Schlumberger-Shale Gas Production Decline Trend Comparison

SPE 135555: Shale Gas
Production Decline Trend
Comparison over Time and
Basins
Jason Baihly, Raphael Altman, Raj
Malpani & Fang Luo, Schlumberger
Overview
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
Objectives
Motivation
Formations Analyzed
Methodology
Horizontal Shale Basin Results
Vertical to Horizontal Well Comparison
Sandstone and Shale Horizontal Well Comparison
Economic Analysis
Conclusions
Objectives
 Examine production trends in horizontal shale gas wells




over time in a given basin
Compare the production profiles between shale basins
Compare historical production of vertical and horizontal
Barnett Shale wells
Compare the production profiles of horizontal tight gas
sandstone and shale formations
Perform a basic economic analysis of the
average shale basin horizontal well
Motivation
 Disagreement within the industry in shale plays over
– Long term viability




Decline trends
Time to abandonment rate
EUR
Resultant economics
Formations Selected for Analysis
Niobrara
& Baxter
Excello/Mulky
Gammon
Bakken
New Albany
Antrim
Green
River
Cane
Creek
Marcellus
& Huron
Monterey
McClure
Lewis &
Mancos
Floyd &
Conasagua
Thirteen
Finger
Barnett &
Woodford
Barnett
Eagleford
Woodford
Caney &
Woodford
Bossier &
Haynesville
Fayetteville
Methodology for Production Analysis
 Core area was chosen in each shale basin based
upon
– Limit the number of wells for analysis
 Perform proper QA/QC on a well by well basis
– Wells not on the periphery of the play
– Horizontal wells drilled since the inception of the basin
– Better producing area in the play
 Eagle Ford gas area was analyzed and due to low
well count, the entire play was analyzed
 Hundreds of horizontal wells chosen in each play
 Each play was analyzed individually
Methodology for Production Analysis
 Monthly production broken down into daily rates
 All wells not exhibiting a normal decline trend were




excluded
Wells were grouped by date of first production
Data sets with less than eight wells were ignored
Wells falling an order of magnitude or more outside of the
trend were scrutinized further
Data normalization
– Shift all well production data to a specific ‘time zero’
 Once the well count fell drastically, the analysis was
stopped
Data Quality Control
BARNETT DOFP
2007
Number of
Producing
Wells
Gas
Production
Rate (MSCF/D)
Sudden drop in
well count
representing
wells that started
production in
latter stages of
2007
Number of Wells Analyzed
Case
Barnett
Fayetteville
Woodford
Haynesville
Eagle Ford
Total Wells
#
731
467
305
275
59
Forecast Method
 Decline curve analysis (DCA)
– Determine Arps’ b exponent from regression of
historical production data for each group
 Forecast analysis
– Formulate a production type curve for each shale
gas basin from DCA
Barnett Shale
Maximum Time Decline Trend
Barnett Shale
2500
DOFP_2003 (25 Wells)
Gas Production Rate (MSCF/D)
DOFP_2004 (68 Wells)
DOFP_2005 (129 Wells)
2000
DOFP_2006 (107 Wells)
DOFP_2007 (168 Wells)
1500
DOFP_2008 (218 Wells)
DOFP_2009 (123 Wells)
1000
500
0
0
12
24
36
48
TimeN (months)
60
72
84
Barnett Shale Summary
2500
 IP’s and decline trends
2000
are similar over time
1500
– Open natural fractures
– Low stress anisotropy
– Pipeline capacity maxed
out
DOFP_2003 (25 Wells)
DOFP_2004 (68 Wells)
DOFP_2005 (129 Wells)
DOFP_2006 (107 Wells)
DOFP_2007 (168 Wells)
DOFP_2008 (218 Wells)
DOFP_2009 (123 Wells)
1000
500
0
0
12
24
36
48
60
 Wells are not interfering with one another
– Some wells have frac’d into one another
 Increasing from two to six frac stages over time
 Proppant per stage decreasing as number of stages

