Great Economic News From Shreveport, Louisiana (Courtesy of the Haynesville Shale Gas Play)

More good news is the Haynesville Shale Gas Play is having very strong positive economic effects in the Shreveport area of northwestern Louisiana. This is not pie-in-the-sky, wishful thinking for creating jobs and energy supplies, such as windmills and solar farms. This activity is not a government "make-work" project. This is the real deal.

Shale gas is an available resource being exploited using existing technology. We need this kind of good economic good news in America, badly. Someone should invite President Obama down to Shreveport and give him a tour.
Peter

July 1, 2009 Shreveport-Bossier among best for a fresh start, Web site says By Curtis Heyen cheyen@gannett.com (source) Shreveport-Bossier City has been ranked 15th among the top 20 places in the U.S. to begin a new career or a new life, according to the Web site BusinessWeek.com. The Web site cites Shreveport-Bossier City for having a low cost of living and seeing new jobs coming from the natural gas industry and the movie business. The listing reinforces what local leaders have believed for a long time, said Kurt Foreman, president of the Northwest Louisiana Economic Development Foundation. "We certainly feel like this is a great place to start over, build a business or grow a career. "I'm pleased that these national magazines are seeing what we have seen for a long time." The recession has not negatively impacted Shreveport-Bossier City as much as other parts of the nation, Bossier City Mayor Lo Walker said. "We do have job opportunities. ... We've had a net increase in population and jobs. "This news can only encourage people to be more receptive to coming to this region." The BusinessWeek.com article notes that a number of movies, among them "W.", include scenes filmed in Shreveport and the surrounding area. In fact, Oliver Stone shot most of his movie in Shreveport. Another example not noted by the Web site is "Year One," which was filmed near Sibley and on a Shreveport soundstage. That moving, starring Jack Black, opens in theaters today. But the local film industry has slowed significantly this year. The next major project is "Straw Dogs," a Sony Screen Gems picture slated to begin filming here this summer. On the other hand, interest in the Haynesville Shale in northwest Louisiana continues to fuel employment in the region. The natural gas formation, trumpeted as perhaps the largest in the nation, has pumped millions of dollars into some property owners' pockets -- including local governments -- since the discovery was announced in April 2008. A recently completed economic impact study estimates Haynesville Shale activity created about 32,742 jobs, about $2.4 billion in business sales statewide and nearly $3.9 billion in household earnings, including almost $3.2 billion in lease and royalty payments to private landowners, in 2008. Topping BusinessWeek.com's list is the Anchorage, Alaska, metropolitan area. Also among its top five are Provo-Orem, Utah; Kennewick-Richland-Pasco and Yakima, both in Washington; and Omaha, Neb.-Council Bluffs, Iowa. The Web site ranked metropolitan areas based on the percentage of companies planning to hire in the third quarter, according to a survey by Milwaukee staffing firm Manpower of 28,348 U.S. employers that was conducted April 6-29. Businessweek.com says it eliminated Barnstable, Mass. (Cape Cod), which would have topped the list, because the surge in expected hiring in the next quarter is likely due to seasonal hires. In cases where areas have equal percentages of companies planning to hire, the Web site says, the unemployment rate was used to break the tie. The best job prospects for each area also were pulled from the same survey. Home prices used for the BusinessWeek.com's list were provided by Zillow.com, 2008 population is based on U.S. Census Bureau data, and the March unemployment rate comes from the U.S. Bureau of Labor Statistics.

Canadian Companies Prefer Drilling In U.S.

Here is another oddity. The Canadian Government is in effect subsidizing companies to produce gas in Canada, while one Canadian comany, EnCana, plans to spend $290 million in the Haynesville Shale Gas Play in northwestern Louisiana while cutting its drilling activity elsewhere.

Someone should tell the Obama Administration there is a shale gas "boom" going on in the U.S. Developing this resource can create jobs, increase revenue to State, Local, and the Federal Governments. The pipelines are there, the drilling rigs are there, the technology exists, the trained workers are there, ready to go. Mr. Obama, what are you waiting for?

This natural gas can be used to power buses, trucks and cars. It will reduce America's dependence on foreign oil, and last but not least, it will pacify some environmentalists because it is a "clean" source of energy.
Peter

Alberta Extends Natural-Gas Incentives to Compete With Shale

By Gene Laverty (source)

June 25 (Bloomberg) -- The province of Alberta, the biggest foreign supplier of natural gas to the U.S., said it will extend by one year incentives to boost drilling for the fuel to make it more competitive with U.S. shale gas deposits.

The province will charge producers a flat rate of 5 percent during the first year of output from new wells, a government statement said. Drillers will also receive a royalty credit of C$200 ($172.64) for each meter (3.28 feet) of new well depth drilled.

The programs had been set to expire in March 2010, Energy Minister Mel Knight said in the statement. They will be extended to March 2011.

Companies including EnCana Corp., the nation’s biggest gas producer, are shutting wells amid a 70 percent decline in New York gas futures in the last year. Companies are using new methods to tap gas large gas deposits trapped in shale in Texas and Louisiana that are closer to U.S. consuming regions. Calgary-based EnCana plans spend $290 million on its Haynesville Shale properties this year while slashing drilling in other regions.

To contact the reporter on this story: Gene Laverty in Calgary at glaverty@bloomberg.net.

The U.K's BG Buys A Stake (From EXCO) In The Haynesville Shale Gas Play

This is good news for those of us in the service sector who depend on drilling activity. It is also good to have foriegn money coming into the U.S and creating jobs. The price this U.K. natural gas company is paying to enter the Haynesville Shale Gas Play may seem steep, but they are surely counting on the price of gas and leases to increase.

