Shale Gas Exploration And Development Goes International

It is no surprise to this geologist that the technology used to produce gas from the Fort Worth Basin and its Barnett Shale is finding its way to other parts of the world.

Shale, that often organic-rich, dark gray or black, very fine grained sedimentary rock, is found in every sedimentary basin, both present and ancient, on Earth. It is sometimes called "mud-rock" as is appropriate to its origin.

The organic matter in these shales can be converted into oil and natural gas as it is heated and buried by thousands of feet of additional sediments. The fact that these rocks contain a flammable gas (natural gas) has been known since antiquity. However, from an economic standpoint, shale has mostly just been considered a "source" rock for oil and gas found elsewhere. Times have changed.

Now shale can be considered a source, seal, trap, and reservoir of gas, (and sometimes oil) --- an all in one package. With the proper combination of horizontal drilling and rock fracturing technology these shales can produce very economic quantities of gas. This has been proven in the Barnett Shale in north Texas, and to a lesser, but growing extent elsewhere. Since shales of this nature are so prevalent around the world, it makes sense that the combination of horizontal drilling, the logging and steering of these wells while drilling, and the fracture treatment of the rocks is finding its way to countries outside of the United States.

Natural gas has many uses, from generating electricity, to heating our homes, cooking our food and powering our vehicles. It burns very cleanly and its only by-product is harmless water vapor and carbon dioxide. If it were not so clean, how could we use it in our homes to cook our food? Are you listening EPA?

If President Obama was really interested in stimulating the economy he would be promoting the production and more widespread use of natural gas. Maybe his advisers are just ignorant of the facts. It certainly makes far more sense to use inexpensive and ubiquitous natural gas than it does to spend Billions on solar panels and wind turbines, which can never do more than supply a fraction of our energy needs.

If anyone doubts the jobs, equipment and technology required to drill and produce gas from these shales, they should visit an active drill site, or witness a frac job. They should also consider that for every person working in the field, there are probably tens or hundreds of people working behind the scenes. It is a big and growing business. Browse this blog and you will find many, more relevant articles and information on this subject. Pass it around. Send it to your Congressman. Send it to Mr. Obama.

The following article from the "Fort Worth Star-Telegram" tells more of the story.
Peter

Barnett Shale seen as model for drillers worldwide

Posted Tuesday, Sep. 29, 2009 (source)

By JACK Z. SMITH

jzsmith@star-telegram.com

The search for unconventional natural gas deposits in areas like the Barnett Shale of North Texas not only is dominating gas drilling in the United States, but it will also become pervasive worldwide.

That was the message given Tuesday by two experts at the opening of a three-day energy conference in the Fort Worth Convention Center.

"I think unconventional gas is the future, both in the U.S. and overseas," said Vello Kuuskraa, president of Advanced Resources International, known for his work in energy economics and petroleum recovery technologies.

Unconventional gas includes shale gas, tight gas and coal-bed methane, deposits that require measures such as horizontal drilling and hydraulic fracturing to enhance their recovery and make them economically feasible.

Unconventional gas accounts for more than half of U.S. production, Kuuskraa said, even though what he called two new "rock stars" among shale fields — the Haynesville Shale in northwest Louisiana and East Texas, and the Marcellus Shale in the Appalachian region of the eastern United States — are just beginning to be significantly developed.

Meanwhile, Kuuskraa said he expects his end-of-the-year calculations to show that the Barnett Shale has become the biggest gas-producing area in the U.S., outstripping the San Juan Basin in New Mexico and Colorado.

The U.S. is leading the way in the search for unconventional gas, and developing the technology that will "be used around the world," said Stephen Holditch, head of the petroleum engineering department at Texas A&M University and former president of the Society of Petroleum Engineers-International.

Oil and gas exploration and production companies either based in North Texas or with substantial operations in the region are in the thick of the search for unconventional gas.

That includes three Fort Worth-based companies, XTO Energy, Range Resources and Quicksilver Resources; two Oklahoma City-based companies, Devon Energy and Chesapeake Energy, the top two Barnett Shale producers; and Irving-based Exxon Mobil Corp., which is drilling for unconventional gas everywhere from Colorado to Hungary.

