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THE Shale Gas Thread Pt 2 (merged)

General discussions of the systemic, societal and civilisational effects of depletion.

NO SOUP FOR YOU…OR SHALE GAS!

Unread postby ROCKMAN » Fri 10 May 2013, 22:43:21

From: http://www.rigzone.com/news/oil_gas/a/1 ... ping_World

Speaking at the OTC in Houston. Just on person’s opinion. But his job does depend on understanding the situation

“Developing countries should not expect to see a North American-style shale gas revolution any time soon, according to ConocoPhillips LNG Marketing Manager Chip Schuppert.”

"…the key ingredients for the shale gas revolution in North America: …the presence of multiple, very large shale gas reservoirs…the marriage of horizontal drilling and multi-stage hydraulic fracturing technologies… existing infrastructure: the pipeline infrastructure with third-party access… a very well developed service industry and a very mobile and skilled workforce.”

"Maybe China will happen before some of the others because if the government there puts its mind to it they can facilitate that. But I think it's going to be hard for a lot of these nations to recreate the North American shale gas revolution in any kind of time frame that's even close to similar."
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Re: NO SOUP FOR YOU…OR SHALE GAS!

Unread postby rockdoc123 » Sat 11 May 2013, 09:29:08

Although the Conoco Phillips guy is right in certain cases he isn't universally correct. As an example Argentina has arguably better shale gas potential than the US. The Vaca Muerta shale is in places a couple of thousand metres thick and is present in the oil or gas window for large areas of the Nequen basin. YPF has recovered very large rates from vertical wells (with this thickness a vertical well is equivalent to a long reach horizontal elsewhere). The infrastructure is all there, very experienced work force, all that is missing is enough frac units which has been hindered by the draconian import regulations. As mentioned China is certainly a place where it could mimic the North American experience. Another place you don't hear much about is Algeria where there are two very thick shale sections in the Devonian and Silurian sequences that have produced large flow rates on fraccing by Sonatrach (the NOC).
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Re: NO SOUP FOR YOU…OR SHALE GAS!

Unread postby pstarr » Sat 11 May 2013, 11:16:50

ROCKMAN, good point. Tight-shale operations requires complex technologies and fancy services for a very special, very "demanding" clientele (wealthy Americans). I think we here in the US have been deceived by our stripper-well culture. Those range/pasture/paddock stripper operations require a 1st-world transport and service infrastructure that doesn't exist everywhere. Fresh water good roads truck terminals pipelines labor services (schools, convenience stores etc.) are endemic in the US, but would need to be built from scratch to support continuous drilling and fracting.

An analogy might be a micro-brewery. Or a boutique winery. The vinifera grape grows across the Mediterranean region, but is turned into premium wines in very few places. I don't ever see this expensive premium liquid flowing out of Algeria. Or anywhere else in the 3rd world.
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Re: NO SOUP FOR YOU…OR SHALE GAS!

Unread postby rockdoc123 » Sat 11 May 2013, 12:22:10

I don't ever see this expensive premium liquid flowing out of Algeria. Or anywhere else in the 3rd world.


It already is. Sonatrach currently produces several vertical wells in the In Salah region of the Ahnet basin which were completed in the Devonian source rock interval. They continue to drill additional wells but aren't under that same pressures the US was when the shale gas boom hit there. They have conventional gas that still is in fairly large quantities. The oil and gas industry in Algeria is very advanced, the technology employed is easily on par with anything in the US.
In Argentina last year YPF drilled a scad of wells that are currently producing. They are hampered somewhat but availability of capital and are trying to secure partners, which is why they have signed a deal with Chevron. The economics for shale oil and gas extraction in Argentina and Algeria are superior to that in the US and once the cost control efforts kicked in under full employment they would look even better.
I think you underestimate what capabilities these countries have. What is missing in these places is scads of frac units which Schlumberger and Halliburton are leary of building and sending simply because they aren't sure they could ever get them back out of the country.
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Re: NO SOUP FOR YOU…OR SHALE GAS!

Unread postby pstarr » Sat 11 May 2013, 13:04:49

rockdoc123 wrote:
I don't ever see this expensive premium liquid flowing out of Algeria. Or anywhere else in the 3rd world.