Also, and not insignificantly, they're paying for the science and technology that has been developed to extract this "unconventional" source of gas. By this I mean primarilly horizontal drilling and hydraulic fraturing. This would also, I hope, include the "steering" of these horizontal wells into the optimum stratigraphic layers of rock.
Peter


BG Buys Exco Stake for $1.06 Billion to Tap Shale Gas (Update3)

By Eduard Gismatullin

June 30 (Bloomberg) -- BG Group Plc, the U.K.’s third- largest natural-gas company, bought assets from Exco Resources Inc. for $1.06 billion to develop its first U.S. shale gas project. Exco shares rose 16 percent.

BG Group acquired a 50 percent stake in 120,000 net acres in East Texas and northern Louisiana, the company said today in a statement. The purchase includes part of the Haynesville Shale gas formation and adds 2.6 trillion standard cubic feet to BG’s resources, with current net output of 78 million standard cubic feet a day.

“We expect BG will use this shale gas to meet U.S. contract commitments, thereby releasing Atlantic basin LNG cargoes for higher-priced global” markets, said Oswald Clint, a London-based analyst at Sanford C. Bernstein & Co.

BG will compete with larger rivals including Royal Dutch Shell Plc, BP Plc and StatoilHydro ASA in the development of U.S. shale deposits. It has also expanded oil and gas resources in Australia and Brazil and forecasts production will rise between 6 percent and 8 percent a year and reach 1.6 million barrels of oil equivalent a day in 2020.

“This alliance brings material new resources and supply to our existing U.S. business at a competitive price and in a prime location at the heart of the world’s largest gas market,” Chief Executive Officer Frank Chapman said in the statement. “The transaction increases BG Group’s exposure to long-term unconventional gas resources and skills.”

Marketing LNG

Dallas-based Exco rose $1.80 to $12.92 in New York Stock Exchange composite trading. BG Group fell 19 pence, or 1.8 percent, to 1,018 pence in London.

Shale gas is natural gas stored in organic rich rocks such as dark-colored shale, interbedded with layers of shaley siltstone and sandstone, according to BG.

BG has been marketing liquefied natural gas in the U.S. and supplied 55 percent of all LNG cargos imported into the country in 2007, according to its Web site. The company also generates power in the U.S. to customers in New England.

A total of $655 million will be paid on completion, plus $400 million as a carry of 75 percent of Exco’s future costs to develop the Haynesville Shale gas, the Reading, U.K.-based company said. The partners agreed to co-operate on further development and BG expects its production in the area will rise to 250 million cubic feet a day in 2012.

‘Expensive’ Deal?

The British company will pay $19,000 per acre for the Haynesville Shale gas assets. It may also buy a 50 percent interest in gas-gathering and transportation assets from Exco for $249 million to supply the fuel to U.S.’s Midwest and Eastern regions.

“Recent deals in the shale gas play have been around $15,000 per acre,” said Bernstein’s Clint. “Hence this deal at $19,000 per acre could be viewed as expensive on that basis.”

The acquisition of the gas assets is conditional on the purchase of the transport infrastructure, BG said.

To contact the reporter responsible for this story: Eduard Gismatullin in London at egismatullin@bloomberg.net

EXCO To Open Haynesville Shale Field Office

Tuesday, June 23, 2009, 1:01pm CDT

Exco to open Haynesville Shale office

Dallas Business Journal (source)

Dallas-based oil and natural gas company Exco Resources Inc. (NYSE: XCO) will officially open a new field office in the Haynesville Shale on Friday and will break ground on a new Haynesville Shale gas gathering and treating facility in Louisiana to accommodate all of the work the company is doing in the gas-rich shale.

The new field office is in Grand Cane, La., about 30 miles south of Shreveport.

Exco Resources has nine horizontal wells and eight vertical wells drilled and completed in the Haynesville shale play, the company said Tuesday. Exco intends to complete 21 more horizontal wells by the end of this year.

“We are very excited about the success we have achieved in the Haynesville Shale and have committed over two-thirds of our 2009 drilling and completion budget to continue developing the 85,000 net acres we have in the play,” said Doug Miller, chairman and CEO of EXCO Resources. “In addition to our production and development plans, we are committed to spend over $100 million in 2009 on our midstream business to add treating capability and throughput capacity in excess of 500 million cubic feet of natural gas per day by early 2010 in our Haynesville shale area.”

The Woodford Shale, A Major New Play

The Woodford Shale, A Major New Unconventional Oil And Gas Play

With the advent of new horizontal drilling and frac techniques, the Woodford Shale exhibits the potential to become a major new oil and gas play in the Midcontinent and West Texas areas of the Unitied States. Look at the numbers given for the potentially recoverable volumes of oil and gas. Can we "drill our way" out of America's dependence on foreign oil? GP

Special Focus: NORTH AMERICAN OUTLOOK-UNCONVENTIONAL RESOURCES

(source)

Reservoir characteristics and production potential of the Woodford Shale
With enough oil and gas to potentially become a major unconventional hydrocarbon reservoir, the Woodford is a viable play.
John B. Comer , Indiana Geological Survey, Bloomington, Indiana

The Woodford Shale is an attractive target for unconventional oil and gas development because it is a mature source rock that is widely distributed throughout the southern midcontinent, and because it locally produces oil and gas from naturally fractured intervals in conventionally completed wells. 1 In addition, drilled intervals yield oil shows from cuttings and cores, and produce a gas response on mudlogs, confirming that the Woodford Shale contains anomalously high oil and gas. Finally, the Woodford play that has developed in Oklahoma (279 wells drilled from 2004 to 2007 with cumulative production of nearly 64 Bcf gas and 66,538 bbl oil/condensate)2 confirms the commercial viability of the Woodford and provides incentive for additional exploration and development.