Kuuskraa said Exxon Mobil is said to have gotten encouraging results from initial drilling in the Mako Trough in Hungary.

There are reportedly "massive concentrations" of gas — estimated at 700 billion cubic feet per square mile — in a small area of the Eastern European nation, he said.

Future unconventional gas recovery worldwide could significantly expand supplies, which would help make gas increasingly attractive as a fuel for transportation and electric power generation, Kuuskraa forecast at the Unconventional Gas International Conference & Exhibition, which resumes today.

JACK Z. SMITH, 817-390-7724

Marcellus Shale Gas Play: Part 4

Too often "regulation" means strangulation to resource development. Of course we must do as little harm to our environment as possible. Of course we must improve our civil and social structure. There has to be a balance, but we can do it. It has been done. It is being done. It can be done if government doesn't over-regulate and tax the industry to death.

How much regulation is too much? Read the following article to get an idea of how complex this regulation gets and how easy it is to kill development rather than encourage it.

Look to Texas, visit Ft. Worth, look at the Barnett Shale example. Ask people in Louisiana if they like the Haynesville Shale Gas Play. Look at the Bakken Play in the Williston Basin of eastern Montana and western North Dakota. Let's keep our energy dollars in America.

Peter

Regulating Natural Gas Exploration
Regulating the expanding gas industry is a central
concern for government agencies. It is important to
remember that in addition to the social and economic
changes that may accompany drilling there is the
possibility of significant impacts on the environment
and natural resources.

Several principal state and
federal groups are involved in regulating natural

gas exploration in Pennsylvania, including two state
agencies and two commissions created by federal
regulations: the Department of Environmental
Protection (DEP), the Department of Conservation
and Natural Resources (DCNR), the Susquehanna
River Basin Commission (SRBC), and the Delaware
River Basin Commission (DRBC). Each of these
groups derives its regulatory authority from various
sources, including state statutes and federal regulations.
In addition, several other state agencies affect
natural gas activity.

Role of the Department of Environmental Protection (DEP)
The Pennsylvania Department of Environmental
Protection enforces Pennsylvania’s oil and gas laws
relating to resource management, well construction
activities, and waste management practices. The
DEP’s Bureau of Oil and Gas Management is
responsible for the statewide oil and gas conservation
and environmental programs. The bureau facilitates
the exploration, development, and recovery of Pennsylvania’s
oil and gas reservoirs in a manner that
is intended to protect the Commonwealth’s natural
resources and the environment. It also develops
policy and programs for the regulation of oil and gas
development and production in accordance with the

Oil and Gas Act, the Coal and Gas Resource Coordination
Act, and the Oil and Gas Conservation Law;
it oversees the oil and gas permitting and inspection
programs, develops statewide regulation and
standards, conducts training programs for industry,
and works with the Interstate Oil and Gas Compact
Commission and the Technical Advisory Board.

An operating gas company must secure a bond
before applying for a well permit. It is DEP’s
responsibility to approve bonds and well permits,
inspect wells and environmental controls, and permit
and inspect waste disposal facilities and waste
management activities. Operators must submit reports
on well completion, waste management, annual
production, and well plugging.

Well operators are
required to report production annually, and state
agencies must keep this information confidential
for five years, except for enforcement proceedings,
as provided in the Oil and Gas Act. DEP has the
authority to take action to enforce compliance
with applicable laws and to seek civil penalties for
violations of these laws. Depending on the project’s
acreage, the local county conservation district may
also play an important role in regulating construction
activities relative to erosion and sedimentation control.

Municipalities can be alerted regarding well
permit applications filed with DEP though a no-cost
subscription service called ENotice.

ENotice notifies
municipalities with an e-mail when a well permit
application is received. This system enables municipalities
to receive notice of a permit application at
the same time that DEP receives the application. This
will allow the municipality to obtain information
about potential drilling activity much earlier in the
process so bond requirements can be considered
in advance of operations. ENotice can be accessed
through DEP’s Web site: http://www.depweb.state.pa.us/.

