXCO owns a substantial acreage position in the core area of the Haynesville play in North Louisiana and East Texas, much of which is held by shallow production. We have drilled and completed several vertical Haynesville tests and have identified productive Haynesville shale across much of our acreage holdings. We have conducted a variety of core and fluid studies from data acquired in our vertical well program and have tested a combination of fluid types and fracture stimulation designs. The results of those tests were instrumental in developing the completion plan for our first horizontal well. EXCO has 2 operated horizontal wells, 1 vertical well and 2 outside operated horizontal wells in progress in the Haynesville play. We plan to drill 25 or more horizontal Haynesville wells in 2009.

Douglas H. Miller, EXCO’s Chairman, commented, “This well is the largest single well in our Company’s history and represents the first of many horizontal drilling locations that we have in the Haynesville play.”

Penn Virginia Corps Tests Haynesville In East Texas

Penn Virginia Announces Lower Bossier (Haynesville) Shale Well Results

Tuesday, June 02, 2009

Penn Virginia Corporation announces the results of a horizontal Lower Bossier (Haynesville) Shale well in Harrison County in east Texas.

PVA successfully completed the Steele #2-H well (100 percent working interest) which tested at an initial production rate of approximately 11.4 million cubic feet of natural gas per day with a flowing casing pressure of approximately 4,600 pounds per square inch. The well had an approximate 4,000-foot lateral and was stimulated with approximately 2.5 million pounds of sand and bauxite over ten stages. This well has the highest initial production rate of any Lower Bossier Shale well PVA has drilled to date in east Texas.

PVA is in the process of completing an additional Lower Bossier (Haynesville) well.

Investing In Shale Gas

How to Invest In Shale Gas Fields Like The Marcellus And Eagle Ford Shale

By Doodlebugs, eHow Member

The United States is the Saudi Arabia of natural gas, thanks to the discovery of new shale gas deposits like the Marcellus Formation. Here is how you can invest in what could be our primary energy source in the future. (source)

Instructions

1. Step 1

   Learn as much as you can about shale gas and its economic importance. The United States has an abundance of clean natural gas trapped in shale formations such as the Marcellus Shale of Appalachia, the Barnett Shale near Fort Worth, the Haynesville Shale in Louisiana and newly discovered gas shales such as the Eagle Ford shale in South Texas. Many experts believe that there is enough natural gas in these shale formations to last the United States a hundred years or more. According to oil man T. Boone Pickens this clean fuel may one day power our cars as well as our homes. How can you invest in this growing industry? There are a couple of ways to invest in shale gas. Some are more risky than others.

2. Step 2

   Consider direct investment in a well. One way to invest in shale gas is to invest directly in a wildcat well being planned. This type of investing is for the rich only since there is a high probability it could be a dry hole but potential rewards could be very high. For direct investment you will often need as much as $100,000. If you have the stomach for this kind of investing contact companies like Petrohawk Resources, symbol HK, and inquire about direct investment.
   The second, and less risky way of investing in shale gas is to buy shares of the companies that are most active in drilling in gas shales such as the Marcellus shale formation. These include Chesapeake, symbol CHK, XTO Energy, symbol XTO, Petrohawk, symbol HK, Devon Energy, symbol DVN, and EOG Resources, symbol EOG.
   Petrohawk (HK) and TXCO Resources (TXCO) are active in the newly discovered Eagle Ford Shale in South Texas. Chesapeake, Devon and XTO are active in the Barnett Shale and Marcellus formation.

3. Step 3

   Buy shares on the open market. A third option for investing in shale natural gas is to buy shares of an Exchange Traded fund or ETF. You can invest in natural gas as a commodity with the ETF whose symbol is UNG or you can focus on exploration and production with an ETF called First Trust ISE Revere Natural Gas, symbol FCG and listed on the NYSE, which is composed of companies like the ones mentioned in step 2 that explore for and produce natural gas.
   For more info on the Marcellus Formation see the resources section.

Gas Production Boom

APRIL 30, 2009

U.S. Gas Fields Go From Bust to Boom

• By BEN CASSELMAN (source)

CADDO PARISH, La. -- A massive natural-gas discovery here in northern Louisiana heralds a big shift in the nation's energy landscape. After an era of declining production, the U.S. is now swimming in natural gas.

Even conservative estimates suggest the Louisiana discovery -- known as the Haynesville Shale, for the dense rock formation that contains the gas -- could hold some 200 trillion cubic feet of natural gas. That's the equivalent of 33 billion barrels of oil, or 18 years' worth of current U.S. oil production. Some industry executives think the field could be several times that size.

