DOE Selects 3 Projects to Locate Fractured Tight Gas Reservoirs

Advanced Resources International, GeoSpectrum, and State University of New York Submit Winning Projects 

The Department of Energy has selected three new research efforts that could encourage gas companies to drill with greater confidence in a wider range of naturally-fractured, tight (dense) reservoirs that hold massive amounts of untapped natural gas.

DOE will provide nearly $3 million to Advanced Resources International, Inc., Arlington, VA; GeoSpectrum, Inc., Midland, TX, and State University of New York (SUNY) at Buffalo, to demonstrate advanced technologies that can reveal natural fractures in gas-bearing formations. If successful, the projects will show that advanced fracture detection technologies developed in the Energy Department's natural gas program can be applied in a greater number of geologic settings.

The presence of fractures in reservoir is especially important for future gas production from tight gas reservoirs. The fractures can serve as conduits for natural gas in rocks so dense that very little gas would flow otherwise through the rock structure.

The vast amounts of natural gas in these tight gas reservoirs -- an estimated 460 trillion cubic feet, or nearly three times the proved gas reserves in the United States -- will become increasingly important to meet rapidly rising demands for clean-burning natural gas.

In fact, tight gas reservoirs are expected to account for 25% of all U.S. gas production in the next decade.

Industry's current success rate of drilling economic exploration wells in tight gas reservoirs is very small - about one in 15. In addition, an estimated 60% of the tight/unconventional gas resource is located under federal land. These DOE projects will show industry improved ways to increase their success rate by locating areas more favorable for gas production while increasing federal revenue from gas production on federal land.

Previously, the effectiveness of the advanced tools in the three projects have been measured by comparing their projections with data from previously drilled fields. In the new efforts, the tools will be applied in fields before any wells are drilled, a much more rigorous and risky test.

By demonstrating these tools in a manner more comparable to actual industry practice, the Energy Department hopes to show the gas industry that risks associated with drilling exploration wells in new areas can be reduced.

The nearly $3 million in DOE funding will be supplemented by more than $20 million in cost sharing from the research partners. Much of the cost-sharing will be in the form of the costs for drilling wells to verify that a reservoir is actually fractured in the manner indicated by the advanced technologies. Participants will provide seismic data and conduct well logging, coring and pressure testing to confirm the presence of natural fractures.

DOE's Federal Energy Technology Center, the principal technology arm of the department's Fossil Energy program, will negotiate final contracts and oversee these projects (dollar figures are subject to negotiations):

• Advanced Resources International, Inc., Arlington, Virginia, will demonstrate geomechanical (subsurface rock deformation) model using 3-D seismic data and local/regional stress data to predict the location and character of natural fracture clusters.

  Details:

  Project Title: "Multi-Site Application of the Geomechanical Approach for Natural Fracture Exploration" - ARI will demonstrate a geomechanical technology that incorporates observational data and delivers much of the required information to predict the location and character of reservoirs' sweet spots. Instead of depending on one observation, the geomechanical technology integrates surface, borehole and seismic observations with a scientifically rigorous geomechanical model. Geomechanics uses the fundamental principles of structural geology to relate the genesis of natural fractures and related deformation to the local and regional stresses of the area. ARI is teaming with Union Pacific Resources, the most active natural gas driller in the U.S., Barrett Resources, which is very active in developing tight gas resources, and Western Geophysical, a world leading seismic company. The projects will focus on tight gas resources in two basins in Wyoming and a third located either in Oklahoma or Texas.

  Lead researcher: Dr. David Campagna, 703-528-8420. Proposed DOE award: $1.6 million. Proposed cost-sharing: $19.5 million.

• GeoSpectrum, Inc., Midland, Texas, will use a high-quality 3-D seismic data set specifically acquired to provide statistics related to natural fractures in the subsurface, and to determine areas of high-fracture density.

  Details

  Project Title: "Identification of Fracture Induced Anisotropy in Tight Gas Sands Using Multiple Azimuth 3-D Seismic Attributes, San Juan Basin, New Mexico" - GeoSpectrum will use a high quality 3-D seismic data set that was specifically acquired to provide statistical information that can be correlated with natural fracture density. The results of their processing and analysis of the data will be integrated with regional tectonic and structural interpretations. GeoSpectrum will advance the current state-of-art by using powerful interpretation techniques and cost effective data processing systems needed to extract all the meaningful data for identifying fracture density. GeoSpectrum will team with Burlington Resources, a company that was ranked number three in 1997 in U.S. gas reserves and that is very active in pursuing tight gas resources. The project will focus on the San Juan basin in New Mexico.

  Lead researcher: Dr. James Reeves, 915-686-8626. Proposed DOE award: $1.3 million. Proposed cost-sharing: $2.2 million

• State University of New York (SUNY) at Buffalo, Buffalo, New York, will combine low-cost, innovative techniques that, when integrated, yield high-quality information to identify fractured reservoirs.

  Details:

  Project: "Innovative Methodology for Detection of Fracture-Controlled Sweet Spots in the Northern Appalachian Basin" - SUNY will demonstrate a methodology for integrating data from innovative structural geology studies, remote sensing, 2-D seismic data and soil gas surveys to identify areas of intense natural fractures. The process uses relatively inexpensive data in an innovative manner and will evaluate an area of 760 square miles for a fraction of the cost of 3-D seismic. SUNY will team with Quest Energy, Inc. and will build upon an ongoing New York State Energy Research and Development Authority-funded project. The project will focus on an area near Ithaca, New York, in the Appalachian basin.

  Lead researcher: Dr. Robert Jacobi, 716-645-6800 x2468. Proposed DOE award: $825,000. Proposed cost-sharing: $760,000.

DOE conducted R&D in natural fracture detection and characterization for more than 25 years. In fact, two of the three projects are a direct outgrowth of previously DOE-funded research. Advanced Resources International has validated their methodology by correlating areas of predicted high natural fracture density with the best producers in the field. GeoSpectrum's work will directly build upon the methodology that was validated under two past DOE projects conducted by Advanced Resources International and Blackhawk Geometrics. The methodology being demonstrated by SUNY has been developed by personnel involved in the project over the last 10 years.

- End of TechLine -

For more information:
Otis Mills, Jr., DOE Federal Energy Technology Center, 412/386-5890, e-mail: mills@fetc.doe.gov

Technical contact:
James R. Ammer, DOE Federal Energy Technology Center, 304/285-4383