Discussion on Horizontal drilling of Shale gas Its benefits and Challenges Introduction

Unconventional resources are those that have been bypassed by conventional oil and gas recovery technologies for decades, because they were not considered economically feasible to produce. The improvements in geophysical and geochemical exploration, and drilling and completion technologies since the early 1990s have opened up vast new resources, both onshore and offshore. Unconventional gas reservoirs are found worldwide, including onshore US, anada, !ustralia, "urope, #igeria, $ussia, hina, and %ndia. Unconventional resources encompass tight oil and gas formations, shale gas, coal&bed methane, heavy oil, oil shale, deep and ultra deep water plays, and gas hydrates. "ach of these types of play re'uires uni'ue strategies to develop and must meet increasing challenges and competition for the water availability and infrastructure to exploit the resources. #atural gas production from hydrocarbon rich shale formations, (nown as )shale gas,* is one of the most rapidly expanding trends in onshore domestic oil and gas exploration and production today. +ver the past decade, a wave of drilling around the world has uncovered giant supplies of natural gas in shale roc(. ,y some estimates, there-s 1,000 trillion cubic feet recoverable in #orth !merica alone.enough to supply the nation-s natural&gas needs for the next /0 years. "urope may have nearly 100 trillion cubic feet of its own. !s companies li(e 2evon "nergy, hesapea(e "nergy, "+3 $esources and 4T+ "nergy reported record natural gas recovery in the ,arnett5 exploration for similar plays in other basins began in the period from 1001 to 1010.

How Shale is Formed

Shale is a fine&grained, sedimentary roc( composed of mud that is a mix of fla(es of clay minerals and tiny fragments 6silt&si7ed particles8 of other minerals, especially 'uart7 and calcite. These minerals become shale by a process of compaction. !s the fine particles that compose shale can remain suspended in water long after all other material has been deposited Shale therefore, are typically deposited in very slow moving water and are often found in la(es and lagoon deposits, in river deltas, on floodplains and offshore from beach sands. They can also be deposited on the continental shelf, in relatively deep, 'uiet water. The shale of interest, for shale gas, tends to be blac( in color. The dar( color is the result of the presence of carbon 6organic material8 and indicates an oxygen free 6reducing8 sedimentary environment.

Drilling for Shale

urrent methods of producing shale gas depend on multi&stage hydraulic fracturing or hydrofracs in hori7ontal wellbores. %ndividual wells may re'uire from 0 to 11 or more hydrofrac stages and the hori7ontal length may extend up to 10,000 ft. The hydrofracs re'uire large volumes of fresh water, ranging from 1 to 10 million gallons per well. +ne of the important characteristics of shale gas plays is the degree of brittleness in the shale. Shales with the desired degree of brittleness can be artificially fractured to create induced permeability which allows gas to flow. Since the distance a single hydraulically induced fracture can extend is limited, multi&stage fractures are re'uired throughout the length of the hori7ontal borehole to access the maximum formation surface. Some shales are too plastic or ductile to allow hydrofracing and can9t accommodate induced fractures to increase permeability. There are two (ey well design features which differentiate a shale well from a normal well. The hori7ontal drilling through the shale interval to maximi7e the amount of roc( to be completed and the hydraulic fracturing process which is re'uired to get economic gas rates from the well. 2evelopment wells are typically hori7ontal through the target shale5 the length of the hori7ontal section can be /000- or greater, this allows for several se'uential fracture stimulation treatments to be run to enhance productivity. The hydraulic fracturing process is a critical component in ma(ing a shale well successful. This is done by pumping water into the well bore, at pressure, to create and propagate a fracture in the surrounding roc( formation down hole. This is crucial in low permeability roc( as it exposes more of the formation to the well bore and greater volumes of gas can be produced by the increased surface area. :ithout hydraulic fracturing the wells would not produce at an economically feasible rate.

Horizontal Drilling
;ori7ontal drilling is the process of drilling a well from the surface to a subsurface location <ust above the target oil or gas reservoir called the )(ic(off point*, then deviating the well bore from the vertical plane around a curve to intersect the reservoir at the )entry point* with a near&hori7ontal inclination, and remaining within the reservoir until the desired bottom hole location is reached. =ost oil and gas reservoirs are much more extensive in their hori7ontal dimensions than in their vertical 6thic(ness8 dimension. ,y drilling a well which intersects such a reservoir parallel to its plane of more extensive dimension, hori7ontal drilling exposes significantly more reservoir roc( to the well bore than would be the case with a conventional vertical well penetrating the reservoir perpendicular to its plane of more extensive dimension.

Figure 1: Greater length of producing formation exposed to the wellbore in a horizontal well (A) than in a vertical well (B).

