07122-16

Goal
The goal of this project is to develop drilling, completion, stimulation and production strategies that will encourage development of the New Albany shale in the Illinois basin. The focus is to reduce financial risk, so that the development of this emerging resource is economically attractive, and the resource is converted to reserves.

Performers
Gas Technology Institute, Des Plaines, IL 60018
Amherst College, Amherst MA 01002
Bureau of Economic Geology (University of Texas), Austin, TX 78758
Pinnacle Technologies, Houston, TX 77064
ResTech Inc., Houston, TX 77068
University of Massachusetts, Boston, MA 02125
Texas A&M University, College Station, TX 77843
West Virginia University, Morgantown, WV 26506
Aurora Oil and Gas, Traverse City, MI 49684
CNX Gas, Canonsburg, PA 15317
Daugherty Petroleum Inc. (NGAS), Lexington, Kentucky 40509
Diversified Operating Corp., Golden, CO 80401
Noble Energy Inc., Crossville, IL 62827
Rex Energy, State College, PA 16801
Southwestern Energy, Houston, TX 77032
Trendwell Energy, Greenville, MI 48838

Background
The New Albany shale is an under-developed gas shale. Although the New Albany contains up to 160 tcf of in-place gas, lack of knowledge about its reservoir properties has discouraged investment in this resource. The major factors in restraining activity in the New Albany shale include: (1) the reserve size is not known with any reasonable degree of certainty; (2) production rates in test wells have been too low for commercial production; (3) the amount of commercially recoverable gas is unknown; (4) drilling and completion costs relative to production rate are too high; (5) technology, such as horizontal drilling, has been tested, but to date production increase has not been significant relative to cost of these wells; and (6) advanced formation evaluation techniques and fracture stimulation are considered too expensive compared to the current production potential. These problems, along with an inability to delineate and characterize the natural fracture system of this shale and the lack of effective drilling, completion, and stimulation techniques designed specifically for the New Albany, are preventing the successful exploitation of this resource.

Potential Impacts
The average estimate of producible gas present in the New Albany shale is 10.5 tcf (1.9 to 19.2 tcf.) Successful completion of this project and widespread dissemination of the results has the potential for initiating commercial production that could result in the addition of 10 tcf of gas to the US natural gas supply; about 40% of current annual demand. Techniques and methods developed through this project are expected to be applicable to similar gas shale formations elsewhere (e.g., the Devonian, Antrim, and Ohio shale) thereby further increasing the national gas supply.

Accomplishments
The New Albany Shale is a field-based project where data from cooperative wells are used by the research team and results of analytic work are tested and verified in the field. To date a full cooperative well has been completed with Daugherty Petroleum (NGAS) and one is underway with CNX Gas. A reverse walk-away seismic profiling survey (RVSP) was also performed on a CNX well using the services of Z-Seis Reservoir Imaging who also cost shared the survey. Results from the survey indicated a dominant NNE/SSW direction for natural fractures. However, this information is not in agreement with known geological features and this discrepancy is being reviewed. Data from recent cooperative coring and logging of a well in the vicinity of the RVSP well and results from the planned fracture diagnostic survey will establish the azimuthal direction of the dominant open fracture system. The latter survey is planned for April-May, 2010. To date, 127 data sets including logs and production data have been collected from state geological surveys and companies like Aurora, NGAS, Noble Energy, CNX Gas and Trendwell.

ResTech developed the cost matrix for various logging, coring, and core analyses for the project. Forty sets of logs and core data received from producing companies were transferred to ResTech as part of a databank that will be established for the NAS project. A ResTech client agreed to provide data for GTI from NAS core lab analyses (managed by ResTech) in 3 wells in Kentucky and ResTech interpretation of logs in two of these wells. ResTech also investigated the effects of adsorbed gas on density and porosity calculation from logs and verified that the adsorbed gas has a 0.37 g/cc and modified their log analysis model for this effect.

Two cores from Noble Energy were studied by BEG. The project, in cooperation and cost sharing of Daugherty Petroleum (NGAS) and CNX Gas, cut a total of 360 feet of cores that are being studied by BEG and other researchers. The project also cost shared petrophysical and geochemical measurements by Weatherford and CoreLab. Fracture descriptions of these cores are being conducted. Preliminary examination has revealed that they are slant cores, so that potentially they can provide more information about fracture spacing than would vertical cores. Narrow, tall, sealed fractures, normal to bedding are also present in several cores. These samples will be compared with fracture samples already obtained from other cores from Sullivan Co. at the Indiana Survey. The relevance of tall, narrow sealed fractures in the shale reservoir is that they may interact with hydraulic fracture treatments. Also present in the cores are many horizontal breaks parallel to bedding.