The following provides a regional overview of the oil and gas producing potential of the Woodford Shale in the US southern midcontinent. The article focuses on the Anadarko and Permian Basin depocenters and adjacent provinces, where organic-rich Woodford facies are thickest, and where conventional oil and gas production and infrastructure are extensive, Fig. 1. Of particular importance are source rock properties, especially Total Organic Carbon (TOC) and thermal maturity, and lithologic properties, especially silica content and type. Also, the geographic distribution of lithofacies, organic hydrogen content and thickness are important in deciding where to drill, and they allow volumes of oil-in-place and gas-in-place to be estimated. 3

Fig. 1 . Map showing geologic provinces with Woodford Shale in the (A) Anadarko Basin and (B) Permian Basin. 3

SOURCE ROCK PROPERTIES
Hydrocarbon source rocks (> 0.5 weight percent TOC) are attractive targets for unconventional drilling because their hydrocarbons are indigenous and their hydrocarbon charge does not depend on the fortuitous and inefficient processes of expulsion from a fine-grained source bed, secondary migration through porous and permeable carrier beds, and accumulation in an adequately sealed reservoir.

Source rocks that contain the highest concentrations of organic hydrogen generate the most hydrocarbons. These are typically beds of lacustrine and marine origin that contain Type I and Type II kerogen and generate both oil and gas during thermal maturation.
Oil-to-rock correlation studies document that the Woodford Shale is a prolific oil source, 4-13 and estimates indicate that as much as 85% of the oil produced in central and southern Oklahoma originated in the Woodford. 13 The Woodford Shale contains high concentrations of marine organic matter, 14-19 with mean organic carbon concentrations of 4.9 percent weight for the Permian Basin (Texas and New Mexico), 5.7 percent weight for the Anadarko Basin (Oklahoma and Arkansas) and 5.2 percent weight for both regions combined, Fig. 2. Organic carbon concentrations range from less than 0.1 percent weight in some chert beds 15 to 35 percent weight in black shale, 18 and the organic matter is mostly oil-prone Type II kerogen. 1,14,15,18 Across the region, the Woodford Shale exhibits a wide range of thermal maturities from marginally immature to metamorphic (Ro = 0.37-4.89 %). 15,20

Fig. 2 . TOC concentrations (weight percent) and statistics for geologic provinces in the southern midcontinent. Mean organic carbon concentration exceeds 2.0 weight percent in each of the provinces listed.

STRATIGRAPHY
The Woodford Shale is mostly Late Devonian, but ranges in age from Middle Devonian to Early Mississippian. 21-24 Age-equivalent strata include the Chattanooga Shale, Misener Sandstone, Sylamore Sandstone, the middle division of the Arkansas Novaculite, upper part of the Caballos Novaculite, Houy Formation, Percha Shale and the Sly Gap Formation. 21,24-30 These units were deposited over a major regional unconformity and represent diachronous onlapping sediments. 21,31-35 In the southern midcontinent, these units are the stratigraphic record of worldwide Late Devonian marine transgression. The Woodford is stratigraphically equivalent to several North American Devonian black shales with active and potential unconventional oil and gas production, including the Antrim Shale (Michigan Basin), Ohio Shale (Appalachian Basin), New Albany Shale (Illinois Basin), Bakken Shale (Williston Basin) and Exshaw Formation (Western Canada Basin).

WELL LOG CHARACTERISTICS
The Woodford is identified primarily by high radioactivity on the gamma-ray log and by its stratigraphic position between carbonates, Fig. 3. The Woodford exhibits low sonic velocity, low resistivity and low neutron-induced radiation. Three subdivisions (the lower, middle and upper units) are commonly recognized in the Woodford, and can be correlated regionally based on well log signatures. 36 The lower unit immediately overlies the regional unconformity, has the lowest radioactivity, and contains more carbonate, silt and sand than the other two units. The middle unit has the highest radioactivity, is the most widespread lithofacies, and consists of black shale with high concentrations of organic carbon, abundant pyrite, resinous spores and parallel laminae. The upper unit has intermediate radioactivity and consists of black shale with few resinous spores and mostly parallel laminae.

Fig. 3 . Characteristic well logs for the Permian Basin and Anadarko Basin regions. (A) Permian Basin, Winkler County, Texas.36 (B) Anadarko Basin, Major County, Oklahoma. 37

LITHOLOGY AND FACIES DISTRIBUTION
The most widespread and characteristic Woodford Shale lithology is black shale. Other common lithologies include chert, siltstone, sandstone, dolostone and light-colored shale, with hybrid mixtures between them. 14,15,21-23,38 Optimum reservoir lithologies are siliceous and include the cherts, siltstones, cherty black shales and silty black shales that are dense and brittle and, when fractured, retain open fracture networks. Production potential is greatest where these lithologies are organic-rich, thermally mature and highly fractured. Naturally-fractured Woodford Shale reservoirs, which have produced hydrocarbons for many decades, are completed in organic-rich chert intervals. 1 Figure 4 displays photomicrographs of cherty black shale in a naturally-fractured Woodford reservoir with bitumen-filled fractures from an oil-producing zone. Figure 4A was taken at a depth of 3,056 ft and has 4.5% TOC, and Figure 4B was taken at 3,065 ft and has 7.8% TOC. The association of chert and fractures in producing reservoirs suggests that the best unconventional wells are likely to be completed in the cherty facies.

Fig. 4 . Photomicrographs of core from Texaco No. 1K Drummond, Marshall County, Oklahoma, 11-6S-6E, North Aylesworth field. 1 White elliptical bodies are recrystallized Radiolaria. Photographed in transmitted plane polarized light.

