The Full MontneyA Critical Review of Well Performance by Production Analysis

Murray Reynolds, FerusRobert Bachman, Taurus

Outline

• Well performance based on statistical study

• Answer questions

‒ Effect of fracturing fluid systems in Montney Gas?

‒ Effect of completion technology in Montney Gas?

‒ Sensitivity of completion cost in Montney Gas?

Background

Background

• Feedback on previous SPE papers

‒ Lack of geological and petrophysical data (SPE 149344 )

‒ Sample size too small (SPE 168632 )

• Statistical analysis of well performance

‒ >2000 wells

‒ Incorporates geology sensitivities

6

SPE 168632 – A Comparison of the Effectiveness of Various Fracture Fluid Systems Used in Multi-

Stage Fractured Horizontal Wells: Montney Formation, Unconventional Gas – M. Reynolds

SPE168632 - Study Overview – Heritage Area

Well Locations within Study

Glacier

Pouce Coupe

Under

pressured

Over

pressured

Source: SPE 168632 – A Comparison of the Effectiveness of Various Fracture Fluid Systems Used in Multi-Stage Fractured Horizontal Wells: Montney Formation, Unconventional Gas

Geology of the Montney Heritage

• Water saturations are low and sub-irreducible in many areas

• Gross pay thickness up to 300 m

• Permeability: 0.001 to 0.06 mD.

‒ Average in the middle micro-D range

Previous Study Overview

• Scope:

‒ 50 HZ wells involved in the study

‒ 45 HZ wells were analyzable (production data > 18 months)

• Data Sources:

‒ Production data from GeoSCOUT

‒ Petrophysics data from Canadian Discovery Ltd.

‒ Frac data from Canadian Discovery’s FracDatabase

8

Field / Frac Fluid Slickwater Binary CO2 Foam N2 Foam Total

Swan 4 3 5 12

Glacier 6 3 9

Groundbirch 6 6

Sunrise 1 1 2 4

Sunset 4 4

Sundown 4 4

Pouce Coupe 4 4

Dawson 2 2

Total 11 12 12 10 45

Early time linear flow into the central fracture

1. Length = Sum of all fracture lengths

2. Flow seen for 18 months

Early Time Linear Flow

Well is black

line

Fractures are

solid gray lines

No flow

boundaries are

dashed gray

lines

Flow can only

occur into the

well through the

fractures

Late time linear flow (compound linear flow)

with flow convergence into the central fracture

1. Length = Distance between toe and

heel fracture treatment

2. Flow seen after 18 months

Late Time Linear Flow

Well is black

line

Fractures are

solid gray lines

No flow

boundaries are

dashed gray

lines

Flow can only

occur into the

well through the

fractures

Montney Heritage AreaComparing Slickwater to CO2 Foam

CO2 foam gives superior fracture properties with less proppant as compared to slickwater

For CO2 foam, more proppant per stage at high proppant concentration has positive effect

CO2 foam gives superior fracture properties with less fluid as compared to slickwater

For CO2 foam, more fluid per stage (lower overall proppant concentration) has negative effect

Analysis

Scope

• >3,500 Hz Montney wells

• 2,200 wells with 12 month production

• Montney/Doig Gas

‒ On Production Date >2010

‒ GOR > 15000 scf/stb / OGR < 75 stb/mmscf

‒ C7+ < 4%

‒ 1,627 wells

‒ Fluid Systems: ‒ Oil & water based

‒ Energized and foamedFluid Acronym Well

Count

Slickwater SW 733

Other Water Based Fluids WB 68

Energized Slickwater E-SW 150

Energized Water Based E-WB 116

Nitrified Foam N2 Foam 87

CO2 Foam CO2 Foam 181

Binary (N2+CO2) Foam Bi Foam 152

Oil Based Oil 32

Energized Oil Based E-Oil 108

Ultimately >150,000 wells will be drilled in the Montney(Jim Reimer Feb 2015)

Analysis Summary

1627 wells

Montney/Doig Gas Map

The Best and The Worst

Montney/Doig Gas Production Analysis(3 Month Cumulative Production)

BI Foam - 41,000 BOE

SW – 30,000 BOE

E-SW – 31,000 BOE

CO2 – 34,500 BOE

1627 wells

Montney/Doig Gas Production Analysis(12 Month Cumulative Production)

