Thought For The Day

Wealth is based on productivity, and productivity is expandable. In fact, productivity is fabulously expandable.

P.L. O'Rourke Why is oil and gas production from Federal Lands declining, while it is increasing on private lands? ( in the USA) Peter

A Quiet Revolution In The Oil And Gas Industry

There has been somewhat of a quiet revolution taking place in today's oil and gas industry.  Or perhaps a better description is that a slow, decades-long series of technological innovations is   enabling the production of oil and gas never before dreamed of.  For the most part, politicians, economists, planners, "social engineers"  (I hate that term) and the general public, have not caught on.  The importance of this revolution or evolution in where and how our energy comes from is enormous. 

The world's economy is at a crossroads.  Solar energy, wind energy, geothermal energy, bio-fuels, and all other current alternatives are clearly not the solution to our near term energy needs.  We must accept this, perhaps swallow a little pride, and accept the idea that we really need all the oil and gas we can find and produce.

Meanwhile, fortunately, the idea that the burning of fossil fuels and the consequent release of "fossil" carbon dioxide as the cause of global warming and/or climate change is being proven to be false (if not an outright fraud and hoax).  See here for more on global warming/climate change.

The following article is an excellent summary of the timeline of how this transformation of the oil and gas business has come about.  All geologists, geophysicists, engineers, and others, should take note.

The bottom line is, we have and can produce A LOT of oil and natural gas.  "Peak Oil" has been pushed ahead.  This is good for our economy; it is good for us; it might help us get on the road back to growth and prosperity.  It buys us time to develop the inevitable alternatives.  Parents, "teach your children well".
Peter

Here is a pertinent excerpt from the following article:

"Is horizontal drilling helping bring about any other changes? Perhaps it is even changing the way corporations work. “Companies that fail to adequately research the geology are putting themselves at considerable risk if they assume all resource plays are alike and that more and larger fracks are the solution to economic production,” according to Russum. Even so, engineers are increasingly replacing geologists in the executive suite.

Traditional geologists who spent entire careers looking for conventional reservoirs are now more interested in minor variations in rock properties, in stress regimes and in proximity to source rock. In terms of traditional petro-geology this is a difficult concept to grasp, but to a large extent it is a response to the revolution spawned by horizontal drilling."

source:

Where it All Began by Peter McKenzie-Brown - Language Instinct Published : May 30th, 2012 1996 words - Reading time : 4 - 7 minutes

