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Tinker, 2014
URTeC Aug, 2014
Unconventional Reservoir Future
Science, Technology and Economics
Scott W. Tinker Bureau of Economic Geology
The University of Texas at Austin, Austin
Tinker, 2014
BEG Shale Reserves & Production Team
Dr. Svetlana Ikonnikova, co-PI
The Alfred P. Sloan Foundation
IHS & DrillingInfo for database access
For potential conflicts of interest see http://www.beg.utexas.edu/info/shale_rsrvs_prod.php
Acknowledgements
Tinker, 2014
Unconventional Reservoirs
U. S. Shale Gas and Shale Oil
Science, Technology & Economics
Outline
Tinker, 2014
Global Natural Gas
Resources v. Cost
QAe980
Source: IEA World Energy Outlook (2009)
0 3,000 6,000 12,000 9,000 15,000 30,000 18,000 21,000 24,000 27,000
Resources (TcF)
Pro
du
cti
on
co
st
(2008 $
/Mb
tu)
LNG
Sour
Arc
tic
De
ep
Wate
r
Shale C
oal
Bed
M
eth
an
e
Pro
du
ced
Co
nven
tio
na
l
Tight
15
10
5
0
Global Consumption
115 Tcfy
Tinker, 2014
Global Oil Resources v. Cost
0 2000 4000 10,000 6000 8000
140
20
0
Resources (billion barrels)
Pro
du
cti
on
co
st
(2008 $
)
Coal
to
liquids
Gas
to
liquids
Oil shales
Shale oil
Pro-
duced MENA
Other conventional
oil
Deepwater and
ultra-deepwater
40
60
80
100
120
Heavy
oil
&
bitumen
EOR
Arctic
CO2 EOR
Source: IEA World Energy Outlook (2009)
Global Consumption
31 Bby
Tinker, 2014
5
10
15
20
25
30
Ma
rke
ted
Pro
du
cti
on
(Tc
f)
0 0
50
100
150
200
250
300
Pro
ve
d R
es
erv
es
(Tc
f)
U.S. Natural Gas Production and Reserves
Data: BP World Energy 2012
End-of-Year
U.S. Proved Reserves
Annual
U.S. Production
Tinker, 2014
U.S. Natural Gas Production (TcF)
http://www.eia.gov/energy_in_brief/about_shale_gas.cfm
0
5
10
15
20
25
1990 1995 2000 2005 2010
Shale gas
Coalbed methane
Tight gas
Non-associatedoffshoreAlaska
Associated with oil
Non-associatedonshore
14 TcF
9 TcF
23 TcF
Tinker, 2014
U.S. Natural Gas Production (TcF)
http://www.eia.gov/energy_in_brief/about_shale_gas.cfm
0
5
10
15
20
25
1990 1995 2000 2005 2010
Shale gas
Coalbed methane
Tight gas
Non-associatedoffshoreAlaska
Associated with oil
Non-associatedonshore
14 TcF
9 TcF
23 TcF
Conventional Gas
Total Natural Gas
From a 2004 Tinker Talk to the IPAA US Natural Gas 2004 forecast
Unconventional Gas
1949 1955 1961 1967 1973 1979 1985 1991 1997 2003 2009 2015
0
5,000
10,000
15,000
20,000
25,000
An
nu
al
Na
tura
l G
as P
rod
ucti
on
(B
cf)
EIA (1949-1990) and NPC (1991-2015)
15 TcF
10 TcF
25 TcF
An Anticipated Evolution
Tinker, 2014
Model: Rice University, Medlock, 2012
Actual
Shale Gas Forecast vs. Actual
B
F
H
M
Tinker, 2014
Annual US Oil Production
From: James D. Hamilton, Working Paper 17759, NATIONAL BUREAU OF ECONOMIC RESEARCH, 2012
Th
ou
san
d b
arr
els
/year
Tinker, 2014
Monterey Woodford/Anadarko
Utica Barnett
Uinta Niobrara
Permian Midland
Permian Delaware Granite wash
Eagle Ford
Bakken
2010 U.S. SHALE LIQUIDS
PROJECTION
5
4
3
2
1
0
2010
U.S
sh
ale
liq
uid
s p
roje
cte
d g
row
th
(Mb
pd
)
2012 2014 2016 2018 2022 2020
After Morse et. al., 2012, Energy 2020: North America, the new Middle
East: Citi GPS: Global Perspectives & Solutions, figure 14, p. 17.