BI Foam - 139,000 BOE

SW – 136,000 BOE

E-SW – 127,000 BOE

CO2 – 154,500 BOE

1627 wells

Montney/Doig Gas Normalized Analysis(12 Month Cumulative Production Normalized)

BI Foam - 195 BOE/Tonne

N2 Foam – 117 BOE/Tonne

SW – 104 BOE/Tonne

CO2 – 159 BOE/Tonne

E-WB – 145 BOE/Tonne

BI Foam - 51 BOE/$

E-WB – 53 BOE/$SW – 46 BOE/$

CO2 – 53 BOE/$

WB – 57 BOE/$

BI Foam - 94 BOE/m

E-SW – 81 BOE/m

SW – 80 BOE/m CO2 – 95 BOE/m

BI Foam – 12,000 BOE/#

WB – 10,700 BOE/#

E-SW – 10,400 BOE/# CO2 – 13,500 BOE/#

SW – 12,900 BOE/#

Cumulative Production / Tonne Proppant Cumulative Production / Completion Cost.

Cumulative Production / Completed Length. Cumulative Production / Stages

Montney/Doig Gas Completion Cost

BI Foam – K$3,020

E-WB – K$3,100

SW – K$3,880

CO2 – K$2,930

WB – K$2,900

1238 wells

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

SW N2Foam

E-SW E-WB BIFoam

CO2Foam

WB

3 mo Prod (BOE)

0

50

100

150

200

250

300

350

400

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

$4,500

SW N2Foam

E-SW E-WB BIFoam

CO2Foam

WB

Median Completion Cost Well Count (with cost)

Maximize your Revenue

D=~K$500 @ $40/BOE

~$1.35 Million increased revenue on first 3 months of production

D=~($850K)

Completion Cost 3 Month Cumulative Production

Montney/Doig Gas Fields

From 2010 with 12 month Production Data

737

324

12295 78

36 26 21 20 18 11 11 11 11 10 10 9 8 7 7 748

0

100

200

300

400

500

600

700

800

Well Count

Montney/Doig Gas Players

255

191 189

130

100 95 9179 76

5441 35 32 24 21 19 19 16 15 15 14 14 14 12 11

65

0

50

100

150

200

250

300

Well Count

From 2010 with 12 month Production Data

Completion Technology

Montney/Doig GasProduction by Completion Technology

P&P (Ball) – 127,000 BOE

B&S – 134,000 BOE

P&P – 133,000 BOE

CT Cut/Port – 110,000 BOE

1591 wells

12 Month Cumulative Production(By Technology by Fluid)

Plug & Perf Ball & Seat

Plug & Perf (Ball) CT Cut/Port (Packer)

E-WB – 139,000 BOE

WB – 157,000 BOE

CO2 – 175,000 BOE

SW– 123,000 BOE

SW – 172,000 BOE

CO2 – 164,000 BOE

E-SW – 143,000 BOE

BI Foam – 140,000 BOE

WB – 119,000 BOE

SW – 129,000 BOE

E-SW– 86,000 BOE

CO2 – 113,000 BOE

E-WB – 127,000 BOE

N2 – 50,000 BOE

Regional Heritage

183

156

130

93

75

52

32

124

0

20

40

60

80

100

120

140

160

180

200Well Count

Regional Heritage Players

From 2010 with 12 month Production Data

Top 4 Operators

Regional Heritage Top 4 Operators(3 Month Cumulative Production)

562 wells

ARC – 36,800 BOE

Encana– 28,400 BOE

Murphy – 45,700 BOE

Shell – 20,700 BOE

Regional Heritage Top 4 Operators(12 Month Cumulative Production)

562 wells

ARC – 196,000 BOE

Encana– 185,000 BOE

Murphy – 140,600 BOE

Shell – 120,000 BOE

Regional Heritage Production Analysis(3 Month Cumulative Production/Top 4 Operators)

SW – 27,000 BOE

CO2 – 35,300 BOE

E-WB – 32,200 BOE

BI Foam – 48,400 BOE

Regional Heritage Production Analysis(12 Month Cumulative Production/Top 4 Operators)

SW – 139,400 BOE

CO2 – 180,000 BOE

E-WB – 151,400 BOE

BI Foam – 143,500 BOE

530 wells

Regional Heritage Normalized Analysis(12 Month Cumulative Production Normalized)