The world of oil and gas was quite a different place a quarter century ago. Production mostly came straight up out of vertical holes. Though the Texans had drilled the first horizontal well in 1929, in Canada horizontal drilling was still mostly an esoteric, unproved and untested technology. In 1987, all that began to change – so much so that, during the last 25 years, it simultaneously emerged as a standard production technique and revolutionized production. One result is that many petroleum resources have become technology-driven plays. Another is that reserves are way, way up. In a sense, the most important uses of horizontal drilling technologies are reverse images of each other. “What makes horizontal drilling for nonconventional resources (like shale gas and tight oil) so attractive to the financial community is the very high initial rate of return. In the beginning, production rates are extremely high, although they quickly taper off. You have to remember that these applications enable you to get highly desirable hydrocarbons out of really poor reservoirs,” according to Dave Russum, who is director of geosciences at AJM Deloitte, a consultancy. The oilsands represent the mirror image of this situation. “You are drilling into tremendous reservoir rocks – highly porous and very permeable, so there’s plenty of oil in there. But until you process the stuff it isn’t a particularly attractive commodity.” The Bitumen Story It’s true that in April 1978 Imperial Oil drilled Canada’s first horizontal well into the Clearwater formation at Cold Lake – a storied well overseen by Dr. Roger Butler in an early test of a system of oilsands production now known as steam-assisted gravity drainage (SAGD). After that test and a less interesting effort by Texaco a couple of years later, in Canada the technique mostly languished until 1987. Then the advent of improved down-hole drilling motors and the invention of other necessary supporting equipment, materials, and technologies – particularly down-hole telemetry equipment, which enabled rigs to drill straight on target – led to an explosion of new applications for this technology. Producers and the drilling and service firms that support them found endless new uses for directional drilling – especially as it is used for horizontal wells. Appropriately, in Canada the first horizontal wells drilled after Imperial’s early test were part of the Underground Test Facility (UTF), which celebrated its official opening on June 29th, 1987. Developed by the Alberta Oil Sands Technology and Research Authority (AOSTRA), the UTF involved a pair of tunnels driven into limestone 15 metres below the reservoir. Within those tunnels, AOSTRA constructed large well chambers. “Pairs of injection and production wells were drilled upwards from the well chambers at a 170 slant,” according to the mining engineer behind the project, Gerry Stephenson, “and deflected horizontally into the base of the reservoir. The mobilized bitumen drained by gravity from the steam chamber in the reservoir to the well head in the tunnel and all of the production was pumped from a central location.” Those tests proved Butler’s theories about SAGD beyond any possible doubt. Over its 15-year life, the UTF also evaluated other recovery strategies, but nothing compared to its SAGD results. “AOSTRA’s staff had estimated that the recovery might be somewhere between 30 percent and 45 percent of the bitumen in place” during the Phase A tests, according to Stephenson. “We actually got 65 percent recovery. The steam chambers formed by mobilization of the bitumen spread way beyond the area we’d expected….Over the 10-year life of the well pairs, Phase B got a steam/oil ratio, the most critical figure of all, of 2.3 to one.” The tests at the UTF forever transformed Canada’s oilsands industry. Today, SAGD is responsible for more than half of Canada’s bitumen production. Ironically, Sceptre Resources drilled the first horizontal well in Saskatchewan to test a SAGD-like system at Tangleflags, just as the UTF began its definitive tests. Drilled into the shallow (450-metre) Lloydminster sandstone, this primitive application of a form of SAGD illustrated the kinds of problems horizontal drilling could overcome. With an active aquifer below and a gas cap above, the reservoir’s pay thickness was about 27 metres. The oil was heavy: about 13o API. Primary production from the field had been meagre (0.6% of the oil in place), and the use of cyclic steam stimulation, which uses vertical production wells, had flopped when they tapped the aquifer and started producing 99% water. That was when the company decided to try SAGD – not the technique we use today, but the primitive version Imperial had tried out nine years earlier. Sceptre injected steam through four vertical wells near the gas-oil contact, draining the mobilized oil through a horizontal well. At the industry’s leading edge, the company found itself with a technical and economic success. Fast Production from Tight Reservoirs More than any other series of innovations, the technology-intensive processes that now surround directional drilling have enabled the industry to get production out of otherwise unproductive rock. In August of that same transformational year, Alberta Energy drilled the first horizontal well into the Glauconitic formation at Suffield. This was the first time a Canadian operator drilled horizontally into a conventional oilfield. Things then quickly sped up. In February 1998 alone, three significant projects based on horizontal drilling took off. Amoco began a 10-well horizontal drilling program at Athabasca, into the Wabiskaw formation. Canadian Hunter drilled gas wells at Ansell (Alberta) into the Cardium formation and at Helmet (British Columbia) into the Jean Marie. A few months later, Shell Canada drilled for Mississippian oil in Saskatchewan, at Weyburn. This early application of the technology was meant to connect isolated small reservoirs or improving contact within heterogeneous rocks to enhance the sweep efficiency. “In the 1990s the big push was to explore conventional carbonate rocks, especially from the Mississippian in Saskatchewan,” according to AJM Deloitte’s Russum. “The idea was to develop known reservoirs where the rock quality was variable, using horizontal wells to extract more oil from those formations…. Many different companies hopped on to the horizontal drilling band wagon in Saskatchewan with more than 500 wells drilled into the Mississippian in 1997 alone. In that year more than 1300 horizontal oil wells were drilled across the basin – a tally that was not beaten until 2007.” Horizontal drilling also began