increased
One study found that proppant amount
correlated well to production results
72
84
Fayetteville Shale
Maximum Time Decline Trend
Fayetteville Shale
Gas Production Rate (MSCF/D)
3000
DOFP_2005 (8 Wells)
DOFP_2006 (53 Wells)
2500
DOFP_2007 (118 Wells)
DOFP_2008 (173 Wells)
2000
DOFP_2009 (115 Wells)
1500
1000
500
0
0
12
24
36
TimeN (months)
48
60
Fayetteville Shale Summary
3000
 IP’s and production
increase over time
2500
2000
DOFP_2005 (8 Wells)
DOFP_2006 (53 Wells)
DOFP_2007 (118 Wells)
DOFP_2008 (173 Wells)
DOFP_2009 (115 Wells)
1500
– Lateral length increased 1000
–
–
–
from 1,800 to 4,300 ft
500
Frac stages per lateral
0
0
12
24
went from 3-4 to 6-8
Fluid volume per lateral has doubled
Proppant amount per lateral has tripled
have
36
48
 Production decline trends are fairly parallel over time
 Increase in production appears to be sustained
60
Woodford Shale
Maximum Time Decline Trend
Woodford Shale
Gas Production Rate (MSCF/D)
4000
DOFP_2006 (32 Wells)
3500
DOFP_2007 (90 Wells)
3000
DOFP_2008 (127 Wells)
2500
DOFP_2009 (56 Wells)
2000
1500
1000
500
0
0
12
24
TimeN (months)
36
48
Woodford Shale Summary
4000
DOFP_2006 (32 Wells)
3500
 IP’s and production
increase over time
– Lateral length increased
–
–
–
DOFP_2007 (90 Wells)
3000
DOFP_2008 (127 Wells)
2500
DOFP_2009 (56 Wells)
2000
1500
from
1,800 to 4,800 ft
1000
500
Frac stages per lateral
0
went from 3 to 10
0
12
24
Fluid volume has increased, but not proportionately
Proppant amount per lateral has remained constant
 Production decline trends are somewhat parallel


