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Shale Analytics — Data-Driven Analytics in Unconventional Resources

Duane Nichols — Thu, 21 Dec 2017 09:05:27 +0000

Data-driven Analytics in Unconventional Reservoirs

Book Title: Shale Analytics, ca. $ 119.00

Subtitle: Data-Driven Analytics in Unconventional Resources

Author: Shahab D. Mohaghegh

#- Describes the use of artificial neural networks and fuzzy sets in petroleum engineering

# – Explains data mining in petroleum engineering

# – Demonstrates the only data driven reservoir modeling and production engineering technique for unconventional resources – especially shale

# – Examines tools for analysis, predictive modeling, and optimization of production from shale in the absence of well-understood and well-defined physics of fluid flow in shale

>>>>>>>>>> OVERVIEW

This book describes the application of modern information technology to reservoir modeling and well management in shale. While covering Shale Analytics, it focuses on reservoir modeling and production management of shale plays, since conventional reservoir and production modeling techniques do not perform well in this environment. Topics covered include tools for analysis, predictive modeling and optimization of production from shale in the presence of massive multi-cluster, multi-stage hydraulic fractures.

Given the fact that the physics of storage and fluid flow in shale are not well-understood and well-defined, Shale Analytics avoids making simplifying assumptions and concentrates on facts (Hard Data – Field Measurements) to reach conclusions.

Also discussed are important insights into understanding completion practices and re-frac candidate selection and design. The flexibility and power of the technique is demonstrated in numerous real-world situations.

>>>>>>>>>> BIOGRAPHY

Shahab D. Mohaghegh is the president and CEO of Intelligent Solutions, Inc. (ISI) and Professor of Petroleum and Natural Gas Engineering at West Virginia University. A pioneer in the application of Artificial Intelligence and Data Mining in the Exploration and Production industry, he holds B.S., MS, and PhD degrees in petroleum and natural gas engineering. He has authored more than 180 technical papers and carried out more than 50 projects with major international companies.

He is a SPE Distinguished Lecturer and has been featured in the Distinguished Author Series of SPE’s Journal of Petroleum Technology (JPT) four times. He has been honored by the U.S. Secretary of Energy for his technical contribution in the aftermath of the Deepwater Horizon (Macondo) incident in the Gulf of Mexico and has served as a member of U.S. Secretary of Energy’s Technical Advisory Committee on Unconventional Resources.

Rapid Shale Gas Well Decline Curves Spell Concerns for Frackers

S. Tom Bond — Wed, 28 May 2014 13:48:07 +0000

Shakeout Threatens Shale Patch as Frackers Go for Broke

From an Article by A. Loder, Bloomberg News, May 27, 2014

Drillers must keep borrowing to pay for the exploration needed to offset the steep decline in the production from fracked shale gas wells.

The U.S. shale patch is facing a shakeout as drillers struggle to keep pace with the relentless spending needed to get oil and gas out of the ground.

Shale debt has almost doubled over the last four years while revenue has gained just 5.6 percent, according to a Bloomberg News analysis of 61 shale drillers. A dozen of those wildcatters are spending at least 10 percent of their sales on interest compared with Exxon Mobil Corp.’s 0.1 percent.

“The list of companies that are financially stressed is considerable,” said Benjamin Dell, managing partner of Kimmeridge Energy, a New York-based alternative asset manager focused on energy. “Not everyone is going to survive. We’ve seen it before.”

Some investors are already bailing out. On May 23, Loews Corp., the holding company run by New York’s Tisch family, said it is weighing the sale of HighMount Exploration & Production LLC, its oil and natural gas subsidiary, at a loss.

HighMount lost $20 million in the first three months of the year, after being unprofitable in 2013 and 2012, Loews said it its financial reports. As with much of the industry, HighMount has shifted its focus to oil after natural gas prices plunged and has struggled to find sites worth developing, company records show.

In a measure of the shale industry’s financial burden, debt hit $163.6 billion in the first quarter, according to company records compiled by Bloomberg on 61 exploration and production companies that target oil and natural gas trapped in deep underground layers of rock. And companies including Forest Oil Corp., Goodrich Petroleum Corp. and Quicksilver Resources Inc. racked up interest expense of more than 20 percent.

Production Declines

Quicksilver acknowledges the company is over-leveraged, said David Erdman, a spokesman for Quicksilver. The company’s interest expense equaled almost 45 percent of revenue in the first quarter. “We have taken concrete measures to reduce debt,” he said.

