Unconventional Oil Plays Opportunity vs Risk EnerComs London Oil & Gas Conference 4 June 14, 2012 Sofitel London Danny D. Simmons
1000 BOPD - What a great well 10,000 1,000 BOPD 100 10 12/2009 1/2010 2/2010 3/2010 4/2010 5/2010 6/2010 7/2010 8/2010 9/2010 10/2010 11/2010 12/2010 2
If only it was always so easy . . . 3
Fundamental Goals of Reservoir Engineering How much oil and/or gas are wells going to Prices make, and OGIP Costs OOIP Can my Company make drilling wells Free Gas vs. Recovery per Incr. Vertical vs. Lateral Adsorbed Gas TOC…
General Principles GR RT GR D,N More is Better 60 Quality Net Higher silt content Storage Capacity (In-Place) (Rt and Rhob) Flow Capacity (Permeability) Reservoir Energy (Rec. Factor) Higher organic content (GR)…
Unconventional Oil Description: Oil resources not economical to produce using conventional oil and gas recovery techniques Sources: Heavy Oil…
High-Activity Unconventional Oil Plays Bakken/Three Forks Reservoirs Williston Basin Montana and North Dakota Niobrara Reservoir Denver-Julesburg Basin, Powder River Basin, Laramie Basin, Others Colorado and Wyoming Eagle Ford…
Bakken Shale / Three Forks Reservoirs 8
Bakken/Three Forks Areal Extent 9
Bakken/Three Forks Lithology Source: Elm Coulee Oil Field Richland County, Montana Bakken Oil Well Frac Treatment 10
Bakken/Three Forks Why the Excitement THREE FORKS, BAKKEN, AND SANISH OIL PRODUCTION AND WELL COUNT MONTANA AND NORTH DAKOTA 350,000 3,500 ND Sanish and Three Forks ND Sanish, Three Forks, and Bakken ND and MT Sanish, Three Forks,…
Bakken/Three Forks Fluid Properties Oil Density = 42 API (Sweet) Oil Viscosity = 0.3 CP at Reservoir Conditions Initial Solution GOR = 500 to 800 SCF/BBL Solution GOR at 3 Years = 800 to 1,100SCF/BBL Solution Gas Heating Value = 1,500…
Bakken/Three Forks Example Well 13
Bakken Development Issues Pipeline Capacity Gas Processing Capacity Infrastructure Capacity Workforce Optimal Well Spacing 14
Niobrara Shale 15
Niobrara Producing Basins Powder River Basin DJ Basin Laramie Basin Hanna Basin Sand Wash Basin Piceance Basin North Park Basin San Juan Basin Raton Basin Source: Hart Energy 16
Denver-Julesburg Basin Niobrara Source: Adapted from Sonneburg, 2010 17
Wells That Sparked the Niobrara Horizontal Drilling Play EOG Resources: 2-01H Jake, Weld Co. 3Q 2009; Max rate to sales 1,558 BOPD 3,800-ft lateral, TMD 11,838 ft. Made 50,000 BBLS in 1st 90 days on line Noble Energy: 1-99H…
Horizontal vs. Vertical Performance Source: Adapted from Noble Energy, Inc. 19
Eagle Ford Shale 20
Eagle Ford Shale Play Source: http://www.eia.gov/oil_gas/rpd/shaleusa9.pdf 21
Stratigraphy 22
EOG Eagle Ford Wells Source: EOG Resources, Inc. 23
Eagle Ford Production History Source: http://www.rrc.state.tx.us/eagleford/index.php 24
Eagle Ford Production History Source: http://www.rrc.state.tx.us/eagleford/index.php 25
Eagle Ford Production History Source: http://www.rrc.state.tx.us/eagleford/index.php 26
Unconventional Opportunities Source: SandRidge Investor Presentation February 2012 29
Geologic Model Source: SandRidge Investor Presentation February 2012 30
Mississippian Vertical Type Log Woods County, OK Sandridge W E 1-31, Township 28 N, Range 13 W, Section 31 Induction Density-Neutron Pre-Pennsylvanian Unconformity Spergen D CUM: 34 mbo, 68 mmcfg Warsaw C Mississippian Lime…
SandRidge 2011 Play Definition Source: SandRidge Investor Presentation February 2012 32
Industry Mississippian Horizontal Drilling Activity Source: SandRidge Investor Presentation February 2012 33
Mississippian Production Characteristics Complex fluid distribution Inter-bedded oil, gas, and water Complex drive mechanism High water-cuts and GORs for the life of the wells Horizontal to vertical EUR ratios are not applicable…
Mississippian Example Well 35
Shale Plays Evaluation Considerations Shale plays may require considerable initial capital expenditures to allow commercial access and determine economic feasibility. Geoscience costs tend to be very large early in shale plays:…
Unconventional Oil Reservoirs Keys to Success: Large Volumes of Oil-in-Place Successful Production Technology Development Stable, High Oil Prices Issues: Midstream Capacity Pipelines Gas Processing Water Disposal Service…