The Woodford facies distribution is the result of Late Devonian paleogeography and depositional processes. During the Late Devonian, the southern midcontinent lay along the western margin of North America in the warm dry tropics near 15° south latitude. 14,39 Woodford deposition began as sea level rose, drowning marine embayments in what are now the deepest parts of the Delaware, Val Verde, Anadarko and Arkoma Basins, and advancing over subaerially eroded, dissected terrane consisting of Ordovician to Middle Devonian carbonate rocks. The broad epeiric sea that formed had irregular bottom topography and scattered, low-relief land masses which supported little vegetation and few rivers.

Oceanic water from an area of coastal upwelling flowed into the expanding epeiric sea and maintained a normal marine biota in the upper levels of the water column. Net evaporation locally produced hypersaline brine, and strong density stratification developed that restricted vertical circulation and resulted in bottom waters depleted in oxygen. Pelagic debris from the thriving biomass settled to the anoxic sea floor where organic- and sulfide-rich mud accumulated. The slow, continuous settling of pelagic debris was interrupted periodically by frequent storms and occasional earthquakes that triggered turbid bottom flows that supplied silt and mud to proximal shelves and basin depocenters, and caused resedimentation throughout the epeiric sea.

This depositional model explains why quartz grains and chert have very different distributions. Quartz grains represent terrigenous detritus transported from exposed older sources. Chert is biogenic and represents siliceous microorganisms (mostly Radiolaria) that bloomed in the nutrient-rich, upwelled water of the ocean and recrystallized after deposition on the sea floor. Detrital quartz is most abundant in areas near land, especially along the northwestern shelf and in the northwestern part of the Anadarko Basin, and in basin depocenters where turbid bottom flows finally converged. Chert beds increase in abundance and thickness toward the open ocean and are common along the continental margin and in distal parts of the major cratonic basins (Delaware, Anadarko, Marietta, Ardmore and Arkoma). The most distal allochthonous beds in the central area and core area of the Ouachita Tectonic Belt are almost pure radiolarian chert. High concentrations of radiolarian chert coincide with high concentrations of organic carbon along distal highs, such as the Central Basin Platform, Pecos Arch and Nemaha Uplift, and along the craton margin in the Arbuckle Mountain Uplift, Marietta and Ardmore Basins, western Arkoma Basin and frontal zone of the Ouachita Tectonic Belt. Where thermally mature, the organic-rich cherts and cherty black shales in these areas are optimum exploration targets.

THERMAL MATURITY
Thermal maturity follows Woodford structure, with the highest maturities in the deep basins and in orogenic belts, and the lowest maturities along structural highs, Fig. 5. 14,15,18,20,40-43 The Woodford Shale reaches its highest thermally maturity in the Anadarko, Delaware and Arkoma Basins where it is most deeply buried, and in the Ouachita Tectonic Belt where stratigraphically equivalent beds have been locally metamorphosed. Intermediate maturities occur in shelf settings, and the lowest maturities occur on structural highs such as the Central Basin Platform, Pecos Arch, Nemaha Uplift, Arbuckle Mountain Uplift and the frontal zone of the Ouachita Tectonic Belt. In deep basins, the Woodford Shale is in the gas generation window, whereas in the shelf and platform settings, the Woodford is in the oil generation window. 14,15

Fig. 5 . Map showing thermal maturity of Woodford Shale and age-equivalent units in (A) Anadarko and (B) Permian Basin regions. 3 Patterns are based on vitrinite reflectance (%Ro).

POTENTIAL PRODUCTION TRENDS
Potential production trends have been qualitatively ranked based on the probability that brittle or naturally fractured, thermally mature organic-rich beds of Woodford Shale are present in the subsurface, Fig. 6. The trends are designated as areas of probable, possible, local and poor success as follows. Probable success areas are those where organic-rich Woodford Shale is in the gas generation stage of thermally maturity and where large volumes of gas are likely to reside. Possible success areas are those where organic-rich Woodford beds are in the oil window and where the formation is shallow enough for economic drilling and for open fracture networks to persist. Local success areas are those in shelf settings where the Woodford Shale is relatively thin, but thermally mature and at a relatively shallow depth. Poor success areas are those where the formation is exposed at the surface or is shallow and unconfined, and where Woodford Shale or equivalent units have been metamorphosed or have very low organic carbon content.

Fig. 6 . Map showing hydrocarbon production potential and estimated volumes of oil-in-place and gas-in-place for Woodford Shale and age-equivalent units in the (A) Anadarko and (B) Permian Basin regions. 3

ESTIMATION OF RESOURCE POTENTIAL
The resource potential estimations assume that oil and gas in the Woodford Shale are indigenous, and were calculated based on organic carbon concentration, organic hydrogen concentration, organic matter type, thermal maturity and facies volumes (thickness times area), Fig. 6. 3 While this is not an assessment of recoverable oil and gas, it does estimate total gas-in-place and oil-in-place through mass balance calculations based on the concentration of organic hydrogen in the source beds. 3 The data suggest that total in-place gas in the Woodford Shale is on the order of 830 Tcf and total in-place oil is on the order of 250 Bbbl in the southern midcontinent. These volumes include 130 Bbbl of oil-in-place in the Anadarko Basin region, and 230 Tcf of gas-in-place and 120 Bbbl of oil-in-place in the Permian Basin region.