Role of the Department of Conservation and Natural Resources
The Department of Conservation and Natural
Resources has authority under the Conservation
and Natural Resources Act to lease state forestland
for natural gas exploration. The act also gives the
department the ability to lease state forestlands for
underground storage of natural gas—a practice
currently less common in Pennsylvania than in other
areas of the country. The Oil and Gas Lease Fund
stipulates that all rents and royalties from these leases
are to be placed in a fund used exclusively for conservation,
recreation, dams, or flood control or used to
match any federal grants for those purposes.

Thumbs up for creating jobs.

Role of the Susquehanna River Basin
Commission (SRBC) and Delaware River Basic
Commission (DRBC)
The DRBC and SRBC hold more influence than
the DEP in regulating water usage and other waterrelated
aspects of gas well drilling that fall under
their jurisdiction. SRBC’s regulations are intended to
protect the environment and existing water users from
unapproved water use and water-use conflicts. The
agency regulates issues such as water withdrawals,
deep well injection of fracing waste fluids, and
disposal of fracing fluids from constructed lagoons.
In cooperation with the DEP the DRBC will also
investigate and manage situations in which drilling
damages neighboring wells. Companies operating
without prior water-use approval for drilling and
other water-related activities will be considered in
willful noncompliance if they continue to operate
after receiving the distributed notice sent out in early
June 2008.

This consumptive water use is regulated in several
different ways. Consumptive use in gas drilling is
considered any water that is used in a way that results
in it not being returned to the basin. An example
is the injection of waste fluids into a subsurface
formation where it would not be reasonably available
for future use or any diversions of water out of the
Susquehanna watershed. These consumptive uses are
defined in regulations through volume over a certain
period of days.

SRBC also has the authority to make an across the-
board determination that well development
activities in the Marcellus shale formations may
require approval regardless of the amount of water
used. The SRBC can exercise this broad authority if
it determines that the water-use activities may affect
interstate water quality, have a significant effect on
SRBC’s Comprehensive Plan, or have an adverse,
cumulative, or interstate effect on the basin’s water
resources.

Land situated outside the basin commissions’
boundaries, such as in southwest Pennsylvania, are
solely under the regulatory authority of DEP and are
not monitored or regulated by a basin commission.

A pipeline through the forest. Some disruption is inevitable.

Role of the Fish and Boat Commission
The Fish and Boat Commission’s responsibility is to
preserve and protect the Commonwealth’s aquatic
resources while providing fishing and boating opportunities.
Their water quality officers work closely
with DEP field personnel to monitor the impacts of
drilling and other activities on stream quality and
aquatic life, and offer input to DEP on regulatory
decisions.

Role of the Pennsylvania Emergency
Management Agency (PEMA)
The Pennsylvania Emergency Management Agency
coordinates state agency response to emergencies
or disasters. The agency supports county and local
governments in the areas of civil defense, disaster
mitigation and preparedness, planning, and response
to and recovery from human-made or natural
disasters. PEMA is an important resource for local
governments adapting to the changing emergency
management needs arising from increased natural gas
exploration and drilling, and can provide training,
information, and resources to local emergency
responders.

If emergencies occur, the local municipality
should engage the local Emergency Management
Team prior to and during the response. The municipality
should have the site(s) listed in its Municipal
Emergency Operations Plan, including emergency

contact information. It is important that the municipality
has accurate information regarding the precise
location of the site in terms of GPS coordinates and
can identify the closest access road(s). The municipality
should also encourage the posting of signs
that list the name of the site operator, the address of
the actual site, the emergency contact number of the
company, and any additional information.

The type of roadways or access ways to a site may
make it difficult for standard firefighting, rescue, and
emergency medical services vehicles to access. These
vehicles may not have sufficient ground clearance
to traverse the roadways. Fire and rescue services
should be aware of the areas and test-drive the access
roads to ensure that the vehicles can gain access to
sites.

Additionally, sites may be in rural or extremely
rural areas and could be thousands of feet from any
inhabited structures. Despite remote locations, the
emergency plans and site plans should still include
the identification of the nearest inhabited structures
and list the distance and direction. Other structures,
facilities, and chemical or hazardous material sites
should also be listed.