It already is. Sonatrach currently produces several vertical wells in the In Salah region of the Ahnet basin which were completed in the Devonian source rock interval. They continue to drill additional wells but aren't under that same pressures the US was when the shale gas boom hit there. They have conventional gas that still is in fairly large quantities. The oil and gas industry in Algeria is very advanced, the technology employed is easily on par with anything in the US.
In Argentina last year YPF drilled a scad of wells that are currently producing. They are hampered somewhat but availability of capital and are trying to secure partners, which is why they have signed a deal with Chevron. The economics for shale oil and gas extraction in Argentina and Algeria are superior to that in the US and once the cost control efforts kicked in under full employment they would look even better.
I think you underestimate what capabilities these countries have. What is missing in these places is scads of frac units which Schlumberger and Halliburton are leary of building and sending simply because they aren't sure they could ever get them back out of the country.
Exactly. While Algeria might have source rocks suitable for initial-tertiary EOR production, it doesn't have the (small case, ie money) capital or labor base to do the job. In the broader sense that is because it lacks (large case) Capital infrastructure and the industrial necessities for doing business. Like I said, the money and machines to recreate a stripper culture probably won't ever exist in places like Algeria. I rather doubt even the majors will be able to recreate the good ole' American West.
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Re: NO SOUP FOR YOU…OR SHALE GAS!

Unread postby rockdoc123 » Sat 11 May 2013, 17:43:36

Exactly. While Algeria might have source rocks suitable for initial-tertiary EOR production, it doesn't have the (small case, ie money) capital or labor base to do the job. In the broader sense that is because it lacks (large case) Capital infrastructure and the industrial necessities for doing business. Like I said, the money and machines to recreate a stripper culture probably won't ever exist in places like Algeria. I rather doubt even the majors will be able to recreate the good ole' American West.


They have done a pretty good job of running a very successful oil industry for decades. The Capital infrastructure comes from their partners (ENI is one, Total another) and they have a labor base that is very significant. They have their own drilling company Enafor, Schlumberger and Halliburton are there in a big way. There is really nothing in their way other than access to enough fraccing equipment, which Halliburton claims they are in the process of building.

It is worth pointing out the "stripper" wells have nothing whatsoever to do with shale gas/oil. Stripper wells refer to wells that had produced from conventional reservoirs most of their reserves and have depleted reservoir energy such that only low rates can be achieved. They are only present in very old fields that have been producing for decades.
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Re: NO SOUP FOR YOU…OR SHALE GAS!

Unread postby John_A » Sun 12 May 2013, 10:22:09

rockdoc123 wrote:It is worth pointing out the "stripper" wells have nothing whatsoever to do with shale gas/oil. Stripper wells refer to wells that had produced from conventional reservoirs most of their reserves and have depleted reservoir energy such that only low rates can be achieved. They are only present in very old fields that have been producing for decades.


So Devonian shale wells producing since the 70's in Ohio aren't stripper wells? Even though some make only a barrel a day? Or less?
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Re: NO SOUP FOR YOU…OR SHALE GAS!

Unread postby ROCKMAN » Sun 12 May 2013, 11:47:29

John – Doc has me a bit confused also. I’m guessing he didn’t mean to make that implication. According to Wiki: “In the United States of America a "stripper" gas well is defined by the Interstate Oil and Gas Compact Commission as one that produces 60,000 cubic feet or less of gas per day at its maximum flow rate; the Internal Revenue Service, for tax purposes, uses a threshold of 75,000 cubic feet per day. Oil wells are generally classified as stripper wells when they produce ten barrels per day or less for any twelve-month period.” IOW the nature of the reservoir isn’t a factor.

And that’s pretty much how the oil patch sees it. And every oil well, whether completed in an unconventional or conventional reservoir, will one day become a stripper well. Every oil shale well completed today will become a stripper before the last Ghawar well declines to that status.
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Re: NO SOUP FOR YOU…OR SHALE GAS!

Unread postby John_A » Sun 12 May 2013, 13:05:43

Sounds like you need to get to work straightening out the RockDoc, Rockman! :)
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Re: NO SOUP FOR YOU…OR SHALE GAS!

Unread postby ROCKMAN » Sun 12 May 2013, 13:16:24

John - With his background I doubt I could teach him much and more likely pick could up a few pointers from him. I've worked in a much narrower world then he has. My reponse for more for any newbies out there.
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Re: NO SOUP FOR YOU…OR SHALE GAS!

Unread postby TheAntiDoomer » Sun 12 May 2013, 13:39:24

It's always been clear to me rocdoc Is miles ahead if Rockman. Rockman seems to be motivated by preaching doom and scarcity in hopes he'll get paid more. Honestly though rocdocs predictions are often right and rock mans are often wrong.
"The human ability to innovate out of a jam is profound.That’s why Darwin will always be right, and Malthus will always be wrong.” -K.R. Sridhar


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Re: NO SOUP FOR YOU…OR SHALE GAS!