Water, gas, and microbial samples from seven wells in the northern producing trend of the Antrim were collected in mid-January by Amherst College. The wells sampled had been previously analyzed in the early 1990’s. The purpose of re-sampling is to investigate the influence of gas production on water and gas geochemistry and microbiology in the system by comparing the current findings to the initial findings; these results will provide an indication of what will ultimately happen to wells in the NAS and other unconventional gas sources as the gas reserves are harvested. In addition, Amherst collected 45 samples from Trendwell, Noble, Aurora, Deka, and Breitburn. Amherst College completed most of the chemical analyses and is making preparations to analyze the microbial communities that have been sampled. In addition to this field study, a culturing experiment to examine the influence of growth of methanogenic microorganisms on shale surface area has been developed.

Drilling of the first industry cooperative well began on July 27, 2009 in Christian County, KY. Our industry partner is NGAS. Drilling of a second cooperative research well started in December 2009 and completed in February, 2010. Hydraulic fracturing and fracture diagnostic surveys are scheduled for April-May, 2010. The cooperative work includes coring, logging, core and log analysis, fracture modeling, and microseismic fracture diagnostic survey. All field data acquisitions have been completed successfully and drilling of the observation well is in progress.

In the area of reservoir engineering, the project has followed a two-pronged approach: a traditional analytical/simulation analysis approach and a novel stochastic/neural network scheme for production analysis. This is due to the fact that pressure and rate data from New Albany wells are scarce and as such, results from conventional approaches would be limited to those fields with regular pressure-rate records. Texas A&M has tested various analytic techniques and has shown that the power law decline analysis using normalized pressure and rate data results in reliable production evaluations. Parallel to these studies, West Virginia University is taking a field-level approach where using the RACGEN and NFFLOW simulation packages developed by NETL, they can simulate production from a number of wells to arrive at a set of model-derived reservoir properties that match the actual production. We anticipate combination of the two approaches will be a valuable tool for reserve estimate and production forecasting.

Natural fractures and hydraulic fracturing have been the foci of the New Albany Shale project. To this end, BEG is investigating the reactivation of natural fractures due to hydraulic fractures and developing a numerical model for predicting the natural fracture intensity. In the meantime, Texas A&M is developing a hydraulic fracture model that takes the findings from the BEG research and develops a hydraulic fracture model for use in fracture stimulation of naturally fractured formations. Work on hydraulic fracturing will culminate in the April-May, 2010 cooperative field experiment. This experiment included drilling, coring, and logging of an observation well offsetting two horizontal wells. This observation well will be used for microseismic imaging of hydraulic fracturing of the two horizontal wells. CNX gas is our industry partner in these experiments and has provided substantial cost sharing of the experiment.

Summary of Project Tasks
A Project Management Plan consisting of a work breakdown structure and supporting narrative that addresses the overall project objectives and approach has been submitted. As well, a Technology Status Assessment summary report describing the state-of-the-art of the proposed technology has been submitted. The following major tasks are under way.

Data Gathering. Data gathering started in August 2008 and continues. In these efforts, the research team collects and compiles existing data relevant to their field of study from participating producers and public sources for use in the project. Data includes geologic, formation evaluation, and production information. These data will be compiled in a database to be prepared by West Virginia University.

Geologic Studies. These studies will be conducted primarily by the Bureau of Economic Geology to develop characterization methods and techniques of natural fractures in the New Albany shale. Cores, vertical and horizontal well image logs, and drilling and production data will be used to characterize the key fracture attributes of orientation, size distribution, intensity, porosity patterns and spatial distribution. Attributes determined to have first order control over gas production will be identified. The expected result of the geologic studies task is a field-verified methodology to identify high productivity locations in the New Albany shale.

Geochemical Analysis. The thermogenic and biogenic origins of the gas present in the New Albany shale will be characterized through geochemical analysis by Amherst College and the University of Massachusetts. Gas and co-produced water samples will be analyzed using laboratory tests, gas chromatography, and mass spectroscopy to determine their organic content. Analyses of microbial populations will be conducted to identify active community methanogens. If possible, the methanogens will be isolated and cultured to determine rates of methane production. This task will result in a characterization methodology for New Albany shale gas that can be used to find areas with high gas potential.

Formation Evaluation. An effective formation evaluation technique for New Albany shale will be developed by ResTech using borehole imaging, coring, geochemical analyses, and seismic imaging data. Fractures will be identified from logs such as FMI, CAST, and the construction of borehole maps of dip projections of fractures. Seismic anisotropy analysis will be used to correlate and validate fracture azimuths from logs and borehole images. This task will result in a log analysis methodology for the New Albany shale.

Reservoir Engineering. Reservoir engineering studies will be carried out primarily by Texas A&M to develop a reliable well testing and production evaluation technique. Pressure transient models will be designed and interpreted using data from existing pressure transient tests for horizontal and hydraulically fractured wells. Production data will be analyzed and interpreted using existing and emerging technologies.