to tap the heavier oils in Saskatchewan and southeastern Alberta in the 1990s, and there was a lot of experimentation in other reservoirs. Also, of course, in that decade SAGD began to be developed in its modern form. As horizontal drilling became more commonplace, the petroleum industry began combining it with innovations in both drilling and well completion technologies and ideas. The result has been like a snowball rolling downhill. Horizontal drilling has been enhanced by geo-steering, measurement-while-drilling, coil tubing, down-hole motors and new bit design, for example. Also, producers can now drill multilateral horizontal wells from a single drilling pad. Perhaps the important recent development on the drilling side is the monobore. Monobore drilling involves running a casing string, then forcing a steel cone down the well to expand it in the hole. This process is repeated with identical casing strings. Thus, monobore completions have the revolutionary characteristic of installing a string with the same interior diameter from top to bottom. “These are making a huge difference,” said Russum. “In the past you had to drill a vertical well, then run the casing to the bottom and wait for the casing to set before you could begin to drill the horizontal leg. Monobores help reduce those time-consuming steps.” Although technologies like microseismic are also making a difference, the most important developments on the completion side have involved the increasing power and sophistication of hydraulic fracturing. Better fracking has developed because of new packers, better pumping equipment and better treatment fluids and proppants. “It’s now easier to isolate horizontal wells and to put fractures into certain points of the formation,” according to Russum. “In the early days, each stage of multistage fracking would take a whole day. Each frack would have to be tested separately before you proceeded to the next one. Today it’s a continuous process.” These clusters of technological breakthroughs first created the shale gas revolution. Pioneered by an American, George Mitchell, in the Barnett shale in Texas, tight gas reservoirs began yielding highly economic volumes of natural gas – and, not incidentally, drove down the price of gas. Some observers now describe natural gas as a low-value by-product encountered in shale reservoirs in the quest for natural gas liquids. From a production perspective, the other great outcome from this cluster of technologies has been the development of tight oil from shale – what Russum prefers to call “conventional oil from more shaley, low-permeability reservoirs.” One outcome is that both western Canada and the US are experiencing growing light oil production for the first time in decades – much of it coming from the Bakken play in North Dakota and Montana. After decades of decline in Alberta, for example, light oil production has recently risen to ten year highs. An Explosion of Uses These new technologies are changing almost everything about Canada’s petroleum industry. For example, horizontal wells are now a huge part of gas storage. “You can store gas very quickly into those wells,” said Russum, “and you can extract it quickly, too. Then there is the whole area of trying to reduce surface impact. I think we’re going to see more and more of that. Surface owners are more and more reluctant to have pumpjacks and other surface equipment on their land, and horizontal wells are less likely to disturb natural habitat. There is also extended reach, so you can reach under lakes and towns and cities. You can use it to reduce water production in a thin reservoir located over an aquifer.” The economics of the horizontal well are also greatly improved, especially when you are planning production from a narrow reservoir – ten metres thick, for example. Horizontal wells provide much greater contact with the reservoir per dollar of drilling than do their vertical kin. And when they are drilled in search of unconventional resources like shale gas and tight oil, the producer gets a quick payback because initial production rates are so high. Still not convinced? Then let the numbers tell the tale. According to an AJM Deloitte study which is complete to late 2011, more than 30,000 horizontal wells have produced conventional oil or gas in Western Canada over the past twenty five years. Of that tally, 4,300 were completed in 2011. This set a record for horizontal oil drilling: nearly 3,500 wells (led by the Cardium, Viking and Bakken), and an additional 800 wells focused on gas – mainly attracted by the high liquids content in the Montney and Middle Mannville. Today, half of Western Canada’s wells are being drilled horizontally. Is horizontal drilling helping bring about any other changes? Perhaps it is even changing the way corporations work. “Companies that fail to adequately research the geology are putting themselves at considerable risk if they assume all resource plays are alike and that more and larger fracks are the solution to economic production,” according to Russum. Even so, engineers are increasingly replacing geologists in the executive suite. Traditional geologists who spent entire careers looking for conventional reservoirs are now more interested in minor variations in rock properties, in stress regimes and in proximity to source rock. In terms of traditional petro-geology this is a difficult concept to grasp, but to a large extent it is a response to the revolution spawned by horizontal drilling. Oilsands companies in particular, but also other companies involved in modern resource plays are basing their business plans on step-by-step, decades-long development of vast and well-defined resources. This means traditional wheeling-and-dealing is at least partly on the decline – to a large extent replaced by courting cash-rich foreign companies with deep pockets and the desire to support these capital-intensive activities. Peter McKenzie-Brown Language Instinct Peter McKenzie-Brown Peter McKenzie Brown is the vice president of a resource company. He has written several volumes of history, and has worked in the corporate and academic worlds. He is British by birth, American by upbringing and Canadian by choice. Disclaimer : Although the writer is a director and officer of Stratabound, the thoughts and views herein are his only and not those of Stratabound. He is not registered in any jurisdiction as a broker or investment adviser, so nothing herein should be construed as advice on whether to buy, sell or hold shares of Stratabound or any other company mentioned herein. Peter McKenzie-Brown Archive Website Contact author Subscribe to his services