The achievement of desired technical ob<ectives via hori7ontal drilling comes at a price. ! hori7ontal well can cost up to >00 percent more to drill and complete for production than a vertical well directed to the same target hori7on. 2ue to its higher cost, hori7ontal drilling is currently restricted to situations where vertical wells would not be as financially successful. %n an oil reservoir which has good matrix permeability in all directions, no gas cap and no water drive, drilling of hori7ontal wells would li(ely be financial folly, since a vertical well program could achieve a similar recovery of oil at lower cost. ,ut when low matrix permeability exists in the reservoir roc( 6especially in the hori7ontal plane8, or when coning of gas or water can be expected to interfere with full recovery, hori7ontal drilling becomes a financially viable or even preferred option producing 1.0 to ? times the rate and reserves of vertical wells. The higher producing rate translates financially to a higher rate of return on investment for the hori7ontal pro<ect than would be achieved by a vertical pro<ect.

Comparison between vertical drilling and horizontal drilling

Shale is a very fine grained roc(, and though gas can gather in the small pores of its structure, if the gas is to flow to a well, then it has to migrate through passages that are very narrow, and thus very resistive to that flow. ;owever, as

the shale has been formed under geological pressure and over time, the pressures not only compressed it from mud into shale, but they also caused it to fracture. %n the =arcellus shale, for example, the crac(s that occurred in the shale are roughly vertical, and form two sets that are perpendicular to one another. The first advantage that a hori7ontal well has, over a vertical one, is that the well can penetrate a long way through the roc( that carries the oil or gas 6+38. The amount of +3 that comes from the roc( is, in part, a function of how long the length of well is in the roc( that carries it. So that while a vertical well might produce say @00 bd from a well that goes straight through a 100 ft thic( layer of oil&bearing roc(, when the well is drilled so that it goes out he e'uivalent of / miles hori7ontally through the oil&bearing roc(, then the production per day may go up to 10,000 barrels.

(Comparative production from a vertical and horizontal natural gas well. Notice the gain in production, but much shorter life of the horizontal well.)
The second advantage relates to the way in which the fractures lie in the roc(. ,ecause they are vertical, a vertical well won9t hit very many of them, and so since these fractures provide an easy flow of +3 to the well, rather than the difficult path through <ust the roc(, then the well will not show very much production. 6!nd this was the case with many of these shales when they were tested earlier.8 ;owever if the well is hori7ontal 6see figure8 then the well will intersect many of these fractures and in drawing the fluid from them will also provide an easy path for fluid to ease out of the roc( into the fracture paths, so that the entire roc( can be more easily drained.

Ancillary enefits
Airst, operators are often able to develop a reservoir with a significantly smaller number of wells, since each hori7ontal well can drain a larger roc( volume than a vertical well could. The aggregate surface )footprint* of an oil or gas operation can be reduced by use of hori7ontal wells. Second, use of a hori7ontal well may reverse or significantly delay the onset of production problems that engender low production rates, low recovery efficiencies, andBor premature well abandonment. This can significantly enhance oil and gas recovery as well as return on investment and total return. Third, having the well cased into the producing formation during drilling of the hori7ontal section allows the operators to use lower density drilling mud. They can even allow the well to produce during drilling operations, preventing much of the formation damage that normally occurs when mud density must be high enough to (eep well bore pressure greater than formation pressures.

!rocedure for horizontal drilling

After a well is drilled, a fracture stimulation operation is performed to ready the well for production. The following illustrates the process for a horizontal, deep shale gas well. C Airst, the well is engineered to ensure the casing and cementing program protects fresh water, and the well can reach the intended targets. C ! well is then drilled vertically through many thousands of feet of solid roc( layers D well below any drin(ing water a'uifers D and then hori7ontally into the shale formation. C !s the wellbore is drilled, state regulations re'uire that it be reinforced with multiple layers of protective steel casing and cement, designed to stabili7e the wellbore and to protect groundwater and fresh water a'uifers. The casing is pressure tested after cementing to ensure the integrity of the system. C Then, a fracture design tailored to the specific formation9s geology is created using fracture modeling software. C :hen fluids are used in fracturing, the li'uid is composed mostly of water and sand and is then pumped into the formation at a calculated rate and pressure to generate carefully designed millimeter&thic( fissures or fractures in the target formation. The fluid is typically comprised of 99 percent water and sand, with less than 1 percent special& purpose additives. These additives are needed to enable the water&sand mixture to transport the sand deep into the fracture and then change its properties to allow the water to be removed while the sand remains, holding the fracture open. 2uring the fracturing operations, in<ection pressure, volume and rate are carefully monitored to ensure the fracture meets the design parameters. C Aor the well to produce natural gas, an initial volume of produced water and sediment is removed and collected at the surface to be recycled or disposed of at state&regulated disposal facilities once the operation has been completed. C The newly created fissures are propped open by the sand. This allows the natural gas to flow into the wellbore and be collected at the surface.