Even though large quantities of chemicals are
not found on the well sites, the municipality and
the county Local Emergency Planning Committee
(LEPC) should be informed of the number, names,
and quantities of chemicals stored or used at the
site(s). The county LEPC and the Pennsylvania
Department of Labor and Industry PENNSAFE
Program are able to provide assistance and guidance.

Role of Pennsylvania Oil and Gas Act
The ability of municipalities to regulate natural gas
exploration is limited by the Oil and Gas Act, which
states that “no ordinances or enactments, adopted
pursuant to the aforementioned acts shall contain
provisions which impose conditions, requirements or
limitations on the same features of oil and gas well
operations regulated by this act.” Essentially, this
statutory provision means that the Oil and Gas Act
preempts a municipality or county from regulating
a matter that has been addressed in the act. As of
August 2008, the precise extent of the Oil and Gas
Act’s preemption of local regulation is not clear, as
there are two cases on this issue pending before the
Pennsylvania Supreme Court. Each of these cases
was appealed to the Supreme Court following a
Commonwealth Court decision ruling that the Oil and
Gas Act had preempted the municipal ordinance in
question.1

In light of pending Supreme Court cases, a municipality
should determine the current state of the law
before enacting an ordinance that will be regulating
natural gas drilling operations. A municipality also
should consult the Oil and Gas Act to determine the
specific issues that are the subject of state regulation.
The Oil and Gas Act addresses topics including
well permitting, well registration and identification,
well location, well site restoration, protection of
water supplies, bonding, reporting requirements, gas
storage, inspection of facilities and records, public
nuisances, enforcement orders, and civil penalties.

1 Great Lakes Energy Partners v. Salem Township, 931 A.2d
101 (Pennsylvania Commonwealth Court 2007); and Huntley &
Huntley, Inc. v. Borough of Oakmont, 929 A.2d 1252 (Pennsylvania
Commonwealth Court 2007).

Is Shale Gas Still "Unconventional"?

The following article comes from the AAPG Explorer, November 2008. Of particular note in the discussion of the factors important to finding and producing this "shale gas", is a lack of a mention of the importance of actually drilling, or steering one of these "horizontal wells". This must be addressed and it is not as simple as it might seem. I hope to discuss this more in the future.
Peter

Understanding gains on ‘new’ reservoir
Shales Closing ‘Conventional’ Gap (source)
At what point do unconventional resources become conventional resources?
If this is possible, gas shales are certainly closing the gap.

Even though operators have produced gas from shales since the first shale-gas well in the organic-rich Dunkirk Shale (Devonian) in New York in 1821, the recent interest in gas shales began in 1981 with the first Barnett Shale well, drilled in the Fort Worth Basin in northern Texas by Mitchell Energy Corporation. Gas shales have advanced to an economic gas play since the year 2000 thanks to a combination of high gas prices, shale reservoir characterization and advances in drilling and completion technology.

The sheer number of articles and conferences describing gas-shale plays in the United States and Canada attests to the high interest level.
As for importance, the Barnett Shale alone supplies about 7 percent of the United States’ annual dry-gas production.

The Marcellus Shale has helped raise the interest in shale plays.
Note the accompanying alphabetical list of many of the United States and Canada gas-shale plays in the news.

Gas shales span reservoir ages of Cambrian to Miocene, and shale formations such as the Barnett, Fayetteville and Woodford have become household names.
Some long-producing shales such as the Antrim, Huron and New Albany are seeing renewed interest – and the Haynesville Shale in Louisiana and Marcellus Shale in the Appalachian states are being compared to the Barnett Shale as the next big plays.
(The Late Devonian-Early Mississippian Bakken Shale in the Williston Basin is not on the list because it is primarily an oil play.)

Early lessons learned and shared concerning how to produce gas from shales have drastically shortened the learning curve when exporting the technology to new shale-gas plays.
One of these lessons was the importance of fractures (natural and induced) for gas production while avoiding fracture propagation into water-bearing formations with the occurrence of shale or carbonate fracture barriers.