In the Anadarko Basin region, the estimated gas potential is 600 Tcf in the area of probable success, an area that includes the Anadarko and Arkoma Basins. The estimated gas potential is 0.24 Tcf and the estimated oil potential is 70 Bbbl in the area of possible success, encompassing the Nemaha Uplift, Marietta and Ardmore Basins, Arbuckle Mountain Uplift, southern flank of the Anadarko Basin, and frontal zone of the Ouachita Tectonic Belt in Oklahoma. About 4.4 Tcf of gas-in-place and 60 Bbbl of oil-in-place are estimated for the area of local success, which includes most of the northern and central Oklahoma Platforms.

In the Permian Basin region, the estimated gas potential is 220 Tcf in the area of probable success, which includes the Delaware and Val Verde Basins. The estimated gas potential is 0.11 Tcf and the estimated oil potential is 35 Bbbl in the area of possible success, encompassing the Central Basin Platform and northern flank of the Pecos Arch. About 9 Tcf of gas-in-place and 84 Bbbl of oil-in-place are estimated for the area of local success, which encompasses much of the shelf and platform provinces and most of the Midland Basin.

Although estimates of the volume of undiscovered hydrocarbons are inherently problematic because of the assumptions that must be made to complete the calculations, the mass balance approach yields orders-of-magnitude for in-place oil and gas, and provide a consistent means to compare and rank different areas of interest as to their hydrocarbon production potential.

CONCLUSIONS
The Woodford Shale is a major unconventional energy resource with the potential for producing significant volumes of both oil and gas. Intuitively, its status as a world-class oil source rock indicates that the formation should contain large residual concentrations of hydrocarbons, and analytical data from numerous studies confirm this inference. The inherent inefficiency of hydrocarbon expulsion is the primary reason why source rocks like the Woodford retain large volumes of oil and gas and are attractive targets for unconventional exploration. Given the ubiquity and magnitude of oil and gas shows, local production from naturally fractured reservoirs, recent unconventional production from the Woodford Shale in Oklahoma, successes in unconventional resource recovery from analogous formations, and current oil and gas prices, the Woodford Shale in the southern midcontinent is a compelling exploration target.

Optimum locations for exploration are where organic-rich beds are currently in the oil or gas generation window. Optimum reservoir facies are those comprising brittle lithologies capable of maintaining open fracture networks. The best reservoirs are likely to be completed in mature organic-rich cherts and cherty black shales but other lithologies, such as sandstone, organic-rich siltstone, and silty black shale, can also be expected to produce locally. Areas having the greatest production potential and most prospective lithologies are the Anadarko Basin in Oklahoma, Marietta and Ardmore Basins in Oklahoma, Arkoma Basin in Oklahoma and Arkansas, frontal zone of the Ouachita Tectonic Belt, Delaware Basin in Texas and New Mexico, Central Basin Platform in Texas and New Mexico and the Val Verde and Midland Basins in Texas.

ACKNOWLEDGEMENTS
The author is indebted to Indiana Geological Survey colleagues Kimberly H. Sowder, Barbara T. Hill and Renee D. Stubenrauch, who drafted the figures and formatted the photographs for this article. Also, IGS staff scientists Margaret V. Ennis, Nancy R. Hasenmueller, Maria D. Mastalerz, and Charles W. Zuppann reviewed the article and offered constructive criticisms. IGS editor Deborah A. DeChurch proofread the manuscript. Publication is authorized by John C. Steinmetz, State Geologist and Director of the Indiana Geological Survey.

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19 Sullivan, K. L., “Organic facies variation of the Woodford Shale in western Oklahoma,” Shale Shaker, Vol. 35, No. 4, 1985, pp. 76-89.

20 Cardott, B. J., “Thermal maturation of the Woodford Shale in the Anadarko Basin,” in Johnson, K. S., ed., Anadarko Basin Symposium, 1988, Oklahoma Geological Survey, Circular 90, Norman, Okla., 1989, pp. 32-46.

21 Amsden, T. W. et al., “Devonian of the southern midcontinent area, United States,” in Oswald, D. H., ed., International Symposium on the Devonian System, Alberta Society of Petroleum Geologists, Calgary, Canada, 1967, pp. 913-932.

22 Amsden, T. W., “Hunton Group (Late Ordovician, Silurian and Early Devonian) in the Arkoma Basin of Oklahoma,” Oklahoma Geological Survey, Bulletin 129, Norman, Okla., 1980, p. 136.

23 Amsden, T. W., “Hunton Group (Late Ordovician, Silurian, and Early Devonian) in the Anadarko Basin of Oklahoma,” Oklahoma Geological Survey, Bulletin 121, Norman, Okla., 1975, p. 214.

24 Hass, W. H. and J. W. Huddle, “Late Devonian and Early Mississippian age of the Woodford Shale in Oklahoma, as determined from conodonts,” US Geological Survey Professional Paper 525-D, 1965, pp. D125-D132.

25 Huffman, G. G., “Geology of the flanks of the Ozark uplift,” Oklahoma Geological Survey, Bulletin 77, 1958, p. 281.

26 Cloud, P. E., Barnes, V. E. and W. H. Hass, “Devonian-Mississippian transition in central Texas,” GSA Bulletin, Vol. 68, No. 7, 1957, pp. 807-816.

27 Graves, R. W., “Devonian conodonts from the Caballos Novaculite,” Journal of Paleontology, Vol. 26, No. 4, 1952, pp. 610-612.

28 Laudon, L. R. and A. L. Bowsher, “Mississippian formations of southwestern New Mexico,” GSA Bulletin, Vol. 60, No. 1, 1949, pp. 1-88.

29 King, P. B., King, R. E. and J. B. Knight, “Geology of the Hueco Mountains, El Paso and Hudspeth Counties, Texas,” Oil and Gas Investigations Preliminary Map 36, US Geological Survey, 1945.