Special "egulatory Considerations

Eermitting and spacing processes use setbac(s from the spacing unit boundaries to protect correlative rights and prevent waste. onsideration must be given to the different drainage patterns of hori7ontal wells and the small tool errors inherent in hori7ontal drilling that can be magnified over very long distances. $egulatory inspection and oversight must be increased significantly. This is accomplished through more fre'uent drilling rig visits and re'uiring certified well bore surveys. The geometry of hori7ontal well bores greatly impacts collection and dissemination of data such as cores, bottom hole pressures, gas oil ratios, and well logs. The significantly larger well spacing and greater distance between wells impact oil transportation and measurement as well as gas gathering and flaring.

Shale gas scenario# China and India

hina and %ndia are both pursuing shale gas development, as it could provide an abundant and cleaner source of energy for economic development. %t remains to be seen what sorts of shale gas reserves exist in those countries, but the hinese government hasn9t let that stop it from announcing ambitious shale gas development goals. Fast #ovember, Eresident ,arac( +bama and Eresident ;u Gintao of hina announced a US& hina Shale 3as $esource %nitiative aimed at promoting Henvironmentally sustainable development of shale gas resources.H %n Guly, the state& owned hina #ational Eetroleum orporation announced that it aims to produce 000 million cubic meters of shale gas by 1010. onoco Ehilips, $oyal 2utch Shell and ,E are all wor(ing with hina-s state&owned oil and gas companies to explore for shale gas there. =any of these big international oil and gas companies, including U.S. companies such as "xxon and hevron, were late to the shale gas game themselves, and are now playing catch&up by getting in on the early stages of shale gas development in other countries, and by partnering with the smaller, independent companies that pioneered the uses of hydraulic fracturing and hori7ontal drilling. The drilling technology was seen as ris(y at first, and the economics weren-t yet proven, so it was the independent companies . notably hesapea(e, $ange $esources, and 2evon "nergy . that pioneered the practice.

%ndia is so far lagging behind in the development of its shale gas industry, but is trying to catch up 'uic(ly. Fi(e hina before it, %ndia is pursuing a partnership with the US 2epartment of "nergy to <ointly develop shale gas reserves. %n Guly, $eliance %ndustries, %ndia-s largest private company, ac'uired a /0 percent sta(e in !tlas "nergy-s leasehold in a shale gas field in Texas.

Shale gas future: counterview

=any people 6including $ussian Erime =inister Iladimir Eutin and many :all Street energy analysts8 aren-t convinced that shale gas has the potential to be such a game changer. Their arguments revolve around two main pointsJ that shale&gas exploration is too expensive and that it carries environmental ris(s. There is so much cheap and easy conventional gas available overseas that shale gas is not expected to play much of a role in international mar(ets. =aybe hina and "urope will increase shale production, but outside those areas there really isn-t much of a need. "%! estimates that shale gas has the potential of accounting for up to ?K to total gas supply by 10>0. !nd most of that ?K is due to U.S. development. The s(eptics claim "stimated Ultimate $ecovery 6"U$8 in shales is much lower than stated by industry, analysts and reserve engineers. This is because their decline method is technically flawed and is biased to under&estimate recovery. They suggest that it is appropriate to assume ,arnett Shale wells exhibit exponential decline after one year 6and not apparent hyperbolic behavior8. S(eptics further suggest that it is inappropriate to use type curves because it ma(es the data loo( smoother than it really isLand suggest that all wells should be analy7ed individually.

Appendix:

REFERENCES
[i !ar" #urlans"$ %alt: A &orld 'istor$( naturalgas.org [ii httpJBBwww.dec.ny.govBdocsBmaterialsMmineralsMpdfBnyserda1.pdf

NiiiO httpJBBwww.epmag.comB=aga7ineB100@B?Bitem/1PP.php5 article was originally published in the <ournal of the anadian Society of "xploration 3eophysicists $" +$2"$, Gune 100/, pp. >/&/> NivO httpJBBwww.epmag.comB=aga7ineB100@B?Bitem/1PP.php5 NvO 3iddens, Eaul ;., Early Days of Oil, Erinceton University Eress, 19/@. NviO httpJBBwww.naturalgas.orgBnaturalgasBextractionMonshore.asp NviiO httpJBBwww.seed.slb.comBenBscictrBwatchBmudBchar.htm NviiiO httpsJBBwww.dmr.nd.govBndgsB#ewsletterB#F0>0@BpdfsB;ori7ontal.pdf5 ;ori7ontal 2rilling, Fynn ;elms, 2=$ #ewsletter, I. >0
[ix httpJBBwww.slb.comBcontentBservicesBstimulationBfracturingBindex.aspQ