Ohio's Utica shale is shaping up as a gas-rich, not oil-rich play

http://www.ohio.com/blogs/drilling/ohio-utica-shale-1.291290/ohio-s...

The data appears to show that the Utica shale will be dominated by natural gas more than oil. The oil volumes were lower than had been projected, and that’s likely a disappointment to analysts and energy companies.

"It’s shaping up largely as a natural-gas play," said Tom Stewart, executive vice president of the Ohio Oil and Gas Association. "I’m not disappointed or discouraged by the numbers. … But this is a process that takes time to develop."

It is possible that large quantities of oil may still be found in sections of the Utica shale in Ohio, he said.

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Permalink Reply by Busy Bee on May 16, 2013 at 1:29pm
Where do you believe the best areas are going to bee ?
Permalink Reply by Gary L on May 16, 2013 at 2:00pm

Bob and Jim covered most of the ODNR presentation, however they didn't relate on what

Mr. Mustine said about Bonus Money and Today is a Buyer's Market. The buy and sell strategy.  

Chesapeake wants to sell 10% of a million acres. Enervest wants to sell their Utica after acquiring

a build up then sell for profit that generates 2% of their revenue. HBP strategy enables them to hold on to assets. I still remain optimistic for the oil window as it has narrowed a bit. As of now the wet gas is now being sought after as the most profitable. I heard last week from ODNR that someone recently hit a big oil well in Fairfield County so who can speculate on what the future is going to be.  

Permalink Reply by Billy Park Whyde on May 17, 2013 at 2:47am

HOLD your horses there pardners. There is more than just the UTICA, UTICA, UTICA in Ohio!  Five year old technology in the oil patch is ancient science ten years, who remembers?  For a example take a look at this. http://www2.dnr.state.oh.us/Website/DOG/WellSummaryCard.asp?api=340...

  Look at it closely notice they perforated the Utica but did not frack into the Utica. Hmmm explanation? But the production from that vertical well was not to shaby  when the cost of a vertical  is cheap in comparison to a horizontal.  

  Here is another to look at https://api.ning.com/files/1VO9sMFBIpGGD1qzvAvCzpLAQ-cZTPPXNls2LFvT...

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246,133  barrels of oil over 9 years = 27,348 bbl a year or in this case this well was on 40 acres meaning if the landowner owned all 40 acres and at today's leases at 20% using GOMS calculator = $480,474 a year for just a 10 year average. That's the landowners share not counting the gas! I'll take that any day!

  There are other wells in Ohio that were drilled that produced nicely without today's tech but now we have 3D seismic testing better logging, drilling speeds, fracturing tech and chemicals that were not available 13 years ago.  

  The more they look the more they will find just like gold. There is none in Ohio until you look , yes there is gold in Ohio, not much but we don''t have thousands of people looking for it the way gold rushes did, the more you look the better chances of finding what your looking for.

Permalink Reply by Billy Park Whyde on May 23, 2013 at 2:08am

The little secretes they don' t talk about in the little picture they promote as the biggie?

Permalink Reply by bo boboski on May 16, 2013 at 2:14pm

Yea; RIGHT!  Until they start drilling where there is 80% liguids, instead of 35%, it will be a "gas" play!   There's gotta be a good reason for them to keep poking holes where there's mostly gas,little infrastructure. When they could be going for the oil, that can be trucked out, not really needing pipelines. Don't really understand why having to use pumpjacks is such a big deal either, Isnt that how most of the oil wells are? I'm still  leaning towards the theory that they don't want certain people to know what we are sitting on round here.

Permalink Reply by TM on May 16, 2013 at 2:47pm

I completely agree bo. I don't get why they don't go after the oil either. The oil is here just got to drill in the oil zone and get it out.

Permalink Reply by Kangoo on May 16, 2013 at 3:21pm

The reason they are not going after the oil window right now (and why pump jacks don't help) is  the difference between unconventional (shale) and conventional reservoirs.

In a conventional reservoir the rock pores are big enough (and pore throats are connected well) so that the reservoir fluid (oil and water and gas) can flow into the well. In older wells the reservoir pressure has desclined and once the fluid has entered the well, it no longer has enough energy/pressure to flow up and the well dies. Once this happens one has to install a pump jack. The pump jack, just lifts the oil that has flowed into the well up the wellbore (it's a fluid lifting tool, but doesn't suck oil out of the rock).

