Utica Shale Offers Tales for Poland

The Golden Wedge

In his presentation at Shale Gas Results in Europe 2011 in Warsaw, Poland, Douglas Brett, President and CEO at Canadian Quantum Energy Corporation said there were numerous similarities between Poland and Quebec in the context of shale gas development, drilling and completion, which were the topics he pledged to cover.

Canadian Quantum, he said, had an interest in ~174,000 acres (37,000 net) in the Utica Shale unconventional natural gas play located in the St. Lawrence Lowlands, Quebec in Canada.

Brett offered his company’s experiences from Canada, like getting critical mass to get services set up.

“In our case,” he explained, “we needed to drill about 40 wells to be able to justify a couple of rigs and a fracture. That’s a sizable commitment considering the cost of wells. We’re not there as an industry but we’re getting there.”

He gave an optimistic assessment for the future in giving “heads up” time to companies providing services and infrastructure to drilling operations.

“Our industry will get together, band together and get down to the hard work. Our plan is to announce the commitment. They need a year lead-time to build equipment, they need to know that the work gets done.”

He showed what he called a “golden wedge” of a shale basin from Montreal to Quebec city: the Utica shale, which his slide showed was Ordovician, 1,000-2,500 meters deep, 100-300 meters thick and contained approximately 20-40 TCF of gas.

“The work there is being done by Talisman Energy, by us and others,” he said. “Two sets of results are out, an initial production of 12 MMcf per day, which went down to 6 million. Those were better than expected results,” he commented, adding that there were some technical difficulties with another well, whose production was under 2 MMcf/day.

Showing a detailed map, Brett explained: “All the other wells in here are verticals that were done specifically for the shale. We’re now moving in to the phase of horizontals and testing.”

His presentation included a stratigraphic profile of the Lorraine and Utica shales, and he offered a land summary of shale drilling in Quebec, which, for each permit, showed acreage, royalty percentages and partners.

Among those was the Nicolet, comprising over 59,000 acres. According to Brett’s presentation the Nicolet accounted for ~88% of Canadian Quantum’s “Net Land Holdings.”

“Over the life of the project, it’s a land play,” he said. Our plan is to move the play forward, and spend as much money as necessary.”

Then, Brett said he would get into some of the technical part of his talk, which had to do with completions. “Technology makes it all work,” he said, showing a wellhead setup from Quebec. “This is a cased well, where we elected to do a perf and plug.”

In terms of water storage, he said Canadian Quantum used big corrugated ovals that held enough water to do two and a half fracks. “They’re big swimming pools. We had 17 pumpers on this particular job,” he added.

According to his presentation, the company’s general practices for horizontal wells included cemented laterals, usually referred to as “plug and perf “operations. “The other method used in Alberta, is we use a ball drop system on a packer separation between stages in the open annulus. You can get all your fracking done in one day and you can get the fracking fluid back.”

Brett said it was a question as to whether it caused damage by leaving it in there. He then showed a non-cemented multistage packer system.

“It worked extremely well for us; when you flow it back you hopefully recover all your balls in order.”

He spoke of microseismic providing new “insite” and listed three main methods for data acquisition: real time monitoring, buried array service, and frac-star service.

“Burried arrays are drilled down and cemented in,” he said.

In terms of the benefits, he contended that impact on the environment could be

kept to a minimum and that multiple wells could be drilled from a single site keeping surface impact to less than 0.5%.

Brett showed an example of what Encana Corp. was doing in the Horn River in British Columbia, that through a gas factory approach, it was aiming to maximize wells per pad, length per well, fracks per well and water per frack.

“At 16-20 wells per pad, and up to 140 fracks – it’s pretty remarkable,” he commented.

“There’s a learning process here and it behooves everybody to go through it,” he said. “Each area is unique and the science need to be done to improve your results.”

Regarding fracking fluids, Brett reported: “Everything’s going green and that’s where it needs to go. We actually had good government support in this.

“Quebec prides itself on being independent,” he continued. “They are a very individual province. The whole political climate turned with the Gasland movie, etc. Some of the issues south of the border have gone across to us and imported in to Europe, in France in particular.”

Brett said there was an automatic mistrust of industry by the public, “So you can have all the town hall meetings you want to have. You can try to educate politicians, but if they don’t think they’re going to get elected they’ll be swayed by the public.”

He explained that while the allegations in the documentary Gasland had been disputed, nobody cared. “Fear and terror sells newspapers or happy stories- corrections don’t. Be careful here in Poland to keep government support; educate people, educate the government.”

Shale gas royalties were brought up, and Brett mentioned that it has been suggested that 100% of those should go to communities in Canada as opposed to the crown.

“There’s a tremendous economic spin-off that’s got to be emphasized,” he told delegates at the conference in Poland.

There were wells drilled that had surface leaks, according to Brett, which had been widely publicized. Well casing, he said, required attention.

Finally, he said that drillers were doing longer laterals, bigger fracks, and smarter fracks.

“Pad development is going to be key,” explained Brett. “It makes most sense in British Columbia, for water processing facilities in particular. We can learn from each other and make this work for all of us.”

Editors Note:  A new report by The Fraser Institute, says that Quebec is one of the least attractive places in Canada to do business when it comes to oil and gas exploration. The Canadian think tank believes that the controversy over shale gas projects, suggests hysteria – sensationalistic videos and half-truths – which have replaced solid scientific fact. The think-tank adds that over-zealous environmentalists are spreading false and inaccurate information, saying that companies are ready to pay taxes and conform to reasonable regulations, but uncertainty scares them.