over time
Increase in production may be sustained, more
production is needed
Decline profile similar to the Fayetteville
36
48
Haynesville Shale Maximum Time
Decline Trend
Haynesville Shale
Gas Production Rate (MSCF/D)
10000
9000
DOFP_2008 (37 Wells)
8000
DOFP_2009 (238 Wells)
7000
6000
5000
4000
3000
2000
1000
0
0
12
24
TimeN (months)
36
Haynesville Shale Summary
10000
9000
 IP’s have increased by
8000
7000
18% year on year
6000
– Completion trends have
4000
–
–
–
–
–
DOFP_2008 (37 Wells)
DOFP_2009 (238 Wells)
5000
3000
rapidly evolved
2000
Lateral length increased 1000
from
0
2,200 to 4,800 ft
0
12
24
Frac stages per lateral increased from 6 to 14
Stimulation volumes have increased proportionately to
the number of stages
Fluid volume per stage ~12,000 bbl
Proppant amount per stage ~300,000 lbs
 Production decline trends are fairly parallel
over a short timeframe
36
Eagle Ford Shale Decline Trend
Eagle Ford Shale
Gas Production Rate (MSCF/D)
5000
4500
DOFP_2009 (46 Wells)
4000
3500
3000
2500
2000
1500
1000
500
0
0
1
2
3
4
5
6
7
TimeN (months)
8
9
10
11
12
Eagle Ford Shale Summary
5000
4500
 IP is second highest
DOFP_2009 (46 Wells)
4000
3500
over shale plays analyzed 3000
2500
– Lateral length is ~5,000 ft 2000
– Frac stages per lateral 1500
1000
–
are 12 to 14
500
0
Frac designs are
0
1
2
3
comparable to the Haynesville Shale
4
5
6
7
8
 More time needed to perform additional analysis
9
10
11 12
2009 DOFP Inter Shale Basin Comparison
DOFP 2009 Inter - Shale Basin
Comparison
Gas Production Rate (MSCF/D)
10000
Barnett (123 Wells)
9000
Eagle Ford (59 Wells)
8000
Fayetteville (115 Wells)
7000
Haynesville (238 Wells)
6000
Woodford (56 Wells)
5000
4000
3000
2000
1000
0
0
2
4
6
8
10
TimeN (months)
12
14
16
Absolute Gas Production Rate for Barnett
Horizontal and Vertical Wells
2500
Barnett Horizontal
Barnett Horizontal (Forecast)
Barnett Vertical
Barnett Vertical (Forecast)
Production Rate, MScf/day
2000
1500
1000
500
0
0
60
120
180
Time, Months
240
300
360
IP-Normalized Gas Production Rate for
Barnett Shale Horizontal and Vertical Wells
Normalized Production Rate
1
Barnett Horizontal
Barnett Horizontal (Forecast)
Barnett Vertical
Barnett Vertical (Forecast)
0.8
0.6
0.4
0.2
0
0
60
120
180
Time, Months
240
300
360
Overlay of IP-Normalized Production Type
Curves for Horizontal and Vertical Sandstones
1
Cotton Valley Horizontal
Cotton Valley (Forecast)
Cleveland Horizontal
Cleveland (Forecast)
Cotton Valley Vertical
Cleveland Vertical
Normalized Production Rate
0.8
0.6
0.4
0.2
0
0
12
24
36
Time, Months
48
60
Overlay of IP-Normalized Production Type
Curves for Horizontal Sandstone and Shale Plays
1
Barnett
Fayetteville
Fayetteville (Forecast)
Woodford
Woodford (Forecast)
Haynesville
Haynesville (Forecast)
Eagle Ford
Eagle Ford (Forecast)
Cotton Valley Horizontal
Cotton Valley (Forecast)
Cleveland Horizontal
Cleveland (Forecast)
Normalized Production Rate
0.8
0.6
0.4
0.2
0
0
12
24
36
Time, Months
48
60
Overlay of Absolute Production Type Curves for
Horizontal Sandstone and Shale Plays
Production Rate, MScf/day
5000
Barnett Horizontal
Barnett (Forecast)
Fayetteville
Fayetteville (Forecast)
Woodford
Woodford (Forecast)
Haynesville
Haynesville (Forecast)
Eagle Ford
Eagle Ford (Forecast)
Cotton Valley Horizontal
Cotton Valley (Forecast)
Cleveland Horizontal
4000
3000
2000
1000
0
0
12
24
36
Time, Months
48
60
Comparison of DCA for Various Plays
Case
Barnett
Fayetteville
Woodford
Haynesville
Eagle Ford
Cotton Valley
Cleveland
Cotton Valley (1980)
Cleveland (1980s)
Cotton Valley (>2005)
Barnett (1980s)
Reservoir Type
Well Type
Shale Gas
Horizontal
Tight Gas
Sandstone
Vertical
Shale Gas
b
1.5933
0.6377
0.8436
1.1852
1.6940
0.7259
1.0000
1.2778
2.3483
1.0000
1.9366
Current Cumulative
Gas Production
MMScf
1,415
883
996
1,740
548
1,341
478
2,703
476
469
389
Economic Inputs
Play
Barnett
Fayetteville
Woodford
Haynesville
Eagle Ford
Well Cost Royalty Operating Cost
$ MM
%
$/MScf
3
2.8
6.7
8
5.8
22
17
19
25
25
0.7
1.1
1.2
2.5
1.5
Economic and Production Results
Case
Barnett_DOFP_2008
Barnett_DOFP_2009
Fayetteville_DOFP_2008
Fayetteville_DOFP_2009
Woodford_DOFP_2008
Woodford_DOFP_2009
Haynesville_DOFP_2008
Haynesville_DOFP_2009
Eagle Ford_DOFP_2009
Cotton Valley_Horizontal
Before Tax @ $4/MScf
DPI @ 0% DPI @ 10% DPI @ 15% ROR, %
2.11
1.11
0.92
12.6
2.09
1.1
0.92
12.3
1.95
1.15
0.99
14.7
2.69
1.43
1.19
22.1
0.71
0.42
0.37
0
0.94
0.53
0.45
0
0.29
0.19
0.16
0
0.38
0.24
0.21
0
0.83
0.45
0.38
0
0.92
0.69
0.64
0
EUR, Bcf
2.895
2.867
2.463
3.401
2.544
3.389
4.579
6.092
3.793
2.036
Economic Break Even Price
Case
Barnett_DOFP_2008
Barnett_DOFP_2009
Fayetteville_DOFP_2008
Fayetteville_DOFP_2009
Woodford_DOFP_2008
Woodford_DOFP_2009
Haynesville_DOFP_2008
Haynesville_DOFP_2009
Eagle Ford_DOFP_2009
EUR, Bcf Gas Price (DPI @ 10% =1)
(USD)
2.895
2.867
2.463
3.401
2.544
3.389
4.579
6.092
3.793
$3.70
$3.74
$3.65
$3.20
$7.35
$6.22
$6.95
$6.10
$6.24
Conclusions
 Haynesville IP > Eagle Ford IP > Woodford IP >
Fayetteville IP > Barnett IP
– Haynesville Shale IP is considerably higher than other
Shales due to

 Higher reservoir pressure
 Aggressive drilling and completion approach
Production increased with time across all shale gas
basins analyzed
– Barnett Shale is the exception
– Due to improvements in drilling, completion practices,
stimulation designs, and knowledge gain over time
 Cotton Valley Sand has the steepest decline
over time of all formations analyzed
Conclusions
 Barnett Shale had a flatter production decline trend
– Barnett would not serve as an analog shale play for
estimating production declines in other shale gas plays
– Could be due to natural fractures, curvature, and stress
– Vertical and horizontal wells exhibit similar decline profiles
during first 2 years of production
 ‘b’ exponents greater than 1.0 are realistic in

unconventional gas reservoirs
Economics in our study areas
– Barnett and Fayetteville are economical @ $4/MScf gas
price at 10% discount rate
– Haynesville, Eagle Ford, and Woodford are
economical @ >$6/MScf at 10% discount rate
SPE 135555: Shale Gas
Production Decline Trend
Comparison over Time and
Basins
Jason Baihly, Raphael Altman, Raj
Malpani & Fang Luo, Schlumberger