30 Stevenson, F. V., “Devonian of New Mexico,” Journal of Geology, Vol. 53, No. 4, 1945, pp. 217-245.

31 Amsden, T. W. and G. Klapper, “Misener Sandstone (Middle-Upper Devonian), north-central Oklahoma,” AAPG Bulletin, Vol. 56, No. 12, 1972, pp. 2323-2334.

32 Galley, J. E., “Oil and geology in the Permian Basin of Texas and New Mexico,” in Weeks, L. G., ed., Habitat of Oil, American Association of Petroleum Geologists, Tulsa, Okla., 1958, pp. 395-446.

33 Ham, W. E., “Regional geology of the Arbuckle Mountains, Oklahoma,” in Ham, W. E., ed., Geology of the Arbuckle Mountains, Oklahoma Geological Survey, 1969, pp. 5-21.

34 Ham, W. E. and J. L. Wilson, “Paleozoic epeirogeny and orogeny in the central United States,” American Journal of Science, Vol. 265, No. 5, 1967, pp. 332-407.

35 Freeman, T. and D. Schumacher, “Qualitative pre-Sylamore (Devonian-Mississippian) physiography delineated by onlapping conodont zones, northern Arkansas,” GSA Bulletin, Vol. 80, No.11, 1969, pp. 2327-2334.

36 Ellison, S. P., “Subsurface Woodford black shale, west Texas and southeast New Mexico,” Report of Investigations 7, Bureau of Economic Geology, Austin, Texas, 1950, p. 20.

37 Hester, T. C., Schmoker, J. W. and H. L. Sahl, “Log-derived regional source-rock characteristics of the Woodford Shale, Anadarko Basin, Oklahoma,” US Geological Survey Bulletin 1866-D, 1990, pp. D1-D38.

38 Harlton, B. H., “The Harrisburg trough, Stevens and Carter Counties, Oklahoma,” in Hicks, I. C. et al., eds., Petroleum Geology of Southern Oklahoma, v. 1, American Association of Petroleum Geologists, Tulsa, Okla., 1956, pp. 135-143.

39 Heckel, P. H. and B. J. Witzke, “Devonian world palaeogeography determined from distribution of carbonates and related lithic palaeoclimatic indicators,” in House, M. R., Scrutton, C. T. and M. G. Bassett, eds., Special Papers in Palaeontology No. 23, The Devonian System: A Palaeontological Association International Symposium, Palaeontological Association, London, 1979, pp. 99-123.

40 Carr, J. L., “The thermal maturity of the Chattanooga Formation along a transect from the Ozark Uplift to the Arkoma Basin,” Shale Shaker, Vol. 38, No. 3, 1987, pp. 32-40.

41 Cardott, B. J. and M. W. Lambert, “Thermal maturation by vitrinite reflectance of Woodford Shale, Anadarko Basin, Oklahoma,” AAPG Bulletin, Vol. 69, No. 11, 1985, pp. 1982-1998.

42 Houseknecht, D. W., Hathon, L. A. and T. A. McGilvery, “Thermal maturity of Paleozoic strata in the Arkoma Basin,” in Johnson, K. S. and B. J. Cardott, eds., Source Rocks in the Southern Midcontinent, 1990 Symposium, Oklahoma Geological Survey Circular 93, Norman, Okla., 1992, pp. 122-132.

43 Houseknecht, D. W. and S. M. Matthews, “Thermal maturity of Carboniferous strata, Ouachita Mountains,” AAPG Bulletin, Vol. 69, No. 3, 1985, pp. 335-345.
.
THE AUTHOR
John B. Comer is a Senior Scientist at the Indiana Geological Survey with an academic appointment at Indiana University. He earned a BA from Ohio Wesleyan University, an MS from The University of Wisconsin-Milwaukee and a PhD from The University of Texas at Austin, all in geology. During his 36-year career, he worked as a research scientist in the geochemistry group at the Amoco Production Company Research Center in Tulsa, an assistant and associate professor at Tulsa University and the Geochemistry Section Head at the Indiana Geological Survey. Dr. Comer has conducted research in organic, inorganic and environmental geochemistry, clastic sedimentation, sedimentary petrology and the deposition and diagenesis of organic-rich rocks. He is an active member of AAPG, SEPM and GSA and has authored more than 120 scholarly papers and technical reports in geology and geochemistry.

How Wells Are Drilled Horizontally

The following is a simplified but good explanation of how oil and gas wells start drilling vertically and are then gradually turned in a desired direction. They then "build angle" with 0 degrees being vertical and 90 degrees being horizontal. This ability to drill horizontally, then fracture the rocks, and hold the fractures open with propant (sand or glass beads), is what allows these low permeability shales to produce economic quantities of gas and oil.

The source of this article is here: http://www.energyindustryphotos.com/how_oil_and_gas_wells_are_drille.htm

Peter

How Oil And Gas Wells Are Drilled Horizontally

Today's oil companies now have the ability to drill wells sideways, to reach specific pockets of oil and gas or "targets" which may be beneath cities or environmentally sensitive area where a rig cannot be set up. Multiple wells can be drilled from one pad site on land or from an offshore platform, reducing costs and the environmental impact of oil and gas exploration.

Horizontal drilling techniques are also used to expose more surface area of oil bearing rock so that the overall production of the well is increased in either a new well or old well that has been producing for some time.

You may be asking yourself, how do you get heavy, rigid drill pipe to turn and go sideways? The truth is that when so much pipe is strung together it does flex, enabling the hole to be drilled at up to a 90 degree inclination in any direction and out to a thousand feet or more horizontally from the vertical hole. The assembly that does the drilling is made up of several parts. They include the following:

Mud Motor Illustration of a Mud Motor as Used In Horizontal Oil and Gas Wells

A directional assembly (parts that make up the drill string that the rig lowers into the hole to drill the well) consists of a "mud motor" which is a machine that contains a rotor and stator inside it which are turned by the force of the drilling fluid or "mud" that is pumped down the drill pipe. This motor turns the drill bit so instead of turning the entire length of drill pipe, the motor, which is bent at a certain angle, can remain in a fixed position drilling the hole in whatever direction the bend of the motor is aimed toward.