QAe465
~ 1.4 Bby from
shale by 2022
10% IRR: $44/bbl
10% IRR: $50/bbl
10% IRR: $68/bbl
10% IRR: $44/bbl
10% IRR: $50/bbl
10% IRR: $51/bbl
IRR Source: Rystad Energy
United States
Consumption
~ 7 Bby
Actual
PB
B
EF
Tinker, 2014
Annual US Oil Production
From: James D. Hamilton, Working Paper 17759, NATIONAL BUREAU OF ECONOMIC RESEARCH, 2012
Th
ou
san
d b
arr
els
/year U.S. Production
~ 3.1 Bby Today!
Tinker, 2014
Unconventional Reservoirs
U. S. Shale Gas and Shale Oil
Science, Technology & Economics
Outline
Tinker, 2014
Unconventional Resource Plays
Modified from: EIA and National Geographic QAei2915
Utica
HilliardBaxterMancos-Niobrara
Cody
Heath Fm
Hermosa
Mancos
Lewis
Niobrara Fm
Mowry
Monterey- T emblor Pierre- Niobrara
Monterey
Manning Canyon
Kreyenhagen
Gothic-Hovenweep
Miocene
Miocene-Oligocene
Eocene
Cenozoic
Cretaceous
Jurassic
T rassic
Mesozoic
Permian
Pennsylvanian
Mississippian-Penn
Mississippian-Devonian
Devonian
Ordovician
Mississippian Cambrian
Paleozoic
T ight sands
Basins
Utica
Marcellus
Bakken
Cline
W oodford
Bend
W olfcamp
Eagle Ford
New Albany
Niobrara Fm
Excello-Mulky
Fayetteville
Niobrara- Mowry
Gammon
(Midland)
Pearsall
W oodford-Caney
Chattanooga
Utica- Collingwood
Antrim
Antrim
Antrim
T uscaloosa
Haynesville
Floyd-Neal
Conasauga
Floyd-Chattanooga
Chattanooga
Barnett
A valon-Bone Spring W olfberry
W olfcamp (Delaware)
Barnett- W oodford
Tinker, 2014
Unconventional Resource Plays
Modified from: EIA and National Geographic QAei2915
Miocene
Miocene-Oligocene
Eocene
Cenozoic
Cretaceous
Jurassic
T rassic
Mesozoic
Permian
Pennsylvanian
Mississippian-Penn
Mississippian-Devonian
Devonian
Ordovician
Mississippian Cambrian
Paleozoic
T ight sands
Basins
Marcellus
Fayetteville
Haynesville
Barnett
Bakken
Eagle Ford
Permian
Basin
Tinker, 2014
Unconventional Resource Plays
Modified from: EIA and National Geographic QAei2915
Miocene
Miocene-Oligocene
Eocene
Cenozoic
Cretaceous
Jurassic
T rassic
Mesozoic
Permian
Pennsylvanian
Mississippian-Penn
Mississippian-Devonian
Devonian
Ordovician
Mississippian Cambrian
Paleozoic
T ight sands
Basins
Marcellus
Fayetteville
Haynesville
Barnett
Bakken
Eagle Ford
Permian
Basin
Tinker, 2014
Unconventional Resource Plays
Marcellus
Fayetteville
Haynesville
Barnett
Bakken
Eagle Ford
Permian
Basin
Middle
Devonian
From Blakey; http://cpgeosystems.com/paleomaps.html
Laurentia
&
Baltica
Bakken
Tinker, 2014
Bureau of Economic Geology
U.S. Shale Gas Integrated Study
What is the total resource base in place?