Unread postby ROCKMAN » Sun 12 May 2013, 13:56:44

Please point out one incorrect prediction I've made. Gonna be tough since I'm not in the habit of making any predictions but just pointing out facts as I understand them. It seems the only forecast I've made lately is my hopefull plans to add a few million bbls of proved producing oil reserves via my horizontal redevelopment program. Not very doomerish IMHO. I've also just forecast an increase in US oil production as long as oil prices stay up. Are you, the anti-doomer, expecting oil production to not continue to increase or do you agree with me?

BTW I get paid for how much oil/NG I produce and not by anything I say...thank goodness. LOL.
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Re: NO SOUP FOR YOU…OR SHALE GAS!

Unread postby John_A » Sun 12 May 2013, 16:02:09

TheAntiDoomer wrote:It's always been clear to me rocdoc Is miles ahead if Rockman. Rockman seems to be motivated by preaching doom and scarcity in hopes he'll get paid more. Honestly though rocdocs predictions are often right and rock mans are often wrong.


I am not familiar with any of Rockman's predictions. He seems to say "price" alot, and beyond that is making a decent living giving the people of the world EXACTLY what they are demanding, regardless of the morality of CO2 emissions or whether or not we should be using such fuels.
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Re: NO SOUP FOR YOU…OR SHALE GAS!

Unread postby pstarr » Sun 12 May 2013, 16:33:50

John_A wrote:
TheAntiDoomer wrote:It's always been clear to me rocdoc Is miles ahead if Rockman. Rockman seems to be motivated by preaching doom and scarcity in hopes he'll get paid more. Honestly though rocdocs predictions are often right and rock mans are often wrong.


I am not familiar with any of Rockman's predictions. He seems to say "price" alot, and beyond that is making a decent living giving the people of the world EXACTLY what they are demanding, regardless of the morality of CO2 emissions or whether or not we should be using such fuels.
That's why rockman is trusted here. He seems to be the rare professional who isn't blinded by his paycheck or obligations, and doesn't have an agenda industry, environmental, optimist, pessimist, right, left. He just does the job he was trained to do and plays the cards he has been handed. Kind of groovy!
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Re: NO SOUP FOR YOU…OR SHALE GAS!

Unread postby ROCKMAN » Sun 12 May 2013, 17:25:47

pstarr - You fool! You've fallen into my carefully prepared trap. LOL. Of course I have an agenda. Everyone has an agenda. My two miniature schnauzers (that my wife loves than me) have an agenda. The Nazis had an agenda regarding the Jews and the retarded. There are good agendas and bad agendas. If someone judges my agenda as something less than good I don’t have a problem with that. Don’t take this wrong but I don’t really care if anyone accepts or rejects anything I say. I don't take the least offense. I post purely for own satisfaction. I try not to go after anyone for their opinions. Theirs is no less valuable than mine…which I don’t rate very highly. But I do like to post facts along with their documentation. Something many posts here and elsewhere often lack. Then folks can create their own opinions.

I am neither an evangelist nor a missionary. Just a geologist that gets off to seeing his words posted in public. The wife and schnauzers don’t pay me much attention…this is all I really have. LOL.
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Re: NO SOUP FOR YOU…OR SHALE GAS!

Unread postby rockdoc123 » Sun 12 May 2013, 18:35:05

And that’s pretty much how the oil patch sees it. And every oil well, whether completed in an unconventional or conventional reservoir, will one day become a stripper well. Every oil shale well completed today will become a stripper before the last Ghawar well declines to that status.

I've been in this business long enough to know that we applied the term "stripper" well to fields that had been produced for a long time where wells were producing tens of barrels a day, but still producing.I invested in a couple of companies back in the nineties that did OK with this and a bunch of companies who had bought old production as prices rose made out like bandits. IT was never intended as a description of shale wells which are hardly "stripper" inasmuch as they produce from virgin pressure through to abandonment. The "stripper" wells when the phrase was coined were largely wells that were actually turned back on....a lot of companies made money on this. None were "stripper" from start of production.
I'm sorry but classifying shale wells as "stripper" is solely for those of you who have almost zero clue about this part of the industry.
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Re: NO SOUP FOR YOU…OR SHALE GAS!