Drillers are caught in a bind. They must keep borrowing to pay for exploration needed to offset the steep production declines typical of shale wells. At the same time, investors have been pushing companies to cut back. Spending tumbled at 26 of the 61 firms examined. For companies that can’t afford to keep drilling, less oil coming out means less money coming in, accelerating the financial tailspin.

Interest Expenses

“Interest expenses are rising,” said Virendra Chauhan, an oil analyst with Energy Aspects in London. “The risk for shale producers is that because of the production decline rates, you constantly have elevated capital expenditures.”

Chauhan wrote a report last year titled “The Other Tale of Shale” that showed interest expenses are gobbling up a growing share of revenue at 35 companies he studied. Interest expense for the 61 companies examined by Bloomberg totalled almost $2 billion in the first quarter, 4.1 percent of revenue, up from 2.3 percent four years ago.

The drilling spree boosted >U.S. oil production to 8.4 million barrels a day, 16 percent more than a year ago and the highest since 1986. Growth has been driven by advances in horizontal drilling and hydraulic fracturing, or fracking, which unlocked crude and natural gas trapped in formations like the Bakken shale or the Marcellus shale in the U.S. northeast.

Costly Gains

The gains haven’t come cheaply. Goodrich said earlier this month that it’s trying to whittle its well costs in the Tuscaloosa Marine Shale down to $11.5 million apiece. The $1.1 billion company, based in Houston, spent almost $52 million more than it earned in the first quarter.

The company has enough money to cover its 2014 capital needs and is working with its board to fund 2015 as it ramps up drilling. A successful well announced last month has propelled Goodrich shares to $25.34, more than double the 2014 low of $12.28.

While borrowing to spend is typical of start-up companies, it’s not always sustainable. Forest Oil, where interest expense totaled 27 percent of revenue in the first quarter, in February reported disappointing well results, and warned that it might run afoul of its debt agreements. Forest on May 6 announced a plan to sell itself to Sabine Oil & Gas LLC in an all-stock transaction. The company declined comment. Shares have declined 39 percent so far this year.

Antero Expanding Marcellus Drilling into Utica Shale in Ohio

Duane Nichols — Mon, 11 Mar 2013 22:56:35 +0000

Antero Domain in WV & PA

Antero Planning for Drilling in Belmont County, Ohio

From article by Casey Junkins, Wheeling Intelligencer, March 11, 2013

Belmont County, OH – Many individual mineral owners are joining the village of Barnsville drilling agreement with Denver-based Antero Resources at a rate of $5,700 per acre and 20 percent of production royalties. Antero held a series of lease signing meetings throughout Barnesville in February and early March, during which Mayor Ron Bischof said the driller received a very positive response from most residents. The agreement the private mineral owners signed is the same one village leaders inked with Antero last year.

Barnsville is about 5 miles south of I-70 (US 40) and 30 miles west of Wheeling, WV.

Belmont County records show Antero already has more than 800 separate lease agreements there with intention to drill. The driller also has active operations in Noble and Monroe counties, reaching a depth of 8,132 feet at one Monroe County well, according to Ohio Department of Natural Resources records. This year, Antero plans to operate an average of 12 drilling rigs in the Marcellus and 2 rigs in the Utica. These 14 rigs will be supplemented by four shallow rigs that will drill the vertical section of some horizontal wells down to the point at which the wells will turn horizontally, about 6,000 feet under the ground.

>>>>>> ………. <<<<<<

Marcellus Shale Activities of Antero in Western PA and Northwestern WV

Antero has 301,000 net acres of leasehold located in northern West Virginia and southwestern Pennsylvania, all in the southwestern core of the Marcellus Shale Play. See the Antero web-site here. [Example drilling lease parameters in this region are $1500 per acre and 15% royalty for a 5 year lease.].