MWD MWD tool on the surface. (Is lowered into a special section of drill pipe or " Monel collar" which is non magnetic.

A probe full of instruments is placed inside a nonmagnetic length of drill pipe just above the mud motor to show the driller on the surface which direction he is drilling in and at what angle or inclination he is heading. This instrument is an MWD or "Measure While Drilling" probe. It typically consists of instruments that measure inclination utilizing accelerometers, and instruments that measure azimuth or compass heading using magnetometers. This information is sent via a series of pressure pulses in the column of drilling fluid flowing down to the bit from pumps on the surface. At the surface a device called a transducer picks up these increases in pressure (similar to Morse code signals) and they are decoded by surface equipment in the MWD company's mobile lab that is placed on deck of the offshore rig, or near a the rig on land. This equipment is connected to a display on the rig floor where the driller can see which way the bent motor is sliding.

The directional driller can then turn the entire length of drill pipe ever so slightly in the direction he wants the well to go and the motor which is being turned by the flow of drilling mud coming down the drill pipe causes the bit to chew away at the rock and drill ahead. MWD equipment can also be combined with sensors that record gamma rays given off from the rock formations below, instruments that measure resistivity and conductivity, etc. This is known as "logging while drilling" or LWD. It enables the oil company geologists to see if they are staying in, or have reached, the oil or gas bearing zones in real time instead of having to pull all the drill pipe out of the hole and run a wireline based logging tool down the hole.

Enhanced Recovery

The ability of oil companies to drill horizontally is being used in fields that have been depleted to the point where very little oil or gas is flowing into the original vertical well and to drill multiple horizontal wells from the same offshore platform to a pocket of oil or gas as seen in the illustration below. See What is Enhanced Oil Recovery?

Illustration of an Offshore Horizontal Oil Well from a Drilling Platform

In a well that was originally drilled vertically in the past and is not producing as much as it once was, a "re-entry" will be done whereby a device called a whipstock is lowered and fixed at a certain depth.

A special bit or "mill" is used at the end of the regular drill pipe, deflected into the side of the casing by the whipstock to cut a hole in the heavy metal casing and out the side of the well. This is done somewhere just above the productive formation. Then, after this "window" has been cut the rig will pull the milling bit out of the hole and then lower the directional assembly consisting of the mud motor and MWD equipment down into the hole and begin to drill a horizontal hole. Horizontal drilling techniques are being used in a variety of rock formations including the Barnett Shale of Texas - Oklahoma, and the Bakken Formation in North Dakota and Canada. In the Barnett Shale and Marcellus Formation for example, horizontal wells can extract the very low volume of gas given off by the dense shale. In the past such formations of low porosity had been passed over and considered not economically viable with vertical wells. Now large areas of the United States are being opened up to natural gas exploration in shale and limestone formations of low porosity. These dense formations are drilled with horizontal drilling methods and then "fracked" with high pressure water to create more fissures that will allow gas to escape from the rock into the wellbore. Coal bed methane, or natural gas can be extracted from coal seams too deep to mine using horizontal drilling techniques.

Recent Advances In Technology

New techniques to drill wells horizontally are being developed all the time. One such technique is called "Rotary Steerable". With this system the entire drill string can be rotated, enabling faster penetration and quicker drilling of the well. It utilizes the same components, MWD and a mud motor, but it is a very specialized type of mud motor that has kick pads that orient the drill bit in the right angled direction instead of using a bent mud motor.

Leaders in the industry include companies such as Weatherford, Halliburton (Sperry Sun), Pathfinder Energy Services, Schlumberger and Baker Hughes.

The YouTube video below, while without sound, illustrates the drilling of a hypothetical horizontal well. It shows first the drilling of a horizontal hole, drilling the "curve" of the well with directional equipment, pulling out to cement in a "liner" or casing to protect the upper layers of the well bore, then drilling out of this casing again into rock horizontally and finally set the production casing. (click on the following link to see the video on youtube)

http://www.youtube.com/watch?v=Y37XbMEDnXc&eurl=http%3A%2F%2Fwww%2Eenergyindustryphotos%2Ecom%2Fhow%5Foil%5Fand%5Fgas%5Fwells%5Fare%5Fdrille%2Ehtm&feature=player_embedded

While these explanations are simplified I hope that they give the reader some idea of how this technology works. As the world requires more and more oil and gas new advances in drilling technology are being developed to work in deeper holes, hotter temperature zones and pressures.

Basics Of Horizontal Drilling

For more information on how oil wells are drilled the two books that I recommend the most are The Nontechnical Guide To Petroleum Geology, Exploration, Drilling and Production and A Primer Of Oilwell Drilling by Ron Baker. Both used by many colleges and technical schools as well as Oilfield Service companies in their training programs. For production only try Oil and Gas Production In Nontechnical Language. Drilling Technology In Nontechnical Language

is a lower cost alternative to "A Primer Of Oilwell Drilling". All can be found in The Oilfield Bookstore,

For More Information on any of these books and customer reviews click on the book covers below...

America Has Abundant (And Increasing) Amounts Of Natural Gas

This ought to be good news for everyone. The technology and infrastructure to drill and produce more natural gas is proven and much of it is already in place. We use this gas to heat our homes, cook our food, and generate substantial amounts of the electricity we need. The technology to use this gas to power automobiles, trucks and buses exists and involves only a simple and inexpensive conversion.