Unread postby rockdoc123 » Sun 12 May 2013, 18:57:38

So Devonian shale wells producing since the 70's in Ohio aren't stripper wells? Even though some make only a barrel a day? Or less?


those wells were drilled for conventional reservoirs and happened on what would be termed unconventional but were not shales but rather a mix of of sedimentary rocks with permeabilities much higher than the unconventional reservoirs of today and they were never completed in the same manner. You could not produce a vertical well unfracted in true modern shale unconventionals at reasonable rates for any length of time, the permeability is too low. They hardly ever produced at a high enough rate to be termed "stripper" back when the term came into play in the industry. You can use whatever encyclopedic defintion you want but it was an oilfield term that had more to do with process than rate.

If you want to define "stripper" as a rate other than what it was originally intended in the patch to mean.....ie.. "I am now (or I could re-start) producing at a very low rate from my original intention but because I have capitalized all of my investment and am now just looking at point forward economics as long as I don't have to do any workovers or any maintenance I can still make some money, but it will be not windfall profits", then have at it. It still doesn't apply to the new unconventional business where the low plateau rates are anticipated before the well is drilled and full cycle economics work out very well. It is completely different.

The term is a very bad one to describe what is going on with unconventional E&P. If you want to debate this point I am more than willing and capable as this was one of my major oversights at the last company I worked with before retirement.

Shale production can't save us from Peak but it will have a serious impact on the length of the plateau and those who aren't willing to understand the technology, it's advantages and limitations (and I mean to say you need to actually have some knowledge in this) and the possibilities for improvements in both technology and cost control are more of a detriment to understanding the impacts of Peak Oil than they are a service.
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Re: NO SOUP FOR YOU…OR SHALE GAS!

Unread postby John_A » Sun 12 May 2013, 20:44:31

rockdoc123 wrote:I'm sorry but classifying shale wells as "stripper" is solely for those of you who have almost zero clue about this part of the industry.


Using Rockman's definition would seem to cover the idea of shale well stripper wells quite well. Rather than telling us how poorly understand the industry, can you please explain how the definition provided can NOT cover shale wells too?
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Re: NO SOUP FOR YOU…OR SHALE GAS!

Unread postby John_A » Sun 12 May 2013, 20:48:06

rockdoc123 wrote:. You could not produce a vertical well unfracted in true modern shale unconventionals at reasonable rates for any length of time, the permeability is too low. They hardly ever produced at a high enough rate to be termed "stripper" back when the term came into play in the industry. You can use whatever encyclopedic defintion you want but it was an oilfield term that had more to do with process than rate.


So if I could provide the permit number of an open hole completion (unstimulated) producing from the Devonian Shale in Ohio, which produced for perhaps 2 or 3 decades and almost always made less than 10 barrels a day, this wouldn't be a stripper well because...."hardly ever" means you are willing to accept that certainly there could be a few around?

Rockdoc123 wrote:The term is a very bad one to describe what is going on with unconventional E&P. If you want to debate this point I am more than willing and capable as this was one of my major oversights at the last company I worked with before retirement.


Perhaps you could get the definition changed, from whatever encyclopedia Rockman retrieved it from?
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Re: NO SOUP FOR YOU…OR SHALE GAS!

Unread postby ROCKMAN » Sun 12 May 2013, 21:45:56

John – “…from whatever encyclopedia Rockman retrieved it from?” An encyclopedia??? Try the Society of Petroleum Engineer, the America Association of Petroleum Geologists, the Texas Rail Road Commission, the Dept of Natural Resources of Louisiana, etc. etc.

As far as old unconventional wells go: “You could not produce a vertical well unfracted in true modern shale unconventionals at reasonable rates for any length of time, the permeability is too low. They hardly ever produced at a high enough rate to be termed "stripper" back when the term came into play in the industry.”

Again, I seem to exist in a different universe than others. According the records of the Texas Rail Road Commission – vertical Eagle Ford Shale completions:

API# 42-499-00628 Jan 1945 to Oct 1982 Placid Oil #2 Taylor = 365k bo
API# 42-499-30284 Jan 1945 to May 1985 Delta Drilling #3 G-B = 332k
API# 42-499-02525 Jan 1945 to Feb 2013 Delta Drilling #4 G-B = 578k bo
API# 42-499-00191 Jan 1949 to May 1992 Petro-Hunt #7 White = 547k bo

And there are many other examples. These wells initially came on at 100 to 200 bopd and produced less than 10 bopd for the last 8 to 14 years of their lives.

Nothing to debate folks. Everyone is free to classify them however they want…it’s a free country. But I and the rest of the oil patch will classify them as damn good unconventional reservoir completions that spent the later part of their lives as stripper wells.
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