Unconventionals Powering the Future

Unconventionals likely to supply demand growth of fossil fuels

Rob H. Gales, Vice President of Unconventional Resource Projects at Weatherford Laboratories told delegates at Shale Gas Results in Europe 2011 in Warsaw, Poland that he was positive that fossil fuels would be powering his grandchildren’s future.

“We know the gas is there,” he said, “the challenge is getting it out of the ground.”

Gales was convinced that fossil fuels would be the main energy supply, accounting for about 80% for the foreseeable future, and that unconventional resources would play a role in supplying demand growth.

International challenges in Europe, noted Gales, included the fewer number of wells and fewer operators outside of North America. He commented: “We don’t have enough of the right equipment, or of suppliers.”

But the technology kept marching on, he said, in things like hydraulic fracturing.

Environmental stewardship was one of Gales’ topics. He said it was important to plan it out from the beginning of the project and included well construction – casing design, for one – and using pad drilling to minimize surface area requirements.

"These are all things we’ve been working on, like 6 - 22 wells per pad with 3 meters or less of surface spacing.” It also involved reducing the number of roads, pipelines and surface facilities at a drilling site.

Exploration, he said, was necessary to determine the resource quality and quantity.

“Every service company has a different ladder. To get into the pilot stage, we need to appraise and get into the pilot activity.

“We need good science on the front end,” continued Gales. “We can minimize and get it right the first time. We need to have image data to understand fracture orientation. And we also need to understand reservoir drainage.”

He added that reducing costs involved looking at every minute thing. “To map the sweet spots we have to have data. There have been big improvements in this in the last three years. Using all the data is happening.”

According to Gales, mud logging had been around a long time and many downplayed it.

“We can get an idea of the variations and brittleness,” he said. “We’re trying to reduce the uncertainty and improve our completions. If we decide we have three sweet spots: a geographic area, a reservoir one and a lateral one driving our completion quality.”

He showed a graph of the results of cuttings, the percentage of brittleness versus clays.

“It’s about getting the data you need: plan from the beginning and use a statistical approach. How do we use this data? The key aspect is that standard petrophysical techniques do not work with unconventionals.”

The big dollars, he said, were in drilling and completion. “If we look at a typical well outside the US it could cost 2-3 times.”

“This is a newer rig, which is quieter,” showed Gales in his presentation, which depicted a well that was surrounded by a high wall fence. “There is sensitivity to the neighbors, a scheduling of operations.”

Gales presented a lateral drilling improvement at the Haynesville shale to the delegates in Warsaw. Via use of the Revolution ™ Rotary Steerable versus a Mud Motor, which, according to a graph showed that six days were saved with a 900 foot longer lateral, and $500,000 of rig costs was also cut.

He commented: “Just the change in the bits and the bottom hole assembly has helped us cut off these days of drilling time, saving half a million dollars.”

“We have to understand where all the aquifers are,” he added, saying there had been cases when another aquifer was found even further down.

Gales noted that longer laterals created more difficult completions. “We need to get info on our laterals, where are we going to put stages? We have to worry about fluid types and proppant types.”

He showed photo of a typical operation in North America with lots of trucks, and lots of equipment.

“We’re having constant improvements in the chemicals we use,” he reported. “We’re going to green chemicals so we can reduce the amount of water that’s required.”

Gales addressed concerns over the contents of fracking fluid used for hydraulic fracturing.

“If you look at most of the fracks today, it’s 1% chemicals,” he explained. “The same chemicals are used in the ground that are used in your house, like laundry detergent.

“We have not done a good job of educating, but we’re moving more and more towards making everything green.”

In terms of microseismic monitoring, “closing the loop” was discussed.

“How do we know we’re doing everything right, that we’re not breaking out of the zone? Microseismic is good for determining that,” he explained. “Because we don’t have enough wells, we use an offset well. We’ll know the height, we’ll know the orientation, etc.”

Gales said that returned frack water could be cleaned on site. “We re using it as much as possible: it’s treated, re used, recycled. As an industry we’re working to push these things to put them right on the well site.”

“The technology exists to be able to develop shale gas, but what about the political and economic conditions?” he queried, explaining that it was important to work with governments on establishing the regulations, as well as working with the media from the beginning and working on environmental stewardship.

He added, “Always keep in mind the complexity of reservoirs.”

“Ongoing appraisal is one of the things we got in the habit of doing, so it may be the same but with the variability of wells we can improve on that. Technology keeps advancing in all areas.”

Microseismic should be looked at early in the cycle, according to Mr. Gales.

Showing the difference between a towering well and a more diminutive drilling site that could be deemed more desirable, Mr. Gales noted: “Pad sizes have gotten smaller and we’re on location less and less. As an industry we keep moving forward.”