Increased drilling and production would create jobs, provide increased royalties and tax revenue to Local, State, and the Federal Government, and it would reduce our dependence on "foreign oil". So why aren't we going after this bonanza of energy? Why are drilling rigs sitting idle?
Peter

June 18, 2009

Estimate Places Natural Gas Reserves 35% Higher

By JAD MOUAWAD The New York Times (source)

Thanks to new drilling technologies that are unlocking substantial amounts of natural gas from shale rocks, the nation’s estimated gas reserves have surged by 35 percent, according to a study due for release on Thursday.

The report by the Potential Gas Committee, the authority on gas supplies, shows the United States holds far larger reserves than previously thought. The jump is the largest increase in the 44-year history of reports from the committee.

The finding raises the possibility that natural gas could emerge as a critical transition fuel that could help to battle global warming. For a given amount of heat energy, burning gas produces about half as much carbon dioxide, the main cause of global warming, as burning coal.

Estimated natural gas reserves rose to 2,074 trillion cubic feet in 2008, from 1,532 trillion cubic feet in 2006, when the last report was issued. This includes the proven reserves compiled by the Energy Department of 237 trillion cubic feet, as well as the sum of the nation’s probable, possible and speculative reserves.

What Is a Tcf?

Natural gas is generally priced and sold in units of a thousand cubic feet (Mcf, using the Roman numeral for

one thousand). Units of a trillion cubic feet (tcf) are often used to measure large quantities, as in

resources or reserves in the ground, or annual national energy consumption. A tcf is one billion Mcf

and is enough natural gas to: Heat 15 million homes for one year; Generate 100 billion kilowatt-hours of electricity;

Fuel 12 million natural gasfired vehicles for one year.

The new estimates show “an exceptionally strong and optimistic gas supply picture for the nation,” according to a summary of the report, which is issued every two years by a group of academics and industry experts that is supported by the Colorado School of Mines.

Much of that jump comes from estimated gas in shale rocks, which drilling companies have only recently learned how to tap. They have developed a technique called hydraulic fracturing, in which water is injected at high pressure into wells to shatter rocks deep underground, helping to release trapped gas.

The method, perfected in recent years in places like Texas and Pennsylvania, has set off a boom in new drilling, but is coming under increasing regulatory and environmental scrutiny. Shale gas accounts for 616 trillion cubic feet of reserves, or a third of the total, according to the report.

“New and advanced exploration, well drilling and completion technologies are allowing us increasingly better access to domestic gas resources — especially ‘unconventional’ gas — which, not that long ago, were considered impractical or uneconomical to pursue,” said John B. Curtis, a geology professor at the Colorado School of Mines and the report’s principal author.

The huge increase in estimated gas supplies comes just as concerns about energy security and climate change are prompting the most profound shift in energy policy since the oil shocks of the 1970s.

The Obama administration has sought more stringent fuel standards for new cars, and Congress is debating regulations that would progressively limit carbon dioxide emissions throughout the economy. The administration has taken a cautious approach to conventional energy resources, freezing leases to develop oil shale reserves and carefully reviewing future offshore leases for oil and gas.

Instead, the administration seeks to increase the share of renewable energy, especially wind and solar power. But experts say that meeting these goals will prove challenging given the scale of the nation’s energy use and the costs involved in switching from fossil fuels.

Shale gas currently provides a small fraction of the nation’s total gas production. But many experts believe the rising supply of natural gas means it can substitute for other fossil fuels. With the output of conventional gas forecast to decline, the Energy Department expects that shale production will rise substantially to meet higher demand, as will imports.

Natural gas accounts for about a quarter of the nation’s total energy use, and 22 percent of electrical production. Coal accounts for about half of the nation’s power generation, while oil dominates transportation fuels. While gas generates less carbon dioxide than oil or coal, it still accounted for about 20 percent of domestic energy-related emissions in 2006.

The Energy Department estimates that demand for natural gas will rise by 13 percent by 2030. In the power sector, utilities have been switching to natural gas from coal, but further increases in the use of gas will most likely depend on whether Congress puts a price on carbon dioxide emissions, as it is considering. That would favor cleaner fuels like gas.

“It’s nice to have aspirations about renewable energy and efficiency, but we need to recognize these are long-term goals and that we need something to get us there in the meantime,” said Guy F. Caruso, a former administrator of the Energy Information Administration. “Natural gas has a role to play as a bridge because of the long lead time and scalability issues of renewable fuels.”

That the nation’s gas reserves were bigger than expected does not mean they will necessarily be developed, Mr. Caruso warned. “There are some things to be cautious about,” he said, “and obviously one of them is cost, and the other is regulatory risk.”

In recent years, industry executives and analysts have been surprised by the discovery and successful development of new supplies of shale gas, like the Barnett Shale in the area around Fort Worth.

But higher drilling costs and the extensive use of water to fracture shale rocks have raised concerns about the long-run commercial potential of these supplies. Some environmental groups fear that hydraulic fracturing will pollute drinking water, and Congress is considering tighter regulation of the practice.

Mr. Caruso said that gas prices needed to be around $4 to $6 per thousand cubic feet to justify developing shale beds. They have fallen below that level at times in recent months, though gas settled Wednesday at $4.25.

For advocates of the gas industry, the report vindicates the potential of natural gas in the economy.

“Natural gas is part of the solution for a low-carbon future, and not an impediment,” said Chris McGill, the managing director for policy analysis at the American Gas Association, a trade group. “It has been difficult to get policy makers over that hump. Many have a vision of gas as a resource we’re running out of, and that’s just not true.”