Antero currently has 458 MMcf per day of gross operated production or 364 MMcfe per day net in the Marcellus Shale. The net daily production figure includes approximately 1,400 Bbls per day of NGLs and oil.
Antero has drilled and completed 135 horizontal Marcellus Shale wells, 130 of which are online, and is in the process of drilling and completing 28 additional horizontal wells.
Five recently completed wells in the rich gas area are shut-in, waiting on pipeline (expected March and June 2013).
Operating 13 drilling rigs in West Virginia.
Antero sold its gathering facilities in an area of dedication in Harrison County and southeastern Doddrige County, WV to Crestwood Midstream Partners in March 2012.
Antero is constructing its own gathering facilities in the remainder of Doddridge County and in Ritchie County, WV to conGnect its wells to compression facilities and processing.
Antero is currently processing approximately 130 MMcfd of rich gas production from the Marcellus Shale through MarkWest’s 200 MMcf per day Sherwood I Plant, which is fully operational.
Markwest is constructing a second 200 MMcf per day plant, Sherwood II, which is also fully dedicated to Antero and is expected to go in-service in the second quarter of 2013.

See also the color graphics and maps in this 38 page ANTERO REPORT dated March 2013.

Draft General Stormwater Permit Offerred by WV-DEP for Oil & Gas Industry

Duane Nichols — Sun, 11 Mar 2012 10:34:48 +0000

: WV-DEP Building

Public comment is invited until April 9^th on a proposed general stormwater permit for oil and gas activities associated with exploration, production, processing or treatment operations or transmission facilities that disturb one acre of land area or more. While this does not apply to drilling pads, it does cover pipelines where substantial acreage can be involved, as recently reported.

This draft permit is based on the state’s existing construction stormwater permit but without any reference to the federal law that authorizes that, according to Scott Mandirola, Director of the DEP Division of Water and Waste Management. The authority for this is the state’s Water Pollution Control Act.

A public hearing is set for 6 p.m. on April 9, 2012, at the DEP’s Coopers Rock Training Room in its Charleston offices. Oral and written comments will be taken at that time.

Comments may be mailed to the Department of Environmental Protection, Attention: Tonya Ombler, 601 57th Street, SE, Charleston, WV 25304, or e-mailed to Tonya.K.Ombler@wv.gov. Correspondence should include the name, address and telephone number of the writer and a concise statement of the nature of the issues being raised.

Pennsylvania Marcellus Gas Production Increases in 2011

Duane Nichols — Sun, 19 Feb 2012 02:43:01 +0000

Marcellus shale gas wells in Pennsylvania continued to see significant production increases in 2011. During the last half of 2011, the output was up over 40% from the same reporting period in 2010. New data come from the PA Department of Environmental Protection, showing over 2,200 producing wells, which is an increase of more than 500 since the first half of 2011.

Drilling companies reported producing 67 billion cubic feet of natural gas in Washington County during the six months, up from 45.9 billion cubic feet during the previous half year. Greene County wells produced 67.8 billion cubic feet during the reporting period, up from 51.1 billion cubic feet. Washington County gained 75 producing wells, reaching 353 total. Greene County gained 49 producing wells for a total of 283.

Gas production in southwestern Pennsylvania more than doubled during the last six months of 2011, compared with the same period in 2010. It went from about 82 billion cubic feet to 171 bcf. Statewide production followed the same pattern. It increased to 607 bcf from 256 bcf during the second half of 2010.

Condensate production also saw a substantial, 52 percent increase ending at 487,438 barrels. McAdoo Unit 2H well of Range Resources produced the most condensate at 30,702 barrels during its 155 days of production.

Of the southwestern Pennsylvania wells that were producing gas for the entire six months, the top five were all in Greene County . The most productive was EQT’s Cooper 590387-A well in Morris Township which yielded almost 1.9 bcf of gas during the last six months of last year for an average of 10,085 mcf per day. In southwestern Pennsylvania, the best daily production from wells three months old and older came from Range Resources’ Phelan Unit 4H, which produced about 14,992 mcf of gas per day.

SEC Subpoenas Shale Gas Producers

Nicole Good — Tue, 09 Aug 2011 03:33:34 +0000

Many an eyebrow was raised in June, when Ian Urbina’s article in the New York Times called into question the economics behind the profitability of shale gas plays. He went so far as to quote an analyst who called them “Ponzi schemes.” The article was one of his series on Marcellus Shale gas, covered in previous posts, but this time Urbina’s journalism sparked a fair amount of backlash.

The United States government, however, is taking Urbina seriously. So seriously, in fact, that the Securities and Exchange Commission has subpoenaed some shale gas producers. The SEC’s investigation will compare actual well production versus predictions, to determine if gas reserves are being estimated correctly– or if they are being grossly and illegally overstated.