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Upping the stakes with frack analysis

The use of analytics in unconventional resource exploration

By: Keith Holdaway, Principal Oil and Gas Solution Architect, SAS

The Beverly Hillbillies sitcom on American TV in the 1960s brought viewers a novel lesson about oil and gas exploration and production: You could be out "shootin' at some food and up through the ground" could come some "bubblin' crude. Oil, that is. Black gold. Texas tea."1

Fast forward 50 years: People may still be out "shootin' at some food" somewhere, but they aren't too likely to bust open a gusher with a wayward shot. The easy oil deposits that sit in reservoirs under pressure, waiting to be tapped, are mostly known. The rigs are in place, doing their work, pumping oil.

Wildcat fracking
No, today's big play wildcatters are a different breed. Denim jeans and Red Wing work boots have been replaced by the gray suits and wingtips of geologically degreed wizards of smart who analyze nuanced data for tell-tale signs of oil embedded in the pores of sandstone, carbonates and shale. After finding the oil, the wizards work to determine the best chemical, heating and pressurizing processes that allow the oil to be released and pumped to the surface. As you might suspect, it's a financially risky, capital-intensive affair that's not for the faint of heart – or those without faith in their data.

A quick look at "matrix" and "fracture" acidizing will demonstrate the process. Once a well is drilled, both techniques send chemically laced water downhole into geological formations to help interconnect the rock pores for increased permeability. The hydrocarbons then drain to the wellbore and are pumped to the surface, where they are separated. Matrix acidizing is a low-pressure technique that leaves the reservoir rock intact, while fracture acidizing pressurizes the chemical and physically breaks the rock apart to increase hydrocarbon flows.2 In common parlance, this process is known as hydraulic fracturing or "fracking."

High-stakes dramas
As you can imagine there's no shortage of controversy about injecting chemically laced water below ground and then bringing it back up. Communities are measuring the environmental impacts against the jobs and economic activity that can occur in areas where sands and shale formations hold promise. While those discussions continue, worldwide demand for oil continues apace. The United States produced 5.5 million barrels of the 19.1 million barrels it consumed each day in 2010 but will need 21.9 million barrels each day in 2035.3 But the United States isn't the only oil consumer. Demand in Asia will soon far outstrip US and other worldwide consumption; it's projected to grow from 22 million barrels each day in 2005 to 43 million barrels per day in 2030.4 Other regions expect demand growth as well.

On the supply side, many Eastern and Western European countries are discovering their own unconventional fields and using them to break their dependence on energy from Russia.5 And new unconventional fields seem to be discovered nearly every day in North and South America, either in new formations or in wells previously thought near the end of their usable reserves.6 Because of these dynamics, fracking will likely continue to gain momentum worldwide, if only it can reduce its inherent wildcatting factor and gain greater public confidence.

Data is the new black gold
In this environment, data will be the key to the new frontiers of safe and profitable unconventional resource extraction. Producers must seek the most productive geological zones and optimize their fracking processes given the conditions the data tells them exist unseen miles below. Even now, for example, drilling in the Barnett, Texas; Fayetteville, Arkansas; Woodsford, Oklahoma; Haynesville, Louisiana; and Eagle Ford, Texas areas are creating new data resources – like Formation Evaluation While Drilling (FEWD), Logging While Drilling (LWD) and Measurements While Drilling (MWD) – that can be combined and used together to wring out the wildcat factor.

After finding the oil, the wizards work to determine the best chemical, heating and pressurizing processes that allow the oil to be released and pumped to the surface.

But as you can imagine, these data streams are incredibly complex and nuanced. Making sense of them can help stimulate the reservoir and recover the considerable expense involved in fracking. Failure to do so might be like throwing money down the hole. The challenge requires the use of logical workflows and processes available in analytics-based exploration and production methodologies7 like modeling, simulating and predicting well productivity through integrated exploratory, predictive and forecasting capabilities.

Used together, these advanced analytical capabilities can extract hidden predictive information, identify drivers and leading indicators of efficient well production, determine the best intervals for stimulation, and recommend optimum stimulation processes and frequencies. These capabilities work together to decrease the uncertainties about what is beneath the surface, matching high-tech drilling processes to the subterranean landscapes, and otherwise shifting the E&P mindset to that of a manufacturer's model.

It's a process that works, and increasingly seems to be the wave of the future, wingtips and all.

References:
1. Lyrics, The Beverly Hillbillies theme song by Paul Henning.
2. "Drilling Optimization in Unconventional and Tight Gas Fields: An Innovative Approach," by Keith Holdaway, (Society of Petroleum Engineers, SPE 142509).
3. " Annual Energy Outlook 2011," by the US Government's Energy Information Administration (DOE/EIA-0383(2011), April 2011.
4. " Asia's Strategic Challenge," presentation by Dr. Tsutomu Toichi, the Institute of Energy Economics, Japan, at the International Institute for Strategic Studies' IIIS-JIIA Conference, June 2-4, 2008.
5. The Unconventional Oil & Gas Center website keeps a close eye on international shale gas, coalbed, gas hydrates and tight gas and oil. The site pays special attention to Poland: "Looking at recent trends Poland stands to become a popular venue for the unconventional game. Looking to become an international competitor and break its Russian dependence …" www.ugcenter.com
6. " Peak oil" is a term used to describe a point in time when the world's peak crude oil production will begin to diminish. The date for a peak oil occurrence is hotly debated, as new exploration and production techniques continue to open new opportunities and reserves, including revisiting wells previously thought to have been depleted. Read more: www.investopedia.com/terms/p/peak_oil.asp#ixzz1fOeAJ36V 
7. Ibid. 2

Keith Holdaway, Principal Oil and Gas Solution Architect, SAS

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