Fracture Modeling. This task will entail an investigation of the propagation of hydraulic fractures in the presence of natural fractures and will be performed primarily by Texas A&M. The propagation of fractures from pre-existing cracks will be traced using a computer code based on the complex variable boundary element method for studying mixed mode (tensile-shear) crack propagation, coalescence, and intersection. This task will result in a numerical model for prediction of hydraulic fracturing in the New Albany shale.

Fracture Design and Fracture Diagnostics. Pinnacle Technologies will conduct studies using geophysical fracture diagnostic surveys of hydraulic fracturing in New Albany shale wells. Current completion/stimulation practices will be evaluated by examining geological, completion, stimulation, and production data. Field experiments will be designed and performed to measure hydraulic fracture geometry and evaluate stimulation effectiveness. Hydraulic fracture mapping and modeling and production data analysis will be supplemented by selected reservoir modeling studies to provide an improved understanding of the New Albany shale and the effect of various stimulation alternatives on well performance. The results of field experiments will be integrated with geologic, geophysical, completion, and production data to optimize development of the New Albany shale.

Best Practice Analysis. West Virginia University will develop an easy-to-use fractured reservoir simulator tailored to New Albany shale formation. In addition, drilling, completion, and stimulation data will be collected to construct a comprehensive database that reflects the range of practices used in the New Albany shale. Data driven models using artificial neural networks will be used to develop recommendation matrices that can guide users on how to perform future operations based on lessons learned from past practices. A user-friendly guideline for using the New Albany shale best practice analysis methodology will be developed.

Environmental and Carbon Management Studies. The environmental impacts of carbon dioxide emissions and waste management will be studied and the best practices identified. Water resources required for upstream and downstream operations will be used to design prudent water management practices. This task, which will be primarily performed by GTI, will result in a document describing the best water and carbon management schemes for the New Albany shale.

Field Data Acquisition and Verification. GTI will acquire research quality data from hydraulic fracturing, coring, and logging operations and provide the data to research and industry participants relative to their corresponding tasks. The deliverable from the Task will be high quality research level data.

Coordination, Technology Transfer, and Reports. GTI will coordinate and manage all technical aspects of the project, integrate results, and develop a comprehensive procedure for development of the New Albany shale. This task’s objective also includes efficient technology transfer through workshops, presentations at technical meeting, and preparation of periodical and final reports. The deliverable will include a field verified methodology for drilling and completion of New Albany wells.

Project Start: July 23, 2008
Project End: July 22, 2010

DOE Contribution: $3,445,159
Performer Contribution: $1,057,564

Contact Information:
RPSEA – James Pappas (jpappas@rpsea.org or 281-313-9555)
NETL – Virginia Weyland (Virginia.Weyland@netl.doe.gov or 281-494-2517)
Gas Technology Institute – Iraj A. Salehi (Iraj.salehi@gastechnology.org or 847-768-0509)

Additional Information

Annual Progress Report [PDF] - August 2008 - September 2009

Publications

The project has been presented at SPE, AAPG, SPWLA, EDGERS Conferences, and the World Gas Conference. The following papers have been published.

“New Albany Shale Gas Project; A Joint Industry Project Sponsored by Research Partnership to Secure Energy for America (RPSEA)”, December 2008 issue of Exploration and Production News Letter by Hart Energy, Salehi, Iraj and Angelica Chiriboga.

"Identification of microbial and thermogenic gas components from Upper Devonian black shale cores, Illinois and Michigan basins", The American Association of Petroleum Geologists. (AAPG) Bulletin, v. 92, no. 3 (Paper), Anna M. Martini, Lynn M. Walter, and Jennifer C. McIntosh - GTI

“New Albany Shale Gas Project; A Joint Industry Project Sponsored by Research Partnership to Secure Energy for America (RPSEA),” International Oil and Gas Review, 2009, volume 7, Salehi, Iraj and Angelica Chiriboga.

“Natural fractures in the New Albany Shale and their importance for shale gas production” @009 International Coalbed and Shale Gas Symposium, Tuscaloosa, Alabama, Gale, Julia F. W. and Stephen E. Laubach.

“Economic Impact of Reservoir Properties and Horizontal Well Length and Orientation on Production from Shale Formations, Application to New Albany Shale”, submitted and accepted for 2009 SPE Eastern Regional Meeting,Dahaghi, A. Kalantari and S. D. Mohaghegh.

“Top-Down Intelligent Reservoir Modeling of New Albany Shale”, in preparation for 2009 SPE Eastern Regional Meeting, Dahaghi, A. Kalantari and S.D.Mohaghegh.

“New Albany Shale Gas Research Project”, World Gas Conference 2009, Perry,Kent and Iraj Salehi.

Poster presentation on New Albany Shale project at the NAPE conference, Houston, Texas; Iraj salehi, GTI.