performance parameters: selected rocky mountain … · 2011. 5. 2. · the uintah basin, and...

INTRODUCTION

Rockies Gas Production Challenge: The U.S. EnergyInformation Agency (2004) indicated in its Annual EnergyOutlook that Rocky Mountain region annual gas produc-tion would need to grow by 1.3 TCF or 162.5 BCF per year,based on the eight years from 2003 through 2010, to meetits 2010 gas production forecast. At least 75 percent of thisproduction growth would come from unconventional reser-voirs with tight sands contributing 859 BCF or almost two-

thirds of the total forecast. Annual Rocky Mountain gasproduction (Fig.1) has grown from about 2.1 TCF in 1990to 4.4 TCF in 2003. This represents an average annualgrowth of 169 BCF per year. Since 2000, however, the aver-age annual production has increased by only 138 BCF peryear. Future Rockies production growth rates must increaseby some 18 percent in order to reach the EIA target.

Unless the current mix of well productivity improves,the only way to meet the growth target is to increase gasdrilling. According to IHS Energy’s vintaged gas produc-

Gas in Low Permeability Reservoirs of the Rocky Mountain Region 17 The Rocky Mountain Association of Geologists

Performance Parameters: Selected Rocky MountainUnconventional Gas Reservoirs

PHILIP H. STARK, PH.DVP Industry Relations, IHS Energy, Denver, CO

LETA K. SMITH, PH.DSenior Consultant, IHS Energy, Houston, TX

ABSTRACT

Expanding unconventional gas plays have supported continuous growth of gas production in theRocky Mountain region (Rockies) since 1990. Faced with tightening North American gas supplies, theU.S. Energy Information Agency (EIA) indicates that Rockies gas production must continue to grow inorder to meet projected U.S. gas demand in 2010. It is estimated that Rockies gas drilling must increaseby about 7 percent per year in order to meet the EIA’s projections. New technologies, expanded explo-ration, increased drilling, efficient regulatory processes and collaborative efforts to balance energy devel-opment and environmental policy matters will be required to meet the EIA’s desired growth rates forRockies gas production. A handful of leading Rockies coalbed methane (CBM) and tight sands plays arethe prime sources for current growth of gas supplies.

More than 37,000 Rockies wells that produce gas from coal seams or tight sands were analyzed.Overall average annual (vintaged) Rockies reserves per well have tended to decrease over time while pro-duction decline rates have increased. This is especially true in the major historic coalbed methane plays.Unless these trends are reversed, the number of CBM well completions must increase each year in orderto maintain current levels of CBM production. Operators are benefiting from experience and new tech-nologies to increase average peak well performance over time in key tight sands plays in the Green River,Wind River, Piceance and Uinta basins. Average well reserves in several tight sands plays, though, haveslipped in recent years. Expanding tight sands exploration and development, nevertheless, offers the bestpotential to increase Rockies gas production.

CHAPTER TWO

Gas in Low Permeability Reservoirs of the Rocky Mountain Region, M.G. Bishop, S.P. Cumella, J.W. Robinson, and M.R. Silverman eds., Rocky MountainAssociation of Geologists 2005 Guidebook CD, p. 17-29.

© 2005

tion assessment, end 2003 annual base Rockies gas produc-tion declined by 283.6 BCF or 6.8 percent during 2004.Therefore, annual new drilling must replace this amount ofproduction and an additional 162.5 BCF of production tomeet the EIA’s annual growth target. To do so, the industrymust complete at least 6,500 gas wells per year, some 15percent more than the 5,649 gas wells reported during2003. Maximizing production from unconventional reser-voirs will be a key factor in meeting the EIA projection.

Constraints: The industry must overcome significantconstraints to hit the EIA’s projected gas productiongrowth target. Important issues include:

• Periodic pipeline bottlenecks

• Periodic large gas price basis differentials which havecaused some operators to shut-in production

• Restricted access to resources on public lands

• Delays during permitting and regulatory processes

• Repeated legal challenges and injunctions from anti-business interests

Location of Rockies gas plays: The map (Fig. 2) of 2003well completions in the Rocky Mountain region was usedto identify the key unconventional gas reservoirs that wereanalyzed in this study. The selected reservoirs include:

Coalbed Methane: With the exception of the Eocene BigGeorge CBM wells in the Powder River Basin, CBM wellsand associated formation codes on this map are shown indark red.

• Powder River Basin CBM production is outlined by theyellow oval on Figure 2. Eocene Big George (BGGG)wells are highlighted in yellow and shallower Wyodak –Anderson CBM completions are dark red.

• Upper Cretaceous Fruitland Coal (FRLD) in the SanJuan Basin, Upper Cretaceous Ferron coals (FRRN) inthe Uintah Basin, and Cretaceous Vermejo coals (VRMJ)in the Raton Basin (or Las Vegas-Raton Basin) are theother prime historic CBM targets. Emerging Mesaverdecoal (MVRD) plays in the Green River and Piceancebasins were reviewed but it is not yet clear what impactthese resources will have on Rockies gas production.

Philip H. Stark and Leta K. Smith


Figure 1. Rockies annualproduction from 1990through 2004 is shown withCBM volumes in violet,other gas-well gas in redand associated gas inorange.

© 2005

Tight sands reservoirs:

• Upper Cretaceous, primarily Mesaverde (MVRD) andