RV BNL WOT Ten nanrda Samaniego Ne ex duzco Trends in Tight Gas Sand Production Dr. Robert A. Wattenbarger has over 40 years experience in the petroleum industry, specializing. in reservoir engi neering with emphasis on reservoir sim ulation, well test dl gas well performance, He was viee president of Scientific Software Corporation in Denver for ten years after bein; involved with that company's forma: ton. Prir to that position, he was a fleld engineer and reservoir engineer for Mobil Oil Corporation, Sinclair Oil Company, Oil Recovery Corporation, and Mobil Research and Development Corporation in Texas, Oklahoma, and South America. In addition to years of practical applica tions, he has written over 100 technical pepers and other publi cations. He received his B.S. and MS. degrees from the Tulsa and his Ph.D. degree from Stanford University. Dr. Wattenbarger is a professor of petroleum engi neering at Texas A&M University University of The growth of tight gas sand production in the US. has been steady and fairly dramatic the las! few years. The term imeabilty must be less than 0.1 milldareies.A reservoir is clas fied as “tight gas” if it meets this criterion. Figure I shows production rates categories of s preduction inthe U.S. as sand, coal bed thane, and gas shales. It can be scon that tight gas sands domi nate unconventional gas production, Tight gas sand production has increased from 2S Bet/d in 1970 10 9.2 Befld (about 3,400 Bef/year) in 1996. This represente tion in 1970, but a much more significant 17% in 1996, Altho ceal bed methan sh they are much less significant than tight production are increas FIGURE 1: Unconventional gas preduction inthe US, All three sources are growing bu tight gas production dominates thi category", ily 2002, Volume 41, No. 7 Figure 2 shows where the tight gas sand regions are located. 1 3 shows how tight gas sand production has grown in the major regions from 1970 to 1996. Except for the San Juan Basin the production rate has continued to climb for all regions durin this time. The South Texss re is not shown in Figure 2. In genera, the regions have ine production rate not only by adding wells but also by achievin ity per well. I jot is near the Mexican border but more product mproving technology has ‘major factor in increasing well productivity. tense fon gas basin inthe US. FIGURE 3: US. tight gas sand production b regions continu to iner region, Note the se except San Juan Basi Economic Factors ‘The growth of tight eae prod all growth of the g ic factors. Some observers have been predicting natural gas would eventually become more valuable and m plentiful than cil. Fifty years ago, gis was regarded a ly a nuisance that came with the discovery and production of cil. It for decades thatcommon to dispose of produced associated gas by venting it to the atmosphere because of te limited market and transportation for gas and the high cost of soring gas by reinjection. Figure 4 shows that the relative importance of gas and oil has ‘gradually changed over the years to favor gas. Ges production has exceeded oil production every year in the U.S. since 1969 on an energy content (BTU) basis, except for the mid-1980s, and the margin has been growing in recent years, More importantly, the wellhead revenue for gas has exceeded the wellhead revenue for cil since 1992, and the margin is becoming greater. The profit ‘comparison is even more dramatic since gas is generally cheaper to find, develop, and produce. number of changes have taken place over the last Few deciles to bring about the growth of uss production, PIGURE d: Total US. gas vertical and ol rn il production rates. Note that the les are chosen to make the BTU content equivalent for gas The Gas Market ‘The demand for gas in the U.S. declined after the early 1970s. ‘The main reason was a perceived shortage of gas which led to fuel switching, Legislaion then restricted the use of gas since it was thought to be a limited resource. These factors led to the decline of gas production until 1986, ‘The most important factor in the gas market has been the way in which gas is sold. Legislation in the late 1980s created 2 sepa- ration between pipeline companies and gas producers. This led to freer market in which producers received competitive prices for their pas, Previously, proshcers were paid according ta priow long term negotiated contracts which did not reflect current inarket prices. These long-term contracts tended to hurt the producer and put a damper on gas production during periods of rising gas prices. During periods of falling prices, these “take or pay” contracts could be disastrous for the pipeline companies. Since 1986, gas demand hs been relatively steady and gas pro- duction bas continually incressed. Gas prices have fluctuated but hhave been higher than before. The gas price (pet BTU) at the well- hhead compared to oil price at the wellhead is now about equal, whereas the gas price was only about 30% of the oil price in the carly 19708", Gas Storage Underground gas storage has increased dramatically in recent years, particularly in regions near producing fields, This keeps ‘wells producing throughout the year rather than the market cur= {ailment that was commion in previous years, This has the effect of increasing annual revenue, making gas wells more profitable, Tax Incentives for Tight Gas In addition to the general improvement of economies for gas, there have also been some added incentives for tight gas wells. The U.S. government issued a special tax incentive for about a ter-year 18 period for wells which qualified as tight gas wells. This incentive as equivalent to an increase of about $025/Mef in gas price. This as especially significant when gas prices were low. Currently, this incentive is worth about $I.O0/Mef but will soon expire. ‘Texas has also provided incentives for tight gus produstion since the early 1990s. The state production tax (severance tex) is ‘waived for tight gas wells—a tax that is normally 7.5% of gross revenue for gas well. This incentive continues tobe an impertant inducement for tight gas production, Physical Characteristics of Tight Gas Reservoirs ‘The fluid properties ofthe gas itself are not particularly remark able, Most tight gas is fairly dry with condensate yields less than 20 STB/MMef, The condensate probably only occars in the well- bores and separators and does not form in the reservoir itself, A \ypical tight gas sand reservoir may be characterized as low per meability, deep, thick, high pressure, and requiring large hydraulic fracturing treatments to produce at commercial rates, These for. ‘mations often have unusually low electrical log resistivity, are very heterogeneous, shaly, and behave as though they are compartmen- ‘alized pockets of gs. Low Permeability Just how low the permeability isin individual reservoirs is not tsually known precisely because of the difficulty in obtaining reli= able core measurements that represent the reservoir. AS noted before, the official requirement is that permeability must be lower than 0.1 millidarey for the reservoir to qualify as a tight gas reservoir. However, some reservoirs have permeabilities estimated 'o be as low as 0.01, 0.001, or even 0.0001 millidarcies (10, 1, of even 0.1 microdarcies, respectively) according to reservoir analy sis. The estimation of permeability according to well test and pro- duction performance analyses is subject o individual interpreta- tion and is usually somewhat uncertain, Interpretation usually depends oa assumptions regarding the length of hydraulic frac lures or the presence of natural fractures. Natural Fractures Although large hydraulic fracturing jobs are required to obtain satisfactory production rates, itis likely that the occurrence of nat- ural fractures is probably a factor in making wells produce at com: mercial rates. Sometimes natural fractures are apparent from core analysis and other dita. In some cates, the natural fractures ee £0 small that they may not be noticed, but the slightest hint of a frac- ture may be a primary flow conduit in rocks that are practically impermeable. Some of the most compelling reasons for believing that these reservoirs are naturally fractured are deduced from observing long-term flow behaviout. ‘The natural fracture system leads to a dual porosity produc- tion/pressure behaviour, The type of dual porosity behaviour seems fo be the transient type, that i, the flow within the mat to the fracture is transient. It is speculated that this transient flow within the matrix towards the natural fractures eauses the linear slow behaviour that is often observed. This would explain how transient times can be so extremely long—sometimes as long as 20, High Pressure Not all tight gas reservoirs are high pressure, but the trend is certainly in that direction as dilling and exploration goes deeper and deeper. Some recent reservoirs have had initial