Bet On Exxon Mobil

I'm betting with Exxon Mobil that natural gas demand and prices will increase.  Americans should applaud this which will make America more energy-independent and maybe pay off a little of our debt and even create some jobs.  That's a good thing, right?
Peter

Exxon Mobil sees big growth in natural gas demand

Zain Shauk

San Francisco ChronicleMay 31, 2012 04:00 AMCopyright San Francisco Chronicle. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Thursday, May 31, 2012

 

J. Scott Applewhite / AP

Exxon Mobil CEO Rex Tillerson says the oil giant is betting on growth in the demand for natural gas.

• Exxon Mobil sees big growth in natural gas demand 05.31.12

Dallas --
Exxon Mobil Corp. believes the demand for natural gas will grow, making it the world's second-largest energy source by 2040 - but the energy giant has a lot of gas that it wants to sell now, its top executive told shareholders at its annual meeting Wednesday.

"We're studying the possibilities of exporting natural gas from North America, from both the U.S. and Canada, because of the abundant supply that has now been confirmed in North America," CEO Rex Tillerson told shareholders.

The world's largest publicly traded company has bet big on the future of natural gas, which Tillerson believes will replace coal as the No. 2 fuel behind oil.
Exxon Mobil became the nation's largest gas producer after it acquired XTO Energy for $25 billion in 2010.

A surge in North American gas production has brought prices to their lowest levels in a decade and has created challenges for producers. Meanwhile, controversy swirls around the main drilling technique fueling the natural gas boom - hydraulic fracturing.

Tillerson said the economic pressures that have pushed natural gas prices down have not dampened the company's long-term outlook on gas.
"That's a transient condition," Tillerson told reporters after the meeting.

The meeting itself included criticisms from shareholders representing environmental concerns. Some protested the company's use of hydraulic fracturing, in which water, sand and chemicals are blasted underground at high pressure to release hydrocarbons locked in rock formations.
Among shareholder proposals were requests that Exxon Mobil draft a report on the risks of hydraulic fracturing  (fracking shown to be safe in numerous studies) and that it set greenhouse gas reduction goals.  (greenhouse gas theory and global warming totally discredited...see http://petesplace-peter.blogspot.com/ )

Both proposals failed by large margins.
Some shareholders saluted the company for its financial performance - a profit of $41 billion in 2011 - and its investments in education and other social programs.

Tillerson said the company's expectations that world natural gas demand will grow 60 percent by 2040 made its heavy investments, including its XTO purchase, valuable.
"There's no regrets," Tillerson said.

He said he expects natural gas demand to grow in North America, mainly for power generation and industrial uses. Transportation fuel growth will not be dramatic for private vehicles, although there is potential for added demand from commercial fleets, Tillerson said.

