Fruitland to Barnett to…

Oct. 25, 2010
Have all of the large shale gas and oil fields in the US been found, as one chief executive officer claimed in mid-October?

Alan Petzet
Chief Editor-Exploration

Have all of the large shale gas and oil fields in the US been found, as one chief executive officer claimed in mid-October?

It's partly a matter of definition, but it's also probably not the case, said J. Larry Nichols, executive chairman and a cofounder of Devon Energy Corp., Oklahoma City.

"Maybe in terms of large plays like the Barnett, Marcellus, or Fayetteville shale that cover half a state, but undoubtedly there are a lot of other shale formations that are prospective both for gas and oil that we may not have realized yet," Nichols said.

Nichols looks back 20 years to when Devon and others unlocked Fruitland coalbed methane in the San Juan basin. And it was 2003 when Devon commercialized the Barnett shale in the Fort Worth basin.

"Both of those are very analogous in that they show how technology continually opens up new areas for the production of oil and gas," Nichols said.

Fruitland CBM

In 1988-90, Devon and the former Burlington Resources Inc. and Amoco Production Co. pioneered technology and geological ideas that opened the Fruitland and other coals worldwide.

Thousands of wells drilled through the Fruitland detected gas, but no one knew how to produce it at a profit.

"All it produced was water, so you plugged it," Nichols recalled. Geologic thinking and an engineering advance changed that.

The breakthrough came with the knowledge of how the gas was trapped in the coal molecules and that reducing the pressure by producing the water released the gas.

"The first well produced nothing but water for a long period until we discovered that cavitation was a faster method of dewatering the coal beds," Nichols remembered.

Devon still operates the Northeast Blanco Unit, where the first Fruitland wells began producing in 1990. The unit in 2010 has averaged 78 MMcfd from 183 Fruitland coalbed wells and 46 MMcfd from 352 completions in other formations. Unit cumulative production is 1.278 tcf from the coals and 561 bcf from the other zones.

Cracking the Barnett shale

The CBM plays that started the unconventional gas revolution in the late 1980s were meaningful, "but nothing compared with what we have in shale gas," Nichols noted.

Mitchell Energy & Development Corp. in 1999 thought it had figured out how to perform hydraulic fracturing in shale in a small part of the Fort Worth basin. The company was for sale, but a skeptical industry wasn't interested. Devon had new ideas and bought Mitchell Energy in 2002.

"By combining the hydraulic fracturing that Mitchell Energy had used plus our own introduction of horizontal drilling, Devon was able to open up this whole new incredible resource for natural gas which has spread around the world," Nichols said.

"My goodness did it work!" Nichols told Oil & Gas Journal's Unconventional Gas International Conference in Fort Worth earlier this month. "Cana, Woodford, Fayetteville, Haynesville, Horn River, Eagle Ford, Marcellus, and potentially many, many others that lots of us in the industry are looking at and poking around on. Tremendous growth in a relatively short period. It was just 7 years ago that Devon drilled the first well that combined horizontal drilling and hydraulic fracturing in a new area."

Devon's net production from the Barnett shale averaged 1.1 bcfd of gas equivalent, including 39,000 b/d of condensate and natural gas liquids, from about 4,000 producing wells, in the quarter ended June 30.

The future

The geologic paradigm is that industry is no longer drilling stratigraphic and structural traps, it is now drilling the source rock itself.

"The broad lesson here is that time and time again, people look at a given basin and say 'we've discovered all the oil and gas there is to discover in that basin,' and pretty soon someone comes up with new ideas on how to do things."

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