Hydraulic slick-water fracturing and re-fracturing were the initial keys to completing the tight-shale reservoir. Today, horizontal wells – first applied to shales in 2003 – are now routinely applied to expose more of the shale to the well bore and use the shale boundaries as fracture barriers.

Recent technological advances applied to horizontal wells in shales include:
3-D seismic in determining lateral length and placement.
Multilaterals (drilling several laterals from a single well pad).
Multiple frac stages within a lateral.
Real-time microseismic monitoring to image hydraulic-fracture treatments.
Simul-fracs (simultaneous hydraulic fracturing of offset parallel horizontal wells about 1,000 feet apart).

Seismic is playing an increasing role in shale gas appraisal and development. In addition to imaging the basic structural geometry and faults, multi-trace attributes such as coherence and volumetric curvature are being used to detect smaller-scale faults, areas of more intense fracturing and collapse features such as sinkholes.

Of course, not all organic-rich shales will be economic gas shales, even with the application of innovative completion technology. What was once thought of as a hydrocarbon source rock or cap rock must now be evaluated as a gas reservoir.

Also, it is not enough to have a thick, organic-carbon rich black shale in the gas window. Other factors such as mineralogy (e.g., clay content and types) and petrographic properties (e.g., silt stringers, laminae, bitumen network) are important to produce gas from shales.
Fortunately, research on petrophysics, geomechanics and geochemistry conducted at universities, service companies and consortia is advancing our understanding of shales as reservoirs.

Much has been learned about how to evaluate shale as a gas source rock and reservoir. Some remaining questions include:
What is the optimum range of thermal maturity?
How low or high of thermal maturity is too low or too high?
What depth is too shallow or too deep to be economic?
How important is reservoir pressure?

Energy Minerals Division members have access to the EMD members-only Web site, which has semiannual gas-shale reports, a calendar of gas-shale conferences, an extensive list of published gas-shale literature, presentations, online reports, Web links and short course notes.
Check it out – and please let me know if you have suggestions on additions to the EMD Gas Shales Committee Web site.

United States and Canada Gas-Shale Plays
Antrim (Late Devonian; Michigan Basin, Michigan)
Baxter (Late Cretaceous; Vermillion Basin, Colorado, Wyoming)
Barnett (Mississippian; Fort Worth and Permian basins, Texas)
Bend (Pennsylvanian; Palo Duro Basin, Texas)
Cane Creek (Pennsylvanian; Paradox Basin, Utah)
Caney (Mississippian; Arkoma Basin, Oklahoma)
Chattanooga (Late Devonian; Alabama, Arkansas, Kentucky, Tennessee)
Chimney Rock (Pennsylvanian; Paradox Basin, Colorado, Utah)
Cleveland (Devonian; east Kentucky)
Clinton (Early Silurian; east Kentucky)
Cody (Cretaceous; Montana)
Colorado (Cretaceous; central Alberta, Saskatchewan)
Conasauga (Middle Cambrian; Black Warrior Basin, Alabama)
Duvernay (Late Devonian; west central Alberta)
Eagleford (Late Cretaceous; Maverick Basin, Texas)
Ellsworth (Late Devonian; Michigan Basin, Michigan)
Excello (Pennsylvanian; Kansas, Oklahoma)
Exshaw (Devonian-Mississippian; Alberta, northeast British Columbia)
Fayetteville (Mississippian; Arkoma Basin, Arkansas)
Fernie (Jurassic; west central Alberta, northeast British Columbia)
Floyd/Neal (Late Mississippian; Black Warrior Basin, Alabama, Mississippi)
Frederick Brook (Mississippian; New Brunswick, Nova Scotia)
Gammon (Late Cretaceous; Williston Basin, Montana)
Gordondale (Early Jurassic; northeast British Columbia)
Gothic (Pennsylvanian; Paradox Basin, Colorado, Utah)
Green River (Eocene; Colorado, Utah)
Haynesville/Bossier (Late Jurassic; Louisiana, east Texas)
Horn River (Middle Devonian; northeast British Columbia)
Horton Bluff (Early Mississippian; Nova Scotia)
Hovenweep (Pennsylvanian; Paradox Basin, Colorado, Utah)
Huron (Devonian; member of Ohio Shale; east Kentucky, Ohio, Virginia, West Virginia)
Klua/Evie (Middle Devonian; northeast British Columbia)
Lewis (Late Cretaceous; Colorado, New Mexico)
Mancos (Cretaceous; San Juan Basin, New Mexico, Uinta Basin, Utah)
Manning Canyon (Mississippian; central Utah)
Marcellus (Devonian; New York, Pennsylvania, West Virginia)
McClure (Miocene; San Joaquin Basin, California)
Monterey (Miocene; Santa Maria Basin, California)
Montney-Doig (Triassic; Alberta, northeast British Columbia)
Moorefield (Mississippian; Arkoma Basin, Arkansas)
Mowry (Cretaceous; Bighorn and Powder River basins, Wyoming)
Muskwa (Late Devonian; northeast British Columbia)
New Albany (Devonian-Mississippian; Illinois Basin, Illinois, Indiana)
Niobrara (Late Cretaceous; Denver Basin, Colorado)
Nordegg/Gordondale (Late Jurassic; Alberta, northeast British Columbia)
Ohio (Devonian; Appalachian Basin, east Kentucky, Ohio, West Virginia)
Pearsall (Cretaceous; Maverick Basin, Texas)
Percha (Devonian-Mississippian; west Texas)
Pierre (Cretaceous; Raton Basin, Colorado)
Poker Chip (Jurassic; west central Alberta, northeast British Columbia)
Queenston (Ordovician; New York)
Rhinestreet (Devonian; Appalachian Basin)
Second White Speckled (Late Cretaceous; southern Alberta)
Sunbury (Mississippian; Appalachian Basin)
Utica (Ordovician; New York, Quebec)
Wilrich/Buckinghorse/ Garbutt/Moosebar (Early Cretaceous; west central Alberta, northeast British Columbia)
Woodford (Late Devonian-Early Mississippian; Oklahoma, Texas)