Zain Shauk is a Houston Chronicle staff writer. E-mail: zain.shauk@chron.com

Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2012/05/30/BUHR1OPMS2.DTL#ixzz1wRNGuAbC

New Producing Formation In North Dakota's Williston Basin

Horizontal drilling and hydraulic fracturing open up a wealth of oil and gas producing opportunities never before thought possible.
Peter

N.D. drillers aiming for sandy section below Bakken

Oil drillers working in the rich Bakken and Three Forks formations that are fueling North Dakota's unprecedented oil rush are now aiming for crude in a sandy layer between the two.
By: James MacPherson, Associated Press

source: http://www.grandforksherald.com/event/article/id/237228/

 

BISMARCK — Oil drillers working in the rich Bakken and Three Forks formations that are fueling North Dakota's unprecedented oil rush are now aiming for crude in a sandy layer between the two.

Geologists say the layer, which is being called the Pronghorn, is about 60-feet thick.

Denver-based Whiting Petroleum Corp. has several horizontal wells aimed at Pronghorn in western North Dakota, and initial results are positive, company chairman and CEO James Volker said during a panel discussion at the Williston Basin Petroleum Conference and Expo.

Some wells were pumping at rates "every bit as good" as the Bakken, said Volker, who was joined on the panel by Harold Hamm, chairman and CEO of Oklahoma City-based Continental Resources Inc., and Dave Roberts, executive vice president of Marathon Oil Corp.

The executives said North Dakota — which is now the nation's No. 2 oil producer, behind only Texas — is a model for oil development in the U.S. They pledged that their companies would act as good stewards.

The layer has often been attributed to the Three Forks formation, and referred to as the Three Forks-Sanish, but it's more correctly part of the Bakken formation directly above it, North Dakota Geological Survey geologist Julie LeFever said. She said the state's Geological Survey is now referring to the layer at the Pronghorn and asked that companies and geologists do the same to avoid confusion.

The three-day expo, which concluded Thursday, drew more than 4,000 people from 47 states and several countries to Bismarck, said Ron Ness, president of the North Dakota Petroleum Council.

Among the attendees was Tony La Russa, the former St. Louis Cardinals manager who guided the team to the World Series title last year. Invited by Hamm, he said he was curious to see the oil patch and how things have changes since he was last in the state 50 years ago.

"There is a lot of excitement and a lot of people coming to North Dakota," he said.

---

Copyright 2012 The Associated Press.

World Map Of Geologic Basins With Proven And Potential Oil And Gas Production From Shales

Horizontal Drilling And Hydraulic Fracturing In Colorado Noble Energy Style

Lets hope this play really takes off.  Maybe increasing oil and gas production can pull America out its financial debt-driven hole and help people get back to work.  Go Noble!
Peter

Noble Energy spending $8 billion to drill Colorado's shale oil fields

Posted: 05/22/2012 04:20:52 PM MDT
May 22, 2012 10:24 PM GMTUpdated: 05/22/2012 04:24:14 PM MDT

By Mark Jaffe
The Denver Postdenverpost.com

Noble Energy Inc. is expanding its operations in Colorado with $8 billion in investment over the next five years.

The company is developing horizontal wells that stretch nearly two miles through the oil-rich Niobrara formation, which lies beneath a big swatch of eastern Colorado.

Houston-based Noble has expanded its holdings to 880,000 acres and is experimenting with increasing the density of wells drilled from the same pad.

"We are continuing to ramp up and invest" in the Niobrara, Chuck Davidson, Noble's chief executive officer said in an interview. "This is a major area for us."

The company is spending $1.3 billion in Colorado in 2012 — about a third of its capital — and plans to spend a total of $8 billion over the next five years, Davidson said.

Noble is one of three major drillers in the Colorado portion of the Niobrara. The others are Anadarko Petroleum and EOG Resources.

Noble today opened a new operations center in Greeley and plans to double the number of horizontal wells drilled this year to 175, the company said. It employs about 750 people in Colorado and uses 120 contractors with several thousands workers, Davidson said.

To unlock the oil in the Niobrara, drillers sink wells that run horizontally through the shale formation and then hydrofracture or "frack" the rock by pumping in fluid under pressure to release the oil.

Noble has seven horizontal drill rigs in the state and plans to add two more this year, Davidson said.

Most horizontal wells are drilled to about 5,000 feet, but Noble has drilled several to 9,000 feet. At about $8 million each, the long-reach wells are about 60 percent pricier than standard horizontal wells, according to Noble data.