"There's no dry hole here," says Joan Dunlap, vice president of Petrohawk Energy Corp., standing beside a drilling rig near a former Shreveport amusement park.

From Rock to Gas

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Jared Moossy/Redux

Huge new fields also have been found in Texas, Arkansas and Pennsylvania. One industry-backed study estimates the U.S. has more than 2,200 trillion cubic feet of gas waiting to be pumped, enough to satisfy nearly 100 years of current U.S. natural-gas demand.

The discoveries have spurred energy experts and policy makers to start looking to natural gas in their pursuit of a wide range of goals: easing the impact of energy-price spikes, reducing dependence on foreign oil, lowering "greenhouse gas" emissions and speeding the transition to renewable fuels.

A climate-change bill being pushed by President Barack Obama could boost reliance on natural gas. The bill, which could emerge from the House Energy and Commerce Committee in May, is expected to set aggressive targets for reducing emissions of carbon dioxide, the most prevalent man-made greenhouse gas.

Meeting such goals would require quickly moving away from coal-fired power plants, which account for substantial carbon emissions. President Obama wants the U.S. to rely more on renewable energy such as wind and solar power, but those technologies aren't ready to shoulder more than a fraction of the nation's energy burden. Advocates for natural gas argue that the fuel, which is cleaner than coal, would be a logical quick fix. In addition, billionaire energy investor T. Boone Pickens has been touting natural gas as an alternative to gasoline and diesel for cars and trucks.

"The availability of natural-gas generation enables us to be much more courageous in charting a transition to a low-carbon economy," says Jason Grumet, executive director of the National Commission on Energy Policy, who was a senior adviser to President Obama during the campaign.

Just three years ago, the conventional wisdom was that U.S. natural-gas production was facing permanent decline. U.S. policy makers were resigned to the idea that the country would have to rely more on foreign imports to supply the fuel that heats half of American homes, generates one-fifth of the nation's electricity, and is a key component in plastics, chemicals and fertilizer.

But new technologies and a drilling boom have helped production rise 11% in the past two years. Now there's a glut, which has driven prices down to a six-year low and prompted producers to temporarily cut back drilling and search for new demand.

The natural-gas discoveries come as oil has become harder to find and more expensive to produce. The U.S. is increasingly reliant on supplies imported from the Middle East and other politically unstable regions. In contrast, 98% of the natural gas consumed in the U.S. is produced in North America.

Coal remains plentiful in the U.S., but is likely to face new restrictions. To produce the same amount of energy, burning gas emits about half as much carbon dioxide as burning coal.

Natural gas has never played more than a supporting role in the nation's energy supply. Crude oil, refined into gasoline or diesel, fuels nearly all U.S. cars or trucks. Coal is the dominant fuel for generating electricity.

Natural-gas production in the U.S. peaked in the early 1970s, then fell for a decade due to weak prices and declining gas fields in Texas, Louisiana and elsewhere. Production bounced back in the 1990s with the discovery of new fields in New Mexico and Wyoming, but by 2002, output was falling again -- this time, most experts thought, for good. Believing the U.S. would soon need to import liquefied natural gas from overseas, companies such as ConocoPhillips, El Paso Corp. and Cheniere Energy Inc. spent billions on terminals, pipelines and storage facilities.

The supply fears drove up prices, which spurred innovation. Oil-and-gas companies had known for decades that there was gas trapped in shale, a nonporous rock common in much of the U.S. but considered too dense to produce much gas.

In the 1980s, Texas oilman George Mitchell began trying to produce gas from a formation near Fort Worth, Texas, known as the Barnett Shale. He pumped millions of gallons of water at high pressure down the well, cracking open the rock and allowing gas to flow to the surface.

Oklahoma City-based Devon Energy Corp. bought Mr. Mitchell's company in 2002. It combined his methods with a technique for drilling straight down to gas-bearing rock, then turning horizontally to stay within the formation. Devon's first horizontal wells produced about three times as much gas as traditional vertical wells.

The development of the Barnett Shale almost single-handedly reversed the decline in U.S. natural-gas production. Last year, the Barnett produced four billion cubic feet of gas a day, making it the largest field in the U.S. Other companies such as Newfield Exploration Co., Southwestern Energy Co. and Range Resources Corp. found shale fields across the U.S.

One of the most aggressive companies was Oklahoma City-based Chesapeake Energy Corp., which got into the Barnett a couple of years behind cross-town rival Devon, and was an early entrant into the second big U.S. field, the Fayetteville Shale in Arkansas. In 2005, Chesapeake Chief Executive Aubrey McClendon sent teams of geologists across the country with a mission: Find the next Barnett. Less than two years later, they told him they had it, in Louisiana.

