The action on the domestic drilling scene says it all.
Shale plays are hot.
Yet only a few years ago it was unthinkable that so many of these deposits of highly compacted mud were destined to become the in target for the drillbit.
The current elevated status of shale beds was clearly evident when AAPG member David Reimers, senior data adviser at IHS Energy in Houston, presented his paper on U.S. Shale Trends and Expansion at the 2008 AAPG Annual Convention and Exhibition in San Antonio.
It was SRO inside the meeting room while a crowd of attendees reportedly filled the adjacent hallway, straining to hear the presentation from outside.
In 2007, there were 4,185 shale completions in the United States, and that number just keeps rising, according to Reimers. In fact, shale completions are up more than 10 percent since 2006 and a whopping 75-plus percent since 2000.
And there’s no sign of a slowdown.
It’s all about high commodity prices and new technology that make it more economic to go after these complex reservoirs, which frequently are unusually challenging to complete and produce. Horizontal completions are the norm.
Active Areas
Reimers took his audience on a kind of shale tour across the United States, beginning in the Northeast, where the relatively new Marcellus Shale is the hot play du jour.
The region lays claim to a number of familiar shale drilling targets, including the Trenton-Black River, Chattanooga, New Albany, Antrim and more.
Shale well completions in the Northeast numbered an estimated 1,255 in 2007 compared to 1,247 in 2006. Production levels for the two years registered essentially equal with 2007 numbers leading the way marginally at close to 500 bcf, Reimers noted.
The shale beds that showed the greatest increase in completions were the Huron (85 completions in 2006 and 90 in 2007) and the Marcellus, where 25 completions were accomplished in 2006 followed by 28 in 2007.
In the central United States, the Devonian-Mississippian Woodford/Caney shale is the scene of the action in Oklahoma, where the Woodford tallied 266 completions in 2007 compared to 129 in 2006 (see story). Five completions are on the record for the Caney in 2007.
In the western part of the country from New Mexico and northward through Colorado and Utah and on up into Wyoming, Montana and North Dakota, there’s shale action aplenty.
The array of drilling targets consists of the Cretaceous-age Mancos, Lewis and Baxter shales and the Upper Devonian-Lower Mississippian Bakken formation.
Currently the spotlight is on the Bakken, owing in large part to recently released numbers from the U.S. Geological Survey. The agency estimated mean undiscovered volumes of 3.65 billion barrels of oil, 1.85 tcf of associated/dissolved natural gas and 148 mbo of natural gas liquids in the Bakken in the Williston Basin in Montana and North Dakota.
The Bakken, which achieved fame in the late 1990s with development of the giant Elm Coulee Field in Montana, was the source of slightly more than 400 completions in 2007, according to Reimers. The numbers greatly overshadow the estimated 50 completions on record five years earlier in 2003.
Completions in the Mancos in 2007 tallied about 25, and the number of Baxter completions were estimated to be slightly less than 25. These were the highest number of annual completions for both of these shales over the previous five years.
In contrast, the estimated number of Lewis completions for 2007 stood at 40, down considerably since 2003 when they registered an estimated 120.
Reimers noted that the number of permits issued in 2007-08 appear to represent a renewed interest in these western shales, with most of the activity in the Bakken.
In the Arkoma Basin in Arkansas, the Mississippian-age Fayetteville continues to show a sharp increase in drilling, Reimers said. In fact, there were 308 completions in 2007 versus 111 in 2006. In tandem, gas production escalated from 14.9 bcf in 2006 to 63.7 bcf in 2007 – and continues rising.
REAL Active Areas
Despite all the action in the different shale plays, perhaps no single one makes numerous operators’ hearts beat faster than the huge Barnett Shale play in Texas, which just keeps on going strong.
“There were more than 1,750 (mostly horizontal) completions in the Barnett last year,” Reimers said, “and back in 2000, there were 161.
“The new part is going to the southwest of the core Barnett area (generally in the Fort Worth region),” he noted. “There are 25 completions in the Permian Basin, and 20 of these are vertical.”
More than 3,700 bcf of gas already have been produced from the Barnett, and the play’s overall estimated value/impact on the state of Texas is anticipated to be $100 billion.
Devon and Chesapeake head up the list of the top Barnett operators, according to Reimers. XTO, EOG and Burlington complete the top five list.
Reimers noted there are a number of emerging shale plays/opportunities beyond the more familiar names, including:
- Pearsall Shale (Maverick County, Texas).
- Niobrara (Kansas and Nebraska).
- Floyd (Northern Mississippi and Alabama).
- Bossier (Texas and Louisiana).
Then there’s the hot, new Haynesville Shale play in north Louisiana.
Lying just beneath the Bossier Shale, the Upper Jurassic Haynesville appeared prominently on the industry’s radar screen after a late-March announcement of a discovery by Chesapeake, which followed an earlier press release on a Haynesville discovery made by Cubic Energy.
It’s a long way from discovery to nailing down the actual size and true potential of any play, but scuttlebutt in the oil patch and other places has it that the Haynesville likely is going to be a Big One.