"They are more expensive but you get more bang for the buck." Davidson said.

Noble also has been experimenting with wells that parallel each other through the Niobrara at different levels, and with tighter spaced wells.

"This is what you see in new fields," said Pete Stark, a vice president at consulting firm IHS Inc. "The Niobrara is a complex petroleum system and companies have to figure out how to get the oil out."

The company is using "EcoNodes" drilling pads, which are designed to minimize its footprint and centralize operations.

"It is a way of becoming more efficient," Davidson said.

IHS's Stark said such efforts are in part a response to the issues raised by drilling opponents and environmentalists.

Noble estimates its potential reserves at about 1.4 billion barrels of oil in the portion of the Niobrara focused around Weld County.

Noble has identified about 4,000 drill sites in Colorado. "We are still learning," Davidson said. "It is going to 10 to 15 years to drill this out."

Read more: Noble Energy spending $8 billion to drill Colorado's shale oil fields - The Denver Post http://www.denverpost.com/breakingnews/ci_20683336/noble-energy-spending-8-billion-drill-colorados-shale#ixzz1vtNe3K41
Read The Denver Post's Terms of Use of its content: http://www.denverpost.com/termsofuse

No Smoking Allowed......While Fracking That Is

Here is a "no-brainer" if there ever was one.  Let's not pollute the groundwater with....ummmm.....water........let's pump liquid gas down there.......under high pressure.....I'm not an engineer......or a rocket scientist.........but gas.......and high pressure........and machinery........and sparks.......well.....I have had a gas barbecue grill........and I have singed my hair a few times....and it scares me.  What do you think?  Water fracking or gas fracking?
Peter

Waterless fracking technique makes its debut in Ohio

>> By Anthony Brino • 5/15/2012 • 5 Comments

A GasFrac operation in Alberta (PR photo)

Some 8,000 feet deep and 450 million years old, the Utica Shale has a lot of petroleum — crude oil, natural gas and byproducts like ethane.
Although no one really knows how much there is, oil and gas companies are flocking to eastern Ohio, home to some of the shale’s most amenable portions.
“Right now we’re still in an exploratory phase,” said Brian Hickman, a spokesperson for the Ohio Oil and Gas Association.

It’s also an experimental phase for the technology that makes shale extraction possible, Hickman said. Companies that have used horizontal hydraulic fracturing successfully in the Marcellus, Barnett and other shales are still trying to figure out how to best use it in the Utica.

In Ohio, 65 Utica Shale wells have been drilled so far, each requiring 5 to 6 million gallons of water, said Heidi Hetzel-Evans, a spokesperson for the Ohio Department of Natural Resources.
But as Utica drillers analyze early results, at least one company thinks water might be unnecessary — or even a hindrance — and that using a waterless, propane-based form of fracking called LPG might be more efficient and profitable.

That currently unnamed company has asked GasFrac Energy Services to frack two Utica trial wells in Ohio using LPG, short for liquid petroleum gas. Founded in 2006 and based in Calgary, GasFrac is apparently the world’s only provider of LPG fracking and has used it about 1,200 times, mostly in western Canada and also in Texas and Colorado.

LPG uses a mixture of propane (and occasionally some butane) that’s pressurized to the consistency of a gel. Then, like water-based fracking, it’s injected through pipes at high pressure underground to release oil and gas by cracking open rocks using sand (or another proppant).
Unlike water, though, LPG naturally mixes with petroleum, so it returns to the surface with the oil or gas being extracted. And since LPG is electrically neutral and lacks much friction, it doesn’t dissolve any salts, heavy metals or radioactive compounds — compared to water, in which these things return to the surface and make a typically toxic mixture even more so.

Fracking, of course, is enormously controversial, mostly because of concerns of potential risks to water supplies. LPG fracking eliminates an entire wastestream — the copious amounts of toxic “flowback” water that has to be reused, treated and discharged into waterways, or disposed of in deep injection wells, which have been linked to earthquakes in Ohio.
But why would companies using hydro-fracking — which has proven to be pretty profitable — be interested in using a niche technology like LPG?