The Haynesville Shale is centered in northern Louisiana, one of the country's oldest oil- and gas-producing regions. Wildcatters had explored beneath the lush cow pastures and cotton fields as far back as the 1870s. Shreveport, the region's largest city, saw decades of booms and busts until the 1980s, when a glut of cheap oil from overseas all but killed the region's oil industry.

Oil companies knew about the Haynesville Shale, but it was considered a less viable prospect than the Barnett. The shale lies 10,000 or more feet below ground, where high pressure and 300-degree temperatures are enough to fry high-tech drilling equipment.

But in 2006, Chesapeake drilled an exploratory well and decided the results were promising enough to justify the higher cost of drilling in such harsh conditions. By late 2007, Mr. McClendon says, "we knew that we had a tiger by the tail."

In March 2008, as oil and gas prices were soaring, Chesapeake went public with its findings. The rush was on: Dozens of companies dispatched agents to the area to lease land for drilling, turning farmers and ranchers into millionaires overnight.

"There was excitement in the air," recalls Jeffrey Wellborn, a Shreveport resident who sits on the board of the local Sierra Club. "You thought everyone in the world had won the lottery."

The frenzy marked the peak of a nationwide drilling boom that was fueled by a combination of soaring energy prices and easy credit. It didn't last. Between July and October, oil and gas prices fell by more than 50%, and kept falling.

The weakening economy eroded demand for both oil and gas. Natural gas, unlike oil, suffered from a supply glut. U.S. gas production rose 7.2% last year, while oil production fell 1.9%. As a result, oil prices are up 12% since the start of 2009. Natural-gas prices have fallen 41% to their lowest since 2002.

Gas producers saw their profits evaporate and share prices slump. Liquefied-natural-gas imports plunged, leaving import terminals nearly idle. Worried about a glut, companies cut back sharply on drilling and formed a lobbying group to try to boost demand.

The growing supply created opportunities for policy makers and environmentalists, who saw natural gas as a possible solution to the nation's energy problems. Some groups suggested burning more gas and less coal for power generation. Others favor its use in vehicles.

Mr. Pickens has spent millions promoting an energy plan that aims to, among other things, convert thousands of big-rig trucks to run on natural gas. Mr. Pickens has large investments in natural gas and stands to benefit if his plan is adopted. In TV ads, Internet videos and speeches, he emphasizes a different goal: reducing U.S. dependence on foreign oil.

Environmental Capital

• Green Ink: Mixed Blessings of a Natural-Gas Boom

Mr. Pickens arrived for a recent speech in Dallas in a natural-gas-fueled Honda Civic with a bright blue "Pickens Plan" logo. He told a packed auditorium that the U.S. is importing two-thirds of its oil even as the country is "absolutely overwhelmed with natural gas." If the reverse were true, he said, he would favor burning oil.

Some environmentalists have embraced Mr. Pickens's plan as a way to fight climate change. Carl Pope, executive director of the Sierra Club, says he sees natural gas as a "bridge fuel" that could help the U.S. burn less coal and oil until renewable sources of energy are ready to take over.

The dual message of energy security and environmental responsibility has helped Mr. Pickens win powerful allies, including Senate Majority Leader Harry Reid, House Speaker Nancy Pelosi and dozens of elected officials from both parties. A bipartisan bill providing tax incentives for natural-gas cars looks likely to pass this year.

Not everyone shares Mr. Pickens's enthusiasm for natural-gas vehicles. Major users of natural gas, such as utilities and chemicals companies, are concerned the plan would drive up prices -- an outcome that would benefit producers.

Energy Secretary Steven Chu and some other policy makers have expressed doubts about the practicality of retrofitting hundreds of thousands of service stations to offer natural gas. Some environmental groups, including the Natural Resources Defense Council, have argued that natural gas is better used to replace coal for power generation, and that cars should run on electricity generated by the sun, wind and natural gas.

Market forces are already helping natural gas make inroads against coal and oil. Gas is now cheaper than coal in many parts of the country, leading utilities to burn more gas. Of the 372 power plants expected to be built in the U.S. over the next three years, 206 will be fired by gas and just 31 by coal, according to the Energy Information Administration.

Natural gas is gaining market share far more slowly in transportation. Earlier this year, AT&T announced it would convert up to 20% of its truck fleet to run on natural gas, largely because it has been cheaper than gasoline in recent years. Cities including New York, Los Angeles and Atlanta have converted part of their bus fleets to run on natural gas, for air-quality reasons.