In an unconventional reservoir the issue is not a lack of energy for the oil to flow to surface, but that it requires a very high pressure differential (several thousand psi) for the oil (gas has lower viscosity and therefore isn't that difficult to produce) to flow into the horizontal well. That's why a successful unconventional oil reservoir needs among other factors 3 things: low viscous (light oil), high reservoir pressure (geo pressure) and high gas oil ratio. The reason for the gas oil ratio is that as reservoir pressure drops, the gas expands and pushes the oil out of the rock pores. If any or even worse two of the factors are missing, it's most likely an uneconomic area.

These 3 requirements are all in place in the deeper parts of the Eagleford. In the western part of the Utica we are lacking the high geo pressure and the high gas oil ratio.

When you look into the shallow edge of the Eagleford oil window, you'll see that there are poor and unceconmic wells for the same reason that producers are struggling in the Utica. This is why it's not just a question of buying some pump jacks or a quick 'new technology development'.

Yes, there are also pump jacks in the Bakken and Eagleford, but that's after a year or even longer and at that time production has seriously declined (but they have produced a lot of oil by then and the well is mostly paid off). As a rule of thumb, if a company puts a pump jack on a new unconventional well (within weeks of starting flow tests), then there is a good chance the well will never be economic.

Permalink Reply by Tony Yurina on May 16, 2013 at 4:07pm

I need some help understanding how a conventional pumping unit would work in a horizontal well?

My thoughts are the sucker rods and pump would likely only be set up to the kick off point, I am not too inclined to understand how the vertical pumping unit technology can be applied to a horizontal lateral? 

So far, no one has been able to explain to me, how a conventional pumping unit can be installed out in a horizontal lateral several hundred feet?

Then comes the problem to get the oil flowing through the frac proppant after a couple months of well production when the geo pressure reduces significantly. 

I firmly believe there is a lot of gray matter being applied to solve the current dilemma, time , money and experimentation, evaluation of data will over time bridge this gap. 

Permalink Reply by Kangoo on May 16, 2013 at 4:26pm

Pumps are not installed in lateral sections.

They are installed above or just at the kick off point regardless whether it is a horizontal or vertical well. People have this idea of pumps sucking out oil from the reservoir, they are really just helping to overcome the hydrostatic head, nothing more nothing less. The oil must flow from the nano-darcy rock into the frack and from the frack into the wellbore by the differential pressure between pore pressure and bottom hole pressure (which the pump helps to reduce).

Pump innovation won't help to improve well economics in the oil window. It would have to be technologies to improve the frac conductivity or technologies that increase the stimulated reservoir volume significantly.

These are things people have been trying to achieve for decades.....

The only short term option to make the western edge economic would be if companies could drastically get drilling/completion costs down to maybe 3 million or so (all in, which given the depth/drilling issues I can't see happening soon). At $3 or $4 MM well costs instead of 7 or 8, also weaker/lower productive oil window wells would become economic...... 

 

 

Permalink Reply by Joseph-Ohio on May 22, 2013 at 12:58pm

I've read a little about steam assisted lifting from reservoirs - where do you stand on that take ?

Doesn't gravity also come into play ?

Interested and curious.

Permalink Reply by Gary L on May 16, 2013 at 4:20pm

Kangoo,

Can you give any insight with GE developing new technology in their new research center with regards to lifting oil out of dense shale formations. They also claim it will work for older wells that met their economical potential giving the producer most of the oil that was left behind. 

Would this work in unconventional shale? Thanks for you explanation.   

Permalink Reply by Kangoo on May 16, 2013 at 4:34pm

Gary,

 

I unfortunately can't predict the future either (but I've been working on various unconventional reservoirs across North America for a while and just can give you my opinion).

GE's technologies will more apply to extending the life of existing unconventional wells (in a Bakken/Eagleford), than making lower productive ones more eonomic.

 

As mentioned further up, it's really improvements in fracturing technology combined with radical cost reduction (which could be possible with all the learnings drillers are making and lot of new service companies coming into the market making it more competitive) that will make the play work. I don't think lifting technologies will be the ones that achieve the breakthrough......

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