Curious comment made during todays Markwest shareholder meeting

Randy Nickerson, Sr VP & Chief Commercial Officer for Markwest said during todays shareholder meeting:  

 

“Utica;  we all know the southern part of the utica does not have as much rock (as the northern part), but the point pleasant, the key zone in the southern part has this phenomenal frac barrier.   We're seeing wells north of 15 million mcf, some north of 20 million mcf/day and hanging in there at 12 mcf with 5 gal/mcf of c2+.    Turning out to be very rich.   To the west they are richer, but we're not seeing the 20mil/day, but more like 2, 3 or 4.”

 

When I looked up “frac barrier”, this appears to be a geologic feature (like a natural perpendicular crack) that stops propagation of the crack induced during the fracturing event.  It sounds like a negative thing, but he spun it as a positive thing.    What gives?

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Permalink Reply by bo boboski on May 29, 2013 at 7:26pm

Markwest doesn't have to please shareholders like the O&G co.s & drillers do. Don't have to lie about what's down there in eastern ohio. Don't have to fib about production results to downplay the Utica/pt.pleasant to keep lease prices down. Remember, these co.s have dummy corps. out there trying to buy up peoples leased mineral rights that they may or may not have already leased @ various % rates. Right now, they want landowners to think the Utica's a bust, not worth much, so selling your mineral rights looks inviting!   Time will tell!

Permalink Reply by Hunter on May 29, 2013 at 8:08pm
Can you post link. I couldn't find it thanks
Permalink Reply by The Hiker on May 29, 2013 at 8:25pm

http://investor.markwest.com/phoenix.zhtml?c=135034&p=irol-pres...

Click the replay webcast.   This quote comes from the Q&A session after the canned presentation.

Permalink Reply by H Bale on May 29, 2013 at 8:40pm

If you go to page 12 of this link: http://www.searchanddiscovery.com/documents/2007/07023bowker/images...

about halfway down the page. The context in which "frac barrier" is used seems to indicate that it is a good thing and that a lack of these types of barriers, at least in the Barnett, diminishes the effect of the fracking process. The barriers stop wave propagation out of the desired area.

Horizontal barriers would be good, vertical (if that is possible) would not be unless by chance the fracking happened to occur near the outer boundaries of that particular formation. 

I'm not an o&g person, but that is what I got out of the paper. 

Permalink Reply by Tony Yurina on May 29, 2013 at 10:39pm

From the above link and associated Barnett Shale document.

The next hurdle to overcome in order to expand the play is discovering a technique to stimulate the shale in areas where the Barnett is not bound above and below by effective frac barriers. In areas where the Barnett is not bound by strong, dense Viola/Simpson section below and Marble Falls Limestone above, the hydraulic frac quickly migrates out of the Barnett. If the fracture moves out of the Barnett, two things can happen:
• At best, the frac energy is wasted and the resulting well will behave like it was barely stimulated, or
• At worst, the frac will move into a porous and water-saturated interval (Viola or Ellenburger) and the resulting well will be a very poor producer with huge production problems related to the high salinity of the produced water.

Given this information, a "phenomenal frac barrier" must be viewed in a positive light for the Point Pleasant interval.   

My understanding from this read is if there is a satisfactory frac barrier, then the frac will be kept with in the desired pay zone and as an added benefit, the frac stimulation can be steered or controlled with the micro seismic technology to a higher degree of successful well stimulation.

Permalink Reply by Jack Straw on May 29, 2013 at 10:47pm

RE: "Horizontal barriers would be good, vertical (if that is possible) would not be"

Horizontal Barriers are barriers to the vertical propagation of fractures.

The hydrocarbons are trapped within the Utica.

"Frac barriers" above or below the Utica would help maintain the bulk of the fracturing within the Utica (a good thing).

There is a finite amount of energy imparted into the Utica during a frac job, the greater the portion of that energy that is retained within the Utica the better; horizontal frac barriers assist in that regard. 

Below is the link to a nice short well illustrated article on the Marcellus; it likewise applies to the Utica:

http://www.dcnr.state.pa.us/cs/groups/public/documents/document/dcn...

 

Frac barriers are discussed towards the end of the article.

 

JS

Permalink Reply by H Bale on May 30, 2013 at 10:58am

JS

Thanks for the link. A good basics for those of us who don't know "squat" about the drilling process or what is involved

Permalink Reply by searcherone on May 29, 2013 at 10:51pm

Keep in mind that I don't have a science background, but this sounds like from what everyone has posted that the frac barrier holds the energy of the frac within the shale layer producing the fracs/openings for the gas to flow freely.

Permalink Reply by The Hiker on May 30, 2013 at 9:37am

I agree with what you're saying;  Markwest did not actually say that the south is better than the north, but inferred it.  They were, after all talking to a bunch of analysts that could affect their fortunes, so certainly would emphasize the positive things.... and their operations are moving towards the south.  Hopefully, the analysts know what a frac barrier is.   Didn't Chesapeake make a comment about "missing the sweet spot", or something like that, indicating that the southern acreage, though thinner, was more productive?  Well results, though sparse, seem to echo this.  One presentation I saw indicated that the rock porosity increased as you moved south.  Put all of this together with the frac barrier comment ("phenomenal"-this indicates a comparison to something), the locations chosen for the gas plants, and one might reach the conclusion that things are going to be more productive in the "southern" portion of the play.   My acreage is in the southern portion, so perhaps I'm biased.  I'm just collecting the evidence.  Time will tell.

They did have a whole lot to say about the Bluegrass pipeline, since it would represent competition (if built) to their operations here (remember, they were talking to a bunch of analysts and needed to explain this).  They tried their best to spin it in a positive light.

Thanks to Dennis, HBale, Jack and Tony for the explanation!  I get it.  I imagined a frac barrier as something to blunt or pin the propagating crack tip as it expanded away from the bore hole horozontally, but didn't understand the problem of energy loss as the crack entered unproductive areas above or below the shale layer.  Pretty cool stuff.

Permalink Reply by jerry allen on May 30, 2013 at 10:26am

Where is the line between the North and South play?

Permalink Reply by The Hiker on May 30, 2013 at 1:41pm

I'm sure there are a lot of opinions on this one, but Markwest mentioned a "four county area" in the "southern part of the play".  My guess would be Noble, Monroe, Belmont, Guernsey.  Hard to imagine that Harrison wouldn't also be included.....

Permalink Reply by searcherone on May 30, 2013 at 1:51pm

Perhaps Harrison and Carroll are the "central" part of the play.

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