Cumulative Production / Tonne Proppant Cumulative Production / Completion Cost

Cumulative Production / Completed Length Cumulative Production / Stages

SW – 13,800 BOE/#

CO2 – 17,600 BOE/#

E-WB – 11,700 BOE/#

BI Foam – 13,100 BOE/#

SW – 110 BOE/Tonne

CO2 – 181 BOE/Tonne

E-WB – 144 BOE/Tonne

BI Foam – 212 BOE/Tonne

SW – 56 BOE/$ CO2 – 66 BOE/$

E-WB – 49 BOE/$

BI Foam – 52 BOE/$

SW – 71 BOE/m

CO2 – 112 BOE/m

E-WB – 95 BOE/m

BI Foam – 91 BOE/m

Median Completion Cost By Operator

Completion Cost3 Month Cumulative Production

0

5000

10000

15000

20000

25000

30000

35000

40000

45000

50000

SHELL CANADALIMITED

ENCANACORPORATION

ARCRESOURCES

LTD.

MURPHY OILCOMPANY LTD.

BOE

-

1,000

2,000

3,000

4,000

5,000

SHELL CANADALIMITED

ENCANACORPORATION

ARCRESOURCES

LTD.

MURPHY OILCOMPANY LTD.

K$

Median Completion Cost

0

1000

2000

3000

4000

SHELL CANADALIMITED

ENCANACORPORATION

ARC RESOURCESLTD.

MURPHY OILCOMPANY LTD.

K$

Average Completion Cost

Regional HeritageProduction by Completion Technology

P&P (Ball) – 127,000 BOE

B&S – 159,200 BOE

P&P – 133,000 BOE

CT Cut/Port – 150,200 BOE

551 wells

12 Month Cumulative /Technology / Fluid

Plug & Perf Ball & Seat

Plug & Perf (Ball)

BI FOAM – 123,500 BOE

CO2 – 195,100 BOE

SW– 116,700 BOE

SW – 206,000 BOE

CO2 – 170,300 BOE

BI Foam – 149,000 BOE

SW – 146,000 BOE

What Have we Learned

• Look back, Not over the fence‒ Statistical analysis essential to optimize design

• Normalize to get a better picture

• Fracturing fluid and completion technology does make a difference‒ Production results vary by field

• Good and bad geology varies across the Montney

What Have we Learned

• Largest developed fields: Regional Heritage, Northern Montney, Pouce Coupe

• CO2 foam fluids and binary foam fluids show lowest cost in Montney/Doig Gas

• CO2 foam and BI Foam show superior results for Montney/Doig Gas and Regional Heritage

Thanks for your Collaboration

• Bertrand Groulx, Visage

• Juliana Buendia, Ferus

• Robert Walker, Ferus

Thank youQuestions?

Appendix

Montney/Doig Gas(Completion Cost / Stage)

Montney/Doig Gas(Cost and Production / Stage)

0

500

1000

1500

2000

2500

3000

3500

4000

SW E-SW CO2Foam

N2Foam

WB BIFoam

E-WB

BOE/#

0

50

100

150

200

250

300

350

400

SW E-SW CO2Foam

N2Foam

WB BI Foam E-WB

$/#

D=~730 BOE/#D=~(K$131)

Completion Cost per # Stages 3 Month Cumulative Production per Stage

0

50

100

150

200

250

300

350

400

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

$4,500

SW N2Foam

E-SW E-WB BI Foam CO2Foam

WB

Median Completion Cost Well Count (with cost)

D=~($850K)

Maximize your Revenue(over 12 month production)

By using CO2 ~$1.65 Million increased revenue on first 12 months of production

By using BI Foam ~$0.93 Million increased revenue on first 12 months of production

Completion Cost 12 Month Cumulative Production

D=~($950K)

D=~K$80

0

20,000

40,000

60,000

80,000

100,000

120,000

140,000

160,000

180,000

SW N2 Foam E-SW E-WB BI Foam CO2Foam

WB

12 mo Prod (BOE)

D=~K$700

Montney/Doig Gas Normalized Analysis(12 Month Cumulative Production Normalized/All Fluids)

Cumulative Production / Tonne Proppant Cumulative Production / Completion Cost.

Cumulative Production / Completed Length. Cumulative Production / Stages

Regional Heritage(3 Cumulative Production by Operator)

737 wells

Regional Heritage(12 Cumulative Production by Operator)

737 wells

Regional Heritage Production Analysis(3 Month Cumulative Production/All Operators)

737 wells