“I think the results they’re getting [in the Utica] are sub-par, and they’re looking for an alternative,” said Kyle Ward, GasFrac’s spokesperson.
GasFrac argues that LPG, compared to hydro-fracking, is both more environmentally sustainable and economically efficient in the the long run — a claim that has drawn some skepticism.
Terry Engelder, the Penn State University geologist who’s been dubbed the “Godfather” of the Marcellus Shale for his calculations of the rock layer’s natural gas potential, says water is the “mechanically most efficient fluid for breaking apart rock.”

Anthony Ingraffea, a Cornell University engineer who spent 20 years researching fracking for Schlumberger, one of the largest fracking companies, said: “I’ll give [GasFrac] credit that geochemically, it’s much better to use a hydrocarbon [propane and butane] to stimulate a reservoir…But I’m not sure how well this technique will work in a high volume long lateral shale formation [like the Utica or Marcellus shales] because they haven’t released proprietary data. That’s still unknown.”

Petroleum engineers in the 1960s and 1970s tried using propane fracking, but the potential for explosion — which is still a risk today, if better managed — left the technology uneconomical.
Last year, the petroleum giant Chevron used LPG to frack several natural gas wells in the Piceance Basin, home to several lucrative coal, oil and natural gas deposits in Colorado. The company’s annual report, while not mentioning GasFrac, noted that LPG “significantly increases production while minimizing water usage.”

The company BlackBrush recently announced a two-year contract with GasFrac in Texas’ oil-rich Eagle Ford Shale.
Offering an explanation for the dearth of public data on GasFrac’s work for other companies, Robert Lestz, the company’s chief tech officer, said, “Because our results our so superior to what people have done before, they’re not interested in sharing those results.”
In Ohio, GasFrac’s spokesman said the company hopes to start the Utica wells by the end of the month.

It could be a proving ground for the technology. “It’s no secret we’re going to the Utica,” Zeke Zeringue, GasFrac’s CEO, said in a May conference call. “Obviously we hope that leads to an establishment of some sort of base of operations.”
While GasFrac has been keen to note in its recent marketing efforts that LPG uses no water, the technology’s profitability will ultimately determine its potential, said Michael Mazar, a financial analyst who follows the company for BMO Capital Markets.
“The environmental benefits are secondary.”

CORRECTION: Because of an editor’s error, Robert Lestz was incorrectly identified as GasFrac’s founder in an earlier version of this story.
Portions of this story were originally reported for InsideClimateNews.
Anthony Brino is a Springfield, Illinois-based freelance writer whose work has appeared in The Allegheny Front, InsideClimate News and Illinois Statehouse News.

Tags: fracking, natural gas, Ohio

Comments (5)

Does anyone know if this new method of fracking also uses silica sand in the process?

By Loni Kemp on May 15, 2012

Interested to see how those wells to be fracked with LPG turn out. Do you know when drilling will start, if it hasn’t already?

By Joel Parshall on May 16, 2012

Either Devon or Range Resources is currently using the technology in the Ohio Utica shale. The gelled LPG can transport any kind of proppant whether sand or ceramic. No other additives are needed.

By Tom Pendergast on May 20, 2012

This company has drilled over 1500 wells with the propane process over the past 1 1/2 years. They drilled one well in central New York state and 2 demo wells in Texas. The original name for this company was Canadian Fracmaster. They have operated in the USSR to increase oil production from each well when fracing. Since propane is found mixed with methane and butane as natural gas.LPG does not pollute and when used for fracing by this company, all the propane is recovered when the combined gases are sucked out and sent to a refinery. More oil is also recovered from each well with this process, so in the long run, it saves money and time over any other process for recovering oil and gas from each well.

By MARk SMYTH on May 21, 2012

This seems like a good alternative to hydrofracking, however I wonder how they did on 1)Safety aspects of the 1500 wells fracked 2)Contamination of surface waters by gel. 3)in terms of $$, how does GasFrac compare with hydrofracking.

By Ajaz on May 22, 2012