What Is The Barnett Shale Gas Play In Texas?

The Barnett Shale Gas Play in north Texas is the real deal. It is producing a LOT of natural gas and is a true economic "bonanza" for the region. It would not be possible without the new technology of horizontal drilling and the ability of geologists and engineers to interpret the data coming from these directionally drilled wells. Of course other advances in drilling technology and completion techniques play an extremely important role as well.

Do we in America want to become energy independent? Do we want to create jobs and keep our money here in America? Of course we do. Then it seems obvious we should encourage more drilling and production of clean burning natural gas from formations like the Barnett Shale. More on this idea will follow in future posts.
Peter


The Barnett Shale Gas Boom
Igniting a Hunt for Unconventional Natural Gas Resources

Marc Airhart, Jackson School of Geosciences, The University of Texas at Austin

The global hunt for unconventional gas reserves recently turned to an unlikely spot—a patch of north central Texas that already seemed tapped out after 50 years of intense oil and gas drilling.
Technology, economics and one man’s persistence transformed the Barnett Shale formation of the Fort Worth Basin into a booming new frontier.

(Map showing the approximate location of the Barnett Shale Gas Play in north Texas.)


Barnett Shale gas is the largest play in the State of Texas. © iStockphoto / Jim Parkin
In less than a decade, the Barnett Shale play has become the largest natural gas play in the state of Texas and, as new wells sprout like bluebonnets across the Fort Worth region, it might soon become the largest in the nation. Click to enlarge.

As conventional petroleum reserves dwindle in the U.S., public pressure mounts to reduce the country’s dependence on foreign energy, and the price of oil and gas rises, energy companies are setting their sights on “unconventional” domestic sources. These include oil sands, coal beds and shales.

In less than a decade, the Barnett Shale play has become the largest natural gas play in the state of Texas and, as new wells sprout like bluebonnets across the Fort Worth region, it might soon become the largest in the nation.

“This play already covers parts of 15 or more counties,” says Eric Potter, associate director of the Bureau of Economic Geology at the University of Texas at Austin. “It compares favorably with the biggest of the old oil booms of the early 20th century.”