pressures greater than 13,000 psia. These are occurring at depths that make the initial pressure "gradients" as much as 1.0 psiff. Deep reser- voirs tend to have lower permeability and contain gas rather than so the trend for more tight gas reservoirs will continue as rilling goes deeper, ‘The main benefit of high pressure is to allow large pressure ‘Journal of Canadian Petroleum Technologyhydraulically fractured, and the frac jobs Were relatively small when the wells were hydraulically fracture. ‘The higher production rates after 1994 represent newer wells ¢ frac jobs—typically 301,000 pounds of proppant info three of four perforited intervals, These h initial production rates—often in the reigh- wells had very hi borhood of 20 MMefid, The latter high rate procvetion acwwally comes from a different reservoir which was an extension of the original reservoit—a step-out inthe other side ofa fault block. But the reservoir characteristics were similar (o the original reservoir and the reservoir pressure was likewise that of the original pressure. Exploration and Development The new reservoir was discovered with the help of 3D seismic snd interpretation tools. Modern tools include newer 3D computer visualization sofiware (which ean be run on PCs) that was not available until recenily. This allows more rapid and accurate eval- uation of new prospects or step-puts near existing production, Another huge factor is simply the knowledge and confidence that these ty There have be reservoirs can now be economical rn many eases where explerationists knew where the ais was bat did not know ¢ 1 it would be economic. So newer teonomic and completion ends are causing re-evaluation of passed-over prospec's from earlier times, Stimulation Many tight gas wells of 30 years ag duced without significant Stimulation, Hydraulic fracturing jobs were relatively small by current standards and sand was oftea used 38 a proppant. Consequently, initial production rates were modest. By contrast, the fracing techniques and magnitude of the jobs have dastically changed in recent years. Limited entry fraé jobs are designed with several stages of injection. Bauxite peoppant is com monly used to prevent proppant crushing and reduce imbedding at the greater depths—as much as 300,000 pounds of proppant being. ised is not unusual. This technology has continuedto develop with ihe help of research, operational experience, and the monitoring of long-term well histories. We will probably expect to see continual improvements in this Key techaology area in the Future o were completed and pro- mes ROLEUM SOCE Summary The development of tight pas production has been a gradual, but steady, trend for several decades. It is now common to see oppor unities in tight gas development that were simply not practical several decades ago. The development of these opportunities has depended on a number of factors: the gradually improving eco nomics of gas; routine improvements in drilling, completion, an simulation techniques of deep reservoirs; and, the general experi ence of operators which make tight gas production attractive. All ff these trends should continue to improve in the fore: and reserves, This tend towards tight gas produeticn should even tually spread worldwide, future and put emphasis on developmest of tight gas produc NOMENCLATURE Bef = 109 standard eubie feet D =day Mef = 1,000 standard cubic feet MMef = 106 standard eubicf REFERENCES I HOLDITCH, S.A. The Increasing Role of Unconvertional Resersoies in the Futuee ofthe Oil and Cas Business a Distingaished Lecture as SPE President, 2601 ~ 2002, WATTENBARGER, R.A., and VILLEGAS, M. Trends in US. Natural Gas Production; Adve t ss in the Beonomics of Energy and Resonaces, Moroney, LR. (ed), Vol. 9, 1995, 3. DEGOLYER and MCNAUGHTON, ‘Twentieth Century Petroleum Stasis; 2000 Edition, Apri 2001 4, ENERGY INFORMATION AGENCY, Gas and oll price dats feom ‘reports on Internet Web sie 5. AREVALO, J.A., WATTENBARGER, R.A., SAMANIEGO, F, and PHAM, T-, Som se8 of Long-Term Litear Flow ie Tight Gas Wells; Petoewm Society paper 2001-015 presented at Casadian + 2001, Calgary, ne 12-14, 2001 S.V,, WATTENBARGER, RA. SAMANIEGO, F, et al, Analysis of Long-Term Performance in ‘Tight Gas Wells: Field Examples: paper SPE 74300, Villakermosa, Mexico, February 10 ~ 12, 2002. Internetional Petroleum Confer 6. AREVALO, J.A, GANPULI Watch for the new... Pe Prey ele CTT eT) Pre titty Journal of Canadian Petroleum Technology