Shreveport could be the next city to make the switch. In March, Mayor Cedric Glover announced that the oil capital turned natural-gas boomtown would abandon diesel and convert its bus fleet to natural gas.

—Russell Gold contributed to this article.

Write to Ben Casselman at ben.casselman@wsj.com

The Challenge Of Producing Gas From Shale

The following article comes from the May, 2009 issue of the "AAPG Explorer". Reading about the many logging tools and other methods allegedly used to evalute these shales and make drilling, fracing, and completion decisions, leads me to wonder if maybe some people are making this more complex than it needs to be. Of course service companies want to sell as many of their products and services as possible, and that should be taken into consideration.

At the same time, these shale gas plays are relatively new and experience will provide more efficiency. Meanwhile I think there is much to be learned.
Peter

Shale Calls for the Unconventional

By LOUISE S. DURHAM
EXPLORER Correspondent (source)

Natural gas prices in the $3/Mcf-and-under range understandably are causing many operators to scale back on budgets, production and new drilling projects.

Just don’t expect this to be a permanent scenario.

The consensus is that once the economy turns around, hydrocarbon demand will make an about-face as well.

The waiting game doesn’t necessarily imply wasted time as it offers continued opportunity to delve deeper into potential techniques to better evaluate some of the more challenging and often perplexing plays being explored/ produced.

High on this list are the numerous shale gas plays that have sprung to life over the past couple of years in various regions of the country.

Gas shales differ from conventional reservoirs in that they function not just as reservoir rock but also source rock and seal. Economical production from this complex rock demands extensive hydraulic fracturing and often requires horizontal wells.

Successful wells depend on an in-depth understanding of the geology, petrophysics and geomechanics of the particular shale formation. In fact, an integrated approach to shale gas evaluation can be key to conquering the complexities of these rocks to optimize production of the natural gas they hold.

“It’s fairly obvious to anyone who works in these plays that conventional methods just don’t work,” said Duane Sommer, senior petrophysical engineer at Baker Hughes.

“Our integrated interpretation methodology designed specifically to evaluate shale gas reservoirs focuses on conventional resistivity, neutron, density, advanced acoustic logs,” Sommer said, “and we add magnetic resonance, geochemical, geomechanics and borehole image logs to determine an array of information.”

That array includes lithology, mineralogy, rock mechanical properties, total organic carbon and gas-in-place in the formation, he added.

Specific Challenges

However, not all shales are created equal, so there are differing factors that must be taken into account.

For instance, borehole imaging is not that important in the high-profile Haynesville shale play because there’s no significant fracturing in the Haynesville, Sommer said. In contrast, it’s quite important in the Barnett play and some others.

He noted also that in the Haynesville the actual presence of gas is a given, but it presents other challenges:

• How to optimize getting that gas out of the ground.
• Selecting the best intervals for the completion.
• How to implement the frac job to get the best production possible.
• Where to place the horizontal leg if going lateral.

The goal with all the shales is to gather all the data possible.

“One of the things we found in the Haynesville, especially, is the intervals that seem to produce the best and have the most silicious material,” Sommer said. “They have more quartz than limestone.

“Part of that is the geomechanics,” he explained. “That rock breaks easier – making it easier to frac – so we look at the geochemical logs in combination with the advanced acoustics which we do rock mechanical properties with and look at what intervals will frac easiest.”

Identifying the Interval

The next step is to look at some of the standard logs or magnetic resonance to try to get a better idea of porosity. This can vary significantly in different plays, e.g., porosity is quite low in the Barnett but ranges from 8 to 10 percent in the Haynesville, according to Sommer.

“When we put all our information together, first we find which intervals in the well will fracture easiest,” he said. “Of those we identify which have the best porosity, which has total organic carbon in or near that interval to supply the gas itself.

“We’re trying to pick the interval we think will be most successful for completion,” Sommer noted. “If you’re going lateral instead of just perfing and fracing, you still want to drill the lateral in that same interval.”

The acquired data are presented to the client in a large, wide plot that Sommer likens to a facies curve that shows crucial information such as:

• The target type of rock.
• A piece of rock that would be a barrier to a fracture.
• Rock to stay away from.

“We’re trying to make it as simple as possible for someone to look at the well,” Sommer said, “and even if they don’t understand all the pieces, to be able to say OK, this is where we need to be, where we need to frac, where we need to perf or where to drill our lateral.

“In a nutshell, that’s our approach,” said Sommer, who noted the overall presentation remains the same even though the individual pieces change from basin to basin.

“The general process,” he said, “usually works for all.”