What portion is technically recoverable?
What potion is economically recoverable?
What is the long-term production outlook?
Tinker, 2014
Ikonnikova S., et al. 2013. SPE Res. Eval & Eng
Barnett Productivity
Tiers
Tinker, 2014
Well Profiles Vary by Tier
BEG Shale Reserves and Production Project
Barnett • Variable leases
• Multiple operators
• Wide range of
completion types
Tinker, 2014
BEG Shale Reserves and Production Project
Barnett Drilling by Tier
Tinker, 2014
BEG Shale Reserves and Production Project
Gas Price $4.00/mcf
45 Tcf
Tinker, 2014
$-
$1
$2
$3
$4
$5
$6
$7
$8
$9
$10
0
0.5
1
1.5
2
2.5
1995 2000 2005 2010 2015 2020 2025 2030
He
nry
Hu
b $
20
10
Tcf
pe
r Y
ea
r
Tcf per Year (Base Case Sensitivity to Price)
Tcf @ $10 HH
Tcf @ $6 HH
Tcf @ $4 HH
Henry Hub $2010
Barnett
Production Forecast
BEG Shale Reserves and Production Project
45 Tcf
Tinker, 2014
0.000
0.005
0.010
0.015
0.020
0.025
0.030
0.035
0.040
0.045
0.050
29 34 39 44 49 55 60 65 70
Re
lati
ve
Fre
qu
en
cy
Cumulative Production (Tcf)
35 Tcf
56 Tcf
OGIP 444 TcF
Browning, J. et al. 2013. SPE Econ & Mgmt
Barnett Monte Carlo Production Distribution
Tinker, 2014
Fayetteville Productivity Tiers
Tinker, 2014
Fayetteville
Production Forecast
BEG Shale Reserves and Production Project
Tinker, 2014
$-
$1
$2
$3
$4
$5
$6
$7
$8
$9
$10
0.0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1.0
1.1
1.2
2005 2010 2015 2020 2025 2030
He
nry
Hu
b $
20
10
Tcf
pe
r ye
ar
Tcf per Year (Base Case Sensitivity to Price) Tcf @ $10 HH
Tcf @ $6 HH
Tcf @ $4 HH
HH $2010
Fayetteville
Production Forecast
BEG Shale Reserves and Production Project
17 Tcf
Tinker, 2014
0
0.01
0.02
0.03
0.04
0.05
10 12 14 17 19 21 23 26 28
Re
lati
ve
Fre
qu
en
cy
Cumulative Production (Tcf)
Fayetteville Monte Carlo Production Distribution
13 Tcf 23 Tcf
OGIP 80 TcF
BEG Shale Reserves and Production Project
Tinker, 2014
Haynesville Productivity Tiers
Tinker, 2014
Haynesville Production Forecast
BEG Shale Reserves and Production Project
Tinker, 2014
Haynesville Production Forecast
BEG Shale Reserves and Production Project
37 Tcf
Tinker, 2014
0
0.005
0.01
0.015
0.02
0.025
0.03
0.035
0.04
0.045
0.05
0.055
14 24 33 43 52 62 72 81
Re
lati
ve
Fre
qu
en
cy
Cumulative Production (Tcf)
24 Tcf 62 Tcf
Haynesville Monte Carlo Production Distribution
OGIP 489 TcF
BEG Shale Reserves and Production Project
Tinker, 2014
$0
$2
$4
$6
$8
$10
$12
$14
$16
$18
Tier 1 Tier 2 Tier 3 Tier 4 Tier 5 Tier 6 Tier 7 Tier 8 Tier 9 Tier 10
Barnett Low Btu
Barnett High Btu
Fayetteville Shallow
Fayetteville Medium
Fayetteville Deep
Haynesville
Breakeven Economics 10% IRR
Economics by Tier (Bcf)