Of course this boom is different. The concrete-like shale gives up its gas grudgingly. So individual wells tend to be smaller and more expensive to operate.
“The East Texas gushers would win out hands down,” says Potter. “But there are so many [Barnett] wells that even though they are modest, the total output is going to be huge.“
This play is also different because much of the untapped gas lies under the highly populated Fort Worth metropolitan area. Oil and gas companies are finding new challenges drilling in an urban setting.

Now, some experts are wondering if the boom can go global. The search is on for similar shale formations around the world, including the Fayetteville Shale in Arkansas.

Going to the Source
The fact that there is a Barnett boom at all reflects a tectonic shift in thinking. In the past, drillers bypassed the source rock that generated the oil and gas and focused on the reservoir rock, where the resources were easier to extract. Typically, oil or gas exits from the source rock and migrates to places where it is trapped. And those traps—conventional fields—typically do not cover a large area.

“There would be a field here and then a lot of blank space and then a few miles over there would be another field,” says Potter. “But this kind of play, it just covers county after county. You’re looking at thousands and thousands of wells covering the land.”
With new technologies for coaxing gas out of shales, drillers see the Barnett as both source and reservoir. One such technology is artificial fracturing—in which operators pump water and sand down a well to create fractures that liberate more gas from the rock.

Potter and his colleagues at the Bureau are analyzing the properties of shales across the state. Ultimately, they hope to apply their work to similar rock formations anywhere in the world.
“Now any kind of mudrock or shale that’s black, organic rich, reasonably thick, and reasonably deep we’re interested in,” says Potter. “The question is, all shales are not alike, so what makes a shale prospective as opposed to one that is not prospective? We don’t really know that yet.”

Play Money
Before he died in 2003, oilman and philanthropist John Jackson donated to The University of Texas at Austin royalty interests in roughly a thousand wells in the Fort Worth Basin, part of the bequest that led to the formation of the Jackson School of Geosciences. These wells were producing oil and gas from the younger Bend Conglomerate formation just above the Barnett.
The Bend Conglomerate was formed during the Pennsylvanian age, meaning it was laid down about 290 to 320 million years ago. The Barnett Shale, a marine basinal deposit of middle to late Mississippian age, was laid down about 320 to 360 million years ago.

Could the same wells produce significant amounts of gas from the older, deeper Barnett shale? Potter and his colleagues at the Bureau helped the University assess the long-term potential of the University’s royalty interests.

“The short answer is that we think that most of that acreage has quite good potential in the Barnett,” says Potter. “Eight of the top ten Jackson School royalty wells are producing from the Barnett Shale. We are forecasting that most of these holdings will produce from the Barnett.”
The University receives on average about two percent of the gross revenue from wells it holds royalty interests on. That money is being used to build one of the world’s premier geosciences programs at the new Jackson School. Because the money goes into general funds, it supports all of the activities of the school, including dean Eric Barron’s priorities: to create the world’s most student-centered earth science program, to attract and retain the best research talent, to increase the breadth and depth of the faculty and research community and to establish the “fabric of a great school.”

Researchers at the Bureau are providing technical analysis to help stimulate additional drilling and production in Wise County, where most of the University’s royalty interests are located. Emphasis so far has been on mapping the basic stratigraphic and structural framework, tracking successful drilling in the less developed southern part of the play, mapping similar conditions in Wise County, and remapping the thermal maturity of the formation. The maturity seems to relate directly to the gas to oil ratio, one of the key factors controlling gas flow rates.

According to Potter, the 5,500 wells currently pumping gas in the Barnett Shale play will ultimately generate on the order of $35 billion for their owners. As those companies pay taxes and wages, and as their employees and contractors in turn spend their money, there is an economic ripple effect, creating an overall value of about $100 billion to the Texas economy.

Graph showing yearly production of gas from the Barnett Shale in the Fort Worth Basin in BCF,

(Billion Cubic Feet).

Of course, that is only counting current wells. Potter predicts that if gas prices stay relatively high, tens of thousands of new wells will be drilled in the coming decades.

