Posts Tagged ‘horizontal wells’

Horizontal Drilling to Penetrate More Fractures

The fractures (also known as “joints”) in the Marcellus Shale are vertical. So, a vertical borehole would be expected to intersect very few of them. However, a horizontal well, drilled perpendicular to the most common fracture orientation should intersect a maximum number of fractures.

High yield wells in the Marcellus Shale have been built using the horizontal drilling technique. Some horizontal wells in the Marcellus Shale have initial flows that suggest that they are capable of yielding millions of cubic feet of gas per day, making them some of the most productive gas wells in the eastern United States. Although some experts are very optimistic on the long-term production rates of these wells, it is too early to determine their productive life or long-term yield.

A second method is used to increase the productivity of a well. That is to increase the number of fractures in a well using a technique known as “hydraulic fracturing” or “hydrofracing”. This method uses high-pressure water or a gel to induce fractures in the rock surrounding the well bore.

Hydrofracing is done by sealing off a portion of the well and injecting water or gel under very high pressure into the isolated portion of the hole. The high pressure fractures the rock and pushes the fractures open.

To prevent the fractures from closing when the pressure is reduced several tons of sand or other “propant” is pumped down the well and into the pressurized portion of the hole. When the fracturing occurs millions of sand grains are forced into the fractures. If enough sand grains are trapped in the fracture it will be propped partially open when the pressure is reduced. This provides an improved permeability for the flow of gas to the well.

Copyright: Geology.com

Both vertical and horizontal wells are used in shale gas drilling and completion; however, horizontal wells are the increasing trend due to both environmental concerns and economic efficiency (DOE, 2009). Horizontal drilling allows more exposure within the formation to optimize capture of natural gas as well as reducing the environmental footprint of drilling activity (DOE, 2009). The United States Department of Energy’s recently released document on shale gas development in the United States explains that “a vertical well may be exposed to as little as 50 ft of formation while a horizontal well may have a lateral wellbore extending in length from 2,000 to 6,000 ft within the 50-300 ft thick formation” (DOE, 2009, p.47). As such, surface disturbance and impacts to wildlife and communities are reduced while providing optimal gas recovery; considering 16 vertical wells per 640-acre section of land would disturb 77 acres, the equivalent in horizontal wells (4- horizontal wells) would disturb approximately 7.4 acres (DOE, 2009). In addition to reductions in surface disturbance, horizontal wells allow for development in areas previously considered unavailable, primarily urban and environmentally sensitive or protected areas. Well pads can be located away, or ‘setback’, from residences, roadways, wildlife habitats and other protected areas without hampering access to available gas reserves.

In order to recover the shale gas after drilling a well, current industry practice is to hydraulic fracture the formation to stimulate the near wellbore area and facilitate the release of natural gas trapped within the shale. Hydraulic fracturing is a process whereby a fracturing fluid, primarily water, is pumped into the formation under pressure at a calculated rate to form fractures and cracks within the formation, providing a pathway for the gas to migrate to the wellhead for recovery. Sand or other granular materials are added to the fracturing fluid to help ‘prop’ open the newly created fractures after the fluid has been removed from the formation (ALL, 2008a). Additional chemicals may be added to the fracturing fluid for specific engineering purposes; these additions may include friction-reducing agents, biocides and various stabilizers to prevent corrosion of metal piping in the well (DOE, 2009; ALL, 2008a). Depending on the formation and well characteristics, multiple fracturing procedures may be performed in order to fully develop the well for gas recovery (DOE, 2009). While each well and geologic formation is unique, continuing advances in horizontal drilling and well completion practices provide additional reductions in environmental impacts from oil and gas activities while providing the nation’s critical energy supply.
Copyright: GoMarcellusshale.com

N.J. gas firm eyes $300M income

ANDREW MAYKUTH The Philadelphia Inquirer

A southern New Jersey gas firm that bought a $2 million Marcellus Shale interest in 2008 says it might generate $300 million in income over its lifetime.

South Jersey Industries Inc., the Folsom, N.J., company that owns South Jersey Gas and several nonutility energy businesses, disclosed to analysts that its purchase of mineral rights in northern Pennsylvania could pay off handsomely.

Chief executive officer Edward J. Graham, speaking to analysts about the company’s annual earnings, said two horizontal wells in which South Jersey Industries has a stake will begin producing income this quarter.

He said the gas operator, St. Mary Land & Exploration Co., of Tulsa, Okla., was still tying the wells to a pipeline, but feels “really good about the prospects.”

Two more wells are planned for this year on the 21,000-acre property in McKean County.

In early 2008, South Jersey Industries paid $2 million for an interest in a partnership that owns the deep-gas rights on the property, Stephen Clark, the company’s treasurer, said in an interview. Since then, the value of mineral rights has skyrocketed.

South Jersey Industries estimates that its combined royalties and ownership rights will net 10.25 percent of the value of the gas produced — the company’s share would be about $300 million, based on an average price of $6 per thousand cubic feet.

“It has the opportunity to be very productive for us,” Clark said.

Graham told analysts that it was premature to estimate earnings, which depend upon the number of wells drilled and the price of natural gas. Production could take years, or even decades, to realize.

The estimates illustrate the huge potential in the Marcellus Shale, which lies under much of Pennsylvania and several surrounding states.

Copyright: Times Leader

Energy resource below Appalachia in four states seen as possible boon.

GENARO C. ARMAS Associated Press Writer
STATE COLLEGE — More than a mile beneath an area of Appalachia covering parts of four states lies a mostly untapped reservoir of natural gas that could swell U.S. reserves.

Geologists and energy companies have known for decades about the gas in the Marcellus Shale, but only recently have figured out a possible – though expensive – way to extract it from the thick black rock about 6,000 feet underground.

Like prospectors mining for gold, energy executives must decide whether the prize is worth the huge investment.

“This is a very real prospect, very real,” said Stephen Rhoads, president of the Pennsylvania Oil and Gas Association. “This could be a very significant year for this.”

The shale holding the best prospects covers an area of 54,000 square miles, from upstate New York, across Pennsylvania into eastern Ohio and across most of West Virginia – a total area bigger than the state of Pennsylvania.

It could contain as much as 50 trillion cubic feet of recoverable natural gas, according to a recent study by researchers at Penn State University and the State University of New York at Fredonia.

The United States produces about 19 trillion cubic feet of gas a year, so the Marcellus field would be a boon if new drilling technology works, Penn State geoscientist Terry Engelder said.

“The value of this science could increment the net worth of U.S. energy resources by a trillion dollars, plus or minus billions,” he said.

The average consumer price for natural gas in the United States is forecast to rise 78 percent between the 2001-2002 and 2007-2008 winter heating seasons, which last from October to March. Prices will go from $7.45 to $13.32 per thousand cubic feet this season, according to the federal Energy Information Administration.

That translates into the average season bill nearly doubling during the same period from $465 to $884.

One of the main players in Pennsylvania, Range Resources Corp., of Fort Worth, Texas, has roughly 4,700 wells statewide – though it’s the results from five new horizontal wells in southwestern Pennsylvania that have company executives especially hopeful.

The company, in a December financial report, estimated that two horizontal wells are producing roughly 4.6 million cubic feet of gas per day. Tests on an additional three recently completed horizontal wells showed potential for a total of 12.7 million cubic feet of gas per day.

“We’re extremely encouraged. We see many viable parts of the Marcellus that will be commercial,” said Range Senior Vice President Rodney Waller.

Yet he cautioned it was still too early to determine how successful the venture could be because of limited data.

The upfront money may give some pause to prospectors. A typical well that drills straight down to a depth of about 2,000 to 3,000 feet costs roughly $800,000.

But in the Marcellus Shale, Range and other companies hope a different kind of drilling might yield better results – one in which a well is dug straight down to depths of about 6,000 feet or more, before making a right angle to drill horizontally into the shale. That kind of well could cost a company $3 million to build, not counting the cost of leasing the land, Engelder said.

So the multimillion-dollar question is whether that technology can consistently release the gas from the layer of rock hundreds of millions of years old.

Scientists had long thought the Marcellus served as a source perhaps for shallower wells dug by conventional drills. Previous attempts to extract gas conventionally from the Marcellus haven’t led to much success.

According to Engelder, a series of seams, or fractures, in the rock could hold the key.

Drilling horizontally into this matrix could help give the gas an outlet to escape, said Engelder, a principal owner in Appalachian Fracturing Systems Inc., a consulting firm to gas companies.

Homeowners are intrigued, too. About 80 people packed into a lecture hall at Penn State Wilkes-Barre for a gas drilling information seminar sponsored by the university’s cooperative extension.

People such as Carl Penedos, who owns 150 acres of Wyoming County, relayed stories of gas company representatives knocking on the doors of neighbors seeking to lease land. A couple of neighbors recently signed leases for $50 per acre per year, while others have been offered $500 per acre, he said.

The homebuilder said he was also concerned about the potential environmental impact of drilling.

Copyright: Times Leader