BEG Shale Reserves and Production Project
$4 Base Case
Tinker, 2014
$0
$2
$4
$6
$8
$10
$12
$14
$16
$18
Tier 1 Tier 2 Tier 3 Tier 4 Tier 5 Tier 6 Tier 7 Tier 8 Tier 9 Tier 10
Barnett Low Btu
Barnett High Btu
Fayetteville Shallow
Fayetteville Medium
Fayetteville Deep
Haynesville
Breakeven Economics 10% IRR
Economics by Tier (Bcf)
BEG Shale Reserves and Production Project
$6 Case
Tinker, 2014
1712 Tcf OGIP free
BEG Shale Reserves and Production Project
Marcellus OGIP
Barnett
OGIP 445
HVille
OGIP 489
FVille
OGIP 80
All Maps Shown with Common Distance Scale
Tinker, 2014
1712 Tcf OGIP free
BEG Shale Reserves and Production Project
Marcellus OGIP
Barnett
OGIP 445
HVille
OGIP 489
FVille
OGIP 80
All Maps Shown with Common Distance Scale
Tinker, 2014
0
2
4
6
8
10
12
0
2
4
6
8
10
12
1995 2000 2005 2010 2015 2020 2025 2030
He
nry
Hu
b P
rice
($
20
12
/M
MB
tu)
TC
F
Marcellus
Haynesville
Fayetteville
Barnett
HH $2012
Base Case ($4) Stacked Production
BEG Shale Reserves and Production Project
45 TcF
37 TcF 17 TcF
U.S. Consumption
~ 25 TcF/Year
Tinker, 2014
EIA Price Case Stacked Production
0
2
4
6
8
10
12
0
2
4
6
8
10
12
1995 2000 2005 2010 2015 2020 2025 2030
He
nry
Hu
b P
rice
($
20
12
/M
MB
tu)
TC
F
Marcellus
Haynesville
Fayetteville
Barnett
HH $2012
BEG Shale Reserves and Production Project
45 TcF
37 TcF 17 TcF
U.S. Consumption
~ 25 TcF/Year
Tinker, 2014
$6 Case Stacked Production
0
2
4
6
8
10
12
0
2
4
6
8
10
12
1995 2000 2005 2010 2015 2020 2025 2030
He
nry
Hu
b P
rice
($
20
12
/M
MB
tu)
TC
F
Marcellus
Haynesville
Fayetteville
Barnett
HH $2012
BEG Shale Reserves and Production Project
45 TcF
37 TcF 17 TcF
U.S. Consumption
~ 25 TcF/Year
Tinker, 2014
Model: Rice University, Medlock, 2012
EIA
BEG EIA price deck
Forecast vs. Actual
Tinker, 2014
0 3,000 6,000 12,000 9,000 15,000 30,000 18,000 21,000 24,000 27,000
Resources (TcF)
Pro
du
cti
on
co
st
(2008 $
/Mb
tu)
LNG
Sour
Arc
tic
De
ep
Wate
r
Shale C
oal
Bed
M
eth
an
e
Pro
du
ced
Co
nven
tio
na
l
Tight
15
10
5
0
~5,600
Tcf
Global Natural Gas
Resources v. Cost
QAe980
Source: IEA World Energy Outlook (2009)
Barnett Fayetteville Haynesville Marcellus Total
BEG Original Gas in Place (Tcf) 444 80 489 1712 2725 BEG ($4) Production – 2050 *Marcellus through 2070 45 17 37
Field Wide Recovery % 10% 21% 8%
Tinker, 2014
Unconventional Reservoirs
U. S. Shale Gas and Shale Oil
Science, Technology & Economics
Outline
Tinker, 2014
The 5E Waltz
Energy Economy
Environment
Efficiency
Education
Tinker, 2014
The Radical Middle
Academia/NGO
Government
Industry
The
Radical
Middle
Tinker, 2014
• Can we re-complete existing wells economically?
• Will technology and economics allow for development of the large
OGIP and OOIP in middle tiers?
• Can we improve facilities and manage flaring, choking of wells and
other operational limitations?
• Can we improve fracture characterization and increase the number of
contributing stages?
• Do we understand rock mechanics and what creates surface area?
• Can we forecast and manage decline of production and improve our
estimates of EUR?
• Can we drill fewer wells from fewer pads?
• Can we use less water?
• What controls induced fracture morphology and can we improve our
imaging of fracture networks?
• Can we improve characterization of hydraulic fractures by deploying
smart nanosensors?
• Can we improve our understanding of adsorbed gas? Porosity?
Permeability?
Some Key Questions
Tinker, 2014
The Radical Middle
Economics
Technology
Science
Success
Porosity
Adsorption
Permeability
Characterization
Fracture Imaging
Recompletions
Middle Tiers
Facilities
Contributing Stages
Rock Mechanics
Manage Decline
Fewer Wells
Less Water
Tinker, 2014
Energy and the Economy
QAe963
Korea
Australia
Brazil
World
China
United States
0
TP
ER
pe
r cap
ita
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
GDP per capita
India
5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000
After: Rice World Gas Trade Model
Medlock, 2012
TPER = Total Primary Energy Requirement.
Energy needed to facilitate Total Final
Consumption (TFC does not include
conversion and transmission losses).
Japan
Tinker, 2014
Energy and the Economy
QAe963
Korea
Australia
Brazil
World
China
United States
0
TP
ER
pe
r cap
ita
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
GDP per capita
India
5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000
After: Rice World Gas Trade Model
Medlock, 2012
TPER = Total Primary Energy Requirement.
Energy needed to facilitate Total Final
Consumption (TFC does not include
conversion and transmission losses).
Japan
~3 billion
people
Tinker, 2014
Energy and the Economy
A Global Challenge
QAe963
Korea
Australia
Brazil
World
United States
0
TP
ER
pe
r cap
ita
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
GDP per capita
India
5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000
After: Rice World Gas Trade Model
Medlock, 2012
TPER = Total Primary Energy Requirement.
Energy needed to facilitate Total Final
Consumption (TFC does not include
conversion and transmission losses).
Japan
Developed Nations • Balance of Trade
Exports
Imports
• Regulation and Planning
Infrastructure
Resources
Permitting
• Emissions, Climate, Environment
• Energy Security
Developing Nations • Food
• Housing
• Clothing
• Education
• Healthcare
• Electricity
Tinker, 2014
Oil “Frontiers” Unconventional Technology for Conventional Reservoirs
0 2000 4000 10,000 6000 8000
140
20
0
Resources (billion barrels)
Pro
du
cti
on
co
st
(2008 $
)
Coal
to
liquids
Gas
to
liquids
Oil shales
Shale oil
Pro-
duced MENA
Other conventional
oil
Deepwater and
ultra-deepwater
40
60
80
100
120
Heavy
oil
&
bitumen
EOR
Arctic
CO2 EOR
Source: IEA World Energy Outlook (2009)
Tinker, 2014
1. Governments, industry and academe must work together; we all play a role in objective, balanced energy education.
2. The scale of energy demand is difficult to comprehend; energy transitions take many, many decades.
3. Energy security — affordable, available, reliable, sustainable — drives the energy mix and should be the goal of energy policy.
4. Energy efficiency is underappreciated; individuals matter!
5. Diverse energy portfolios are inevitable and healthy.
6. Renewables are growing but will remain regional supplements until major advances are made in energy storage.
7. Shale will play a global role in the energy future; “above ground” challenges are as important as “below ground.”
8. Natural gas and nuclear are the new foundational energies.
9. Oil and coal are abundant at the right price, and difficult to replace as transportation and electricity fuels.
10. Energy, the economy and the environment are linked.
Tinker’s Top Ten