“It’s a ubiquitous reservoir,” says Larry Brogdon, partner and chief geologist for Ft. Worth based Four Sevens Oil Company. “It’s everywhere. You can not drill a well without hitting the Barnett, and the gas is always there. The question is can you get it out or not.“
So far, operators have extracted 2 trillion cubic feet of gas from the Barnett Shale play. At about 1.5 billion cubic feet a day, that’s about 2 percent of the daily natural gas consumption of the U.S.
“When you can go from nothing to the second largest producing gas field in the country in a matter of just a few years, that makes a statement,” says Rich Pollastro, a geologist with the U.S. Geological Survey in Lakewood, Colorado. “That’s huge. And it could potentially become the largest producing field in the country. That was a real awakening for the country and now because of its success, industry and nations are looking at it worldwide.”

Map showing the extent of the Barnett Shale in Texas (shown in orange).

The Next Barnett
In the summer of 2004, Southwestern Energy announced that the Fayetteville Shale formation in the Arkoma Basin had many of the same characteristics that made the Barnett Shale formation so desirable for gas production. Before the announcement, the company had quietly acquired mineral leases on nearly a half million acres of land.

The announcement set off another gas boom. Oil and gas operators familiar with the Barnett Shale rushed to Arkansas to get in on the action.
“The analog would be like a 19th century gold rush,” says Ed Ratchford, geology supervisor for the Arkansas Geological Commission in Little Rock. “Everyone stakes a claim. You don’t say this place is going to be better than this place. You don’t have time. People were leasing thousands of acres a day.”

Ratchford and his team maintain a well log library, a collection of well cuttings and cores from oil and gas wells across Arkansas. They used these to conduct geochemical tests on samples from the Fayetteville Shale and produce a regional picture of where good gas prospects were likely to be.

“We had companies all over us waiting for us to get this stuff done,” says Ratchford. “They were sitting out in the parking lot before we opened up. We were the only ones that had this information. It was critical for helping the operators know where to lease.”
In the excitement, many companies took a gamble on mineral leases.
“We had a lot of companies that had leased before the report came out,” says Ratchford. “Then they had a big golf ball in their throats saying, ‘I wish I hadn’t leased here.’ That’s the risk you run when you lease big tracts of land in a boom without having the luxury of doing the science first.”

“Some of those companies are going to make a lot of money,” notes Ratchford, “some are going to be doing tax write offs. That’s the nature of exploration. In a situation like this, where there’s a frenzy, there are going to be winners and losers.“
It’s too early to tell how much gas will ultimately be recoverable from the Fayetteville Shale. Southwestern Energy, still the largest lease holder in the play, estimates that they will recover 17 trillion cubic feet of gas.

The future looks good for the Fayetteville play. Ratchford expects the number of wells producing in the area to rise from the current 80 to a couple hundred and that gas will be extracted for at least 15 or 20 years.

He also notes that oilfield services provider Schlumberger has recently built a 30,000 square foot facility in Conway, Arkansas and will employ approximately 100 employees at that facility. “They would not do this if they didn’t believe this would be a long term venture,” says Ratchford.

Other areas that have generated interest for possible large shale gas plays are the Caney and Woodford formations in Oklahoma, the Floyd formation in the Black Warrior Basin of northwest Alabama, and the Barnett and Woodford formations in the Permian Basin of Texas.
It remains to be seen if the rising star of the Barnett Shale play will be eclipsed by other gas plays.

“The Barnett might be as good as it gets,” says Pollastro. “No one knows for sure.”
He produced the U.S. Geological Survey’s assessment of the Fort Worth Barnett shale play in 2003. At the time, he estimated that it held a remaining volume of 26 trillion cubic feet of recoverable unconventional gas. Now he’s evaluating the Barnett and Woodford formations in the Permian Basin, where drillers have experienced mixed results.

“It’s a different animal,” he says. “The Barnett in the Delaware Basin part of the Permian Basin is deeper and is more clay rich, so at present it’s not working like everybody thought it would. It’s not as rich in organic material as the Fort Worth Basin. I think there’s good potential, but I think there will be a steep learning curve.”

For more information about the Jackson School contact J.B. Bird at jbird@jsg.utexas.edu, 512-232-9623 - or visit their website.