Barnett Shale

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Barnett Shale
Region: Bend Arch-Fort Worth Basin,Texas
Country: United States
Offshore/Onshore: Onshore
Operators: Devon, Chesapeake, EOG, XTO, Range Resources, EnCana, ConocoPhillips, Quicksilver, Chief Oil & Gas, Denbury
Image:Map of USA TX.svg
Field History
Discovery: 1980s
Start of production: 1999
Production
Current Production Gas (Mcfd): 2×109 cu ft/d (57,000,000 m³/d)
Estimated GIIP (Bcf): 2.1×1012 cu ft (59 km³) – 30×1012 cu ft (850 km³)
Producing Formations: Barnett Shale

The Barnett Shale is a geological formation of economic significance. It consists of sedimentary rocks of Mississippian age (354-323 million years ago) in the U.S. State of Texas. The formation is estimated to stretch from the city of Dallas to west of the city of Fort Worth and south, covering 5,000 square miles (13,000 km²) and at least 17 counties.

Some experts have suggested the Barnett Shale may be the largest onshore natural gas field in the United States. [1] The field is proven to have 2.5 trillion cubic feet (59 km³) of natural gas, and is widely estimated to contain as much as 30 trillion cubic feet (850,000,000,000 m³) of natural gas resources.[2] Oil also has been found in lesser quantities, but sufficient enough (with recent high oil prices) to be commercially viable.

The Barnett Shale is known as a "tight" gas reservoir, indicating that the gas is not easily extracted. The shale is very hard, and it was virtually impossible to produce gas in commercial quantities from this formation until recent improvements were made in hydraulic fracturing technology and horizontal drilling, and there was an upturn in the natural gas price.

Future development of the field will be hampered in part by the fact that major portions of the field are in urban areas, including the rapidly growing Dallas-Fort Worth Metroplex.[3] Some local governments are researching means by which they can drill on existing public land (e.g., parks) without disrupting other activities so they may obtain royalties on any minerals found, whereas others are seeking compensation from drilling companies for damage to roads caused by overweight vehicles (many of the roads are rural and not designed for use by heavy equipment).

Contents

[edit] History

The formation is named after John W. Barnett who settled in San Saba County during the late 19th century where he named a local stream the Barnett Stream. During the early 20th century during a geological mapping exercise geologists noted a thick black organic-rich shale in an outcrop close to the stream. The shale was consequently named the Barnett Shale.

The Barnett shale has acted as an important source and sealing cap rock for more conventional oil and gas reservoirs in the area. It was only thought that a few of the thicker sections close to Fort Worth would be able to support economic drilling. It was not until the 1980s when new advances in horizontal drilling and the application of fracturing, or "fraccing," wells was used by Mitchell Energy, a small independent, that the potential of the Barnett Shale was realized.[4] Even with the advent of fraccing techniques, significant drilling activity did not happen until gas prices increased in the late 1990s. Devon Energy acquired Mitchell Energy in 2002 and has established itself as the leading producer from the Barnett Shale. The large volumes and the success that independents have had in producing from the Barnett has now started to attract the interest of the large majors like Exxon, firms which had previously not been interested in the shale play.

[edit] Well completion

Barnett Shale gas drilling rig near Alvarado, Texas (2008)
Barnett Shale gas drilling rig near Alvarado, Texas (2008)

Two key developments in well design and completions have allowed the development of the Barnett Shale to be economic. These are horizontal drilling and hydraulic fracturing.

[edit] Horizontal drilling

As of 2007, recent advances in the technology of horizontal drilling have opened up the potential of the Barnett Shale as a major producer of natural gas. Horizontal drilling has changed the way oil and gas drilling is done by allowing producers to drill horizontally beneath neighbourhoods, schools and airports. Since much of the gas in the Barnett Shale is lodged beneath the City of Fort Worth, this new drilling technology has created a boom for the city. The new technology has brought in a tremendous number of independent producers both large and small.

In addition to the benefits of extended reach, there is a second important benefit, increased production. In "tight" rock (low permeability)like the Barnett Shale, the gas uses fractures to move out of the rock and into the wellbore. The fractures may be natural or induced (see below). A hoizontal well exposes more rock (and therefore more fractures) to the wellbore because it is usually designed with the horizontal portion of the well in the productive formation.

In 2005–2007 horizontal drilling in the Barnett Shale extended south into Johnson, Hill, and Bosque counties, with a 100 percent success rate on completed wells. An experimental vertical well is being drilled in McLennan County (near Waco) to assess the potential for development along the Ouachita Fold, a geological barrier which defines the southern limit of the Barnett Shale.

[edit] Hydraulic fracturing

Hydraulic fracturing carried out in the Barnett Shale is done by pumping water into the well bore at a sufficient pressure to create and propagate a fracture in the surrounding rock formation down hole. This is crucial in low permeability rock as it exposes more of the formation to the well bore and greater volumes of gas can be produced by the increased surface area. Without hydraulic fracturing the wells would not produce at an economically feasible rate.

In some of the wells there is a danger where the fracture will propagate too far and enter into the formation below the Barnett Shale. This formation is water bearing and would result in the well having to be abandoned.

Scientists at the Jackson School of Geosciences at the University of Texas at Austin, who have worked closely with producing companies to develop the Barnett play, also see potential for conflict in some parts of the Barnett where water use for hydraulic fracturing could begin competing with other uses such as drinking and agriculture.[5]

[edit] Economic Impact

As of 2007, bonuses paid to landowners in the southern counties range from $200 to $2000 per acre with royalty payments in the 18–25% range, much greater than what was being paid as recently as 2004. One lease in Johnson County now has 19 wells permitted. New drilling permits in Johnson County are being approved at an average rate of 60 per month, and in Hill County at a rate of 20 per month.

According to Jim Fuquay of the Fort Worth Star-Telegram, over 100,000 new leases were recorded in Tarrant County in 2007. Terms of recent leases have included $15,000 per acre and a 25% royalty for homeowners in Ryan Place, Mistletoe Heights, and Berkley on Fort Worth's south side, and $22,500 per acre and a 25% royalty for a group of homeowners in south Arlington.

As of March 2008, homeowners in the Greater Meadowbrook area in eastern Fort Worth are being offered $25,000 per acre and a 26.5% royalty.

In 2006, the Barnett Shale was responsible for 55,385 permanent jobs, and contributed $491 million in revenues to the state of Texas, and $228 million in revenues to local governments. Economic projections indicate that by 2015 the Barnett Shale may be responsible for more than 108,000 jobs.[6]

In addition to the drilling work, a gas pipeline network needed to transport the gas to market is being aggressively expanded. The completion of a 42-inch natural gas transmission pipeline through Hill County will open up new areas for drilling.

[edit] Operators in the Barnett

Operators, such as EOG Resources and Devon Energy, stated in public reports in mid-2005 that they estimate that one third to one half of the land in the counties that contain the Barnett Shale, including the most heavily prospected counties like Johnson and Tarrant, will get wells. (It would logically follow that the rest of the land will either get pooled in a unit that will have wells, or get nothing at all if the land is in an especially complex area.) There have been few dry holes drilled, however, because technology like 3D Seismic allows operators to identify potential hazards before they drill and avoid bad areas. Some of the hazards include faults and karst features (sinkholes). Faults may steal the energy from hydraulic fracturing, reducing its effectiveness, and karst features may contain abundant water that limits the production of gas.

[edit] Significant producers

[edit] Geography of Barnett Shale

The Barnett Shale has been classified as falling into "Core" and "Non-Core" areas of production. To date production has concentrated in the Core area where the shale is thicker and the uncertainty is reduced. This allows for the wells to be drilled at slightly lower gas prices than those in Non-core areas.

[edit] Core

[edit] Non-core

[edit] Legacy

The great economic success of the Barnett Shale gas play has spurred companies to search for other sources of shale gas across the United States. Other shale gas prospects in the United States include the Antrim Shale in Michigan, the Fayetteville Shale in Arkansas, the Marcellus Shale in Appalachia [4], the Woodford Shale in Oklahoma, and the Ohio Shale in Kentucky and West Virginia.

[edit] References

  1. ^ Barnett Shale Economic Impact Study, May 2007, p.16.
  2. ^ Barnett Shale Economic Impact Study, May 2007, p.16.
  3. ^ Won't You Be My Neighbor? (Jackson School of Geosciences, Jan. 2007)
  4. ^ The Father of the Barnett (Jackson School of Geosciences, Jan. 2007)
  5. ^ A Super-sized Thirst (Jackson School of Geosciences, Jan. 2007)
  6. ^ Louise S. Durham, Hot Barnett play creating wealth, AAPG Explorer, Sept. 2007, p.46-47.

[edit] External links