The Next Stage of Shale Environmental Developments Dr. William W. Fleckenstein, P.E. (CA 1666) The Oil & Gas Conference® 21 August 18th, 2016 PETROLEUM ENGINEERING

The Burning Questions Before Us • • • • •

Subsurface aquifers Greener chemicals Emissions Induced seismicity Land usage

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Aquifer Protection Aquifer protection: – Cemented surface casing – Cemented prod. casing – Annular hydrostatic head

Simple?

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“Big Data” Aquifer Study • The Wattenberg Field near Denver, CO. • Data from 17,948 oil wells (1970 – 2013). • Wells were classified by construction types. • Possible and catastrophic barrier failures were identified

SPE-175401, SPE-181696 Bonanza Creek

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Well Design Risks

SPE-175401, SPE-181696

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Well Designs in Use

SPE-175401, SPE-181696

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Well Barrier Possible Failures

SPE-175401, SPE-181696

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Greener Chemicals • Reveal and replace bad chemicals – BTEX chemicals

• Chemical toxicity scoring systems • Water-free fracturing fluids – Hydrocarbon – Non-hydrocarbon

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Emissions • • • • • •

Producing wells Production facilities Compressors Vehicles Rigs Alternative energy solutions • Monitoring • Greener Completions PETROLEUM ENGINEERING

Karion, Sweeney, Conley, Newberger, Wolter

Induced Seismicity • Characterization of faults • Real time detection • Operational protocols

• Risk analysis

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Land Usage • • • • •

Ultra Extended Reach Downhole tractors Multi-laterals Pad development MOU development

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CSM Technologies (Patented or Patent Pending) 1. Frac sleeve – single sized ball 2. Downhole casing rotation 3. Annular cemented casing seal test – In place of CBL

More efficient fracs – Dr. Jennifer Miskimins PETROLEUM ENGINEERING

What’s on the Frontier for Hydraulic Fracturing? Dr. Jennifer L. Miskimins, P.E. Petroleum Engineering Department [email protected] 303-384-2607 PETROLEUM ENGINEERING

The positives of downturns?? • “Necessity…the mother of invention.” • First attributed to Plato

• “A long habit of not thinking a thing wrong gives it a superficial appearance of being right.” • Thomas Paine

• Previous downturns have led to advances such as: – – – –

Horizontal drilling Multilateral wells Subsea separation Wellhead instrumentation

• In general, improvements in efficiency… PETROLEUM ENGINEERING

Ongoing investigations, potential projects, issues to address… • • • • • •

Treatment optimization Fiber optics Better reservoir characterization Tracing techniques Reduction in use of fluids Pressure management/artificial lift improvements • Refracturing • FAST Consortium – CSM PETROLEUM ENGINEERING

Treatment Optimization • Issues with current completion efficiencies • Communication between stages (inside/outside casing) • Stages can remain untreated • Some reports indicate ~50% of wellbore producing at any given point in time (it’s a dynamic process; flow turns on/off) • Needs to be addressed to maximize potential PETROLEUM ENGINEERING

Fiber Optics • DTS, DAS, DSS, DCS, DPS… – Temperature, acoustic, strain, chemical, pressure

• When integrated with other data points, can provide information on inefficiencies and ways to improve them

From SPE 179149 (2016) PETROLEUM ENGINEERING

Better Reservoir Characterization • Drive 2 miles in the mountains – do the rocks change? • “Engineered completions” need to have the right data to be engineered correctly • Improved geomechanics/characterization along the horizontal; faster turnarounds

Courtesy FractureID

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Tracing Techniques • Looking for improved understanding of what stages/fracs are producing or where to place wellbores/stages in the first place • DNA sequencing vertically and horizontally • Using flowback tracers to characterize reservoir between wells

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Reduction of Fluid (Water) Requirements • Some areas report bigger = better treatments, however, water supply/disposal is still an issue • Replacement of water… – CO2, N2, liquid components of such – Delivery methods an issue – Focus has waivered with drop in activity

From Alqahtani, 2015 PETROLEUM ENGINEERING

Pressure Management/ Artificial Lift Improvements • Optimized drawdown = optimized treatment • AL needed earlier in life cycle than conventional reservoirs • Needs change rapidly • Liquid loading issues; slug flow concerns

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Refracturing… • Mr. Mike Vincent…

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The Next Stage In Restimulation EnerCom O&G Conference 18 Aug 2016

Fracwell LLC

Mike Vincent [email protected] 303 263 6220 Microseismic image: SPE 119636

What Can I Cover in 10 Minutes? • State of the Industry – Refracs performed to date – Common failures in refrac campaigns

• Uncaptured/Future Refrac Opportunities – Five opportunities to consider

• Summary • Roundtable & Questions

History 1953 - Refrac

Sallee&Rugg,1953

1955 – Refrac and Tri-Frac Initial Frac

ReFrac

TriFrac Adapted from Garland, 1957

Common Refrac Campaign Failures • • •

Failure to identify specific mechanisms before designing refrac Poor candidate selection strategies Failure to honor the learnings of our predecessors –

•

Failure to continue optimizing – –

•

We’ve pumped more than 250,000 refracs during the past 60 years! Commonly the first refrac attempt is “copied” from a perceived leader After finding an approach that meets our economic hurdles, we commonly go into “implementation mode”

Failure to design refrac campaigns to learn something profound AND incorporate those learnings into the design of future wells (including frac design, stage spacing, and well spacing)

Opportunity 1 - Profit • Industry already recognizes: – Lower capital investment

– Minimal environmental footprint – Ability to keep personnel profitably employed during downturn while few new wells drilled

• When refracs work they are among the most profitable investments in the industry. – Must be properly designed and implemented – …in the correct candidate wells

Opportunity 2 – Resolve “non-unique” Interpretations 1250

• • • •

Oil Rate

1000

750

Is the decline due to: Poor reservoir quality? Limited drainage area? Insufficient frac length? Degrading frac conductivity?

500

250

0

0

5

10

15

Months

20

25

30

Opportunity 2 – Resolve “non-unique” Interpretations 1250

Can we now agree the initial frac did not capture the reservoir potential?

Oil Rate

1000

750

500

250

0 0

5

10

15

Months

20

25

30

Refracs Exceeding Initial Productivity? Dozens of examples; all rock types ..

2500

Phase I refrac (20/40 Sand) Phase III refrac (16/20 LWC)

3000 2500 2000

First Refrac Incremental Oil Exceeds 1,000,000 barrels

1500 1000 500

Incremental Oil exceeds 650,000 barrels

Initial Frac

100

Refrac

80 60 40 20 0 Well A

Well B

Well C

Well D

2000

1500

1000

500

Well E

0

Second Refrac

Pre Frac

0 May-84 May-86 May-88 May-90 May-92 May-94 May-96 May-98 May-00

Date

Dedurin, 2008, Volga-Urals oil

10,000 gal 3% acid + 10,000 lb glass beads

80,000 gal + 100,000 lb 20/40 sand

Ennis, 1989 – sequential refracs, tight gas

Pospisil, 1992 – 6 years later, 20 mD oil 3500

500

Gas Water

Gas Rate, MCFD

3000

2500

2000

May 1999 Frac:

450

300,000 lb 20/40 LWC

Initial Frac in 1989:

May 1995 Frac:

48,000 lb 40/70 sand + 466,000 lb 12/20 sand

5,000 lb 100 mesh + 24,000 lb 20/40 Sand

400 350 300 250

1500

200 150

1000

100 500 50 0 Jan-90

Shaefer, 2006 – 17 years later, tight gas 8

75,000 gal + 120,000 lb 20/40 ISP

0 Jan-91

Jan-92

Jan-93

Jan-94

Jan-95

Jan-96

Jan-97

Jan-98

Jan-99

Jan-00

Vincent, 2002 – 9 years later, CBM

Jan-01

Water Rate, BWPD

3500

Stabilized Rate (MSCFD)

120

Original Fracture (20/40 Sand)

Production Rate (tonnes/day)

Production from Fracture (bfpd)

4000

Opportunity 3 – Diagnostic Value 1250

Suppose we wanted to know whether the “damage” or opportunity to improve production was near wellbore or far-field.

Oil Rate

1000

Could we pump a ‘tiny’ refrac containing less than 5% the mass of the initial frac?

750

500

250

0 0

5

10

15

Months

20

25

30

Opportunity 3 – Diagnostic Value Can we now agree the ‘tiny’ refrac identified a nearwellbore issue?

1250

Oil Rate

1000

750

500

250

0 0

5

10

15

Months

20

25

30

Opportunity 4 – Study Learnings of Predecessors •

Fields where I can share refrac results: Oil Wells – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – – –

•

LA Basin, CA Clinton Sand, Ohio Olmos Formation, Texas Undisclosed, 3500 ft S. Texas Norge Marchand Unit, OK Devonian, Crane Cty, TX Westbrook Field, W. TX Pembina Cardium, Alberta Rangely Field, Colorado Kuparuk River Field, Alaska Foothills Cardium, Alberta Colombia China Hassi Messaoud, Algeria Chester, Kansas Vyngayakhinskoe Field, Siberia Kalimantan, Indonesia Bakken & Three Forks MT + ND + SK Vert & HZ Volga/Urals – W. Siberia Arkansas undisclosed XTO field England – Sandstone Waddell Ranch-Mature Carbonate in Permian Midland Farms, Andrews TX (unpublished) Strawn Eagle Ford HZ • Niobrara Vert & HZ The damage Viking Vert & HZ mechanisms and Montney HZ Spraberry Vert & HZ ideal refrac designs Wolfcamp Vert & HZ vary! Cardium Mississippi Lime HZ

Gas Wells – – – – – – – – – – – – – – – – – – – – – – –

Vicksburg, S. Texas Canyon Sand, Texas Escondido Sandstone, Texas J Sand, Wattenberg, CO Undisclosed 7500 ft depth “low pressured field”, Texas Oak Hill, Cotton Valley E TX Morrow, Red Fork, Atoka, OK Smackover, Mississippi Mesaverde Group, CO & NM Eastern Gas Shales, MI Mendota, Granite Wash, TX Cotton Valley, LA Almond/Wamsutter, WY Hugoton, KS Green River Frontier, WY Piceance Basin, CO Viking, Ferrier, Alberta Barnett Shale, TX Codell, DJ Basin, CO Medicine Hat, Milk River, Alberta S. Texas undisclosed field Haynesville Eagle Ford Gas Window

CBM – – – – –

Warrior, Rock Creek, AL Helper Field, UT San Juan Basin, CO & NM Oakwood Field, VA Mannville, AB

Opportunity 5 – Alter Field Development Strategies

Could we recover the reserves with fewer wellbores using improved frac or refrac designs?

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ARC Montney, Continental Bakken, Whiting Niobrara , RSP Wolfberry

Do we really need so many stages if fractures were designed to be more durable or rejuvenated via refrac?

Sources: SPE 134595, Vincent Frac Schools, Cimarex Enercom Aug 19, 2014, EQT, CONSOL, Noble, Cabot, Whiting…

Summary – The Future of Refracs • Despite a long history, our refracs are not optimized – Few carefully structured refrac pilots – Little data sharing and collaboration – Failure to learn from predecessors

• Enormous Opportunities – High NPV, with lower capital investment – Unambiguous, irrefutable learnings – Please incorporate learnings into development plans on future wells

Discussion & Questions • Dr. Will Fleckenstein – –

Environmental Issues Aquifers, Chemicals, Emissions, Seismicity, Land

• Dr. Jennifer Miskimins – –

Frac Optimization, Diagnostics Reservoir Characterization, Artificial Lift, Fluids

• Mike Vincent – –

Refrac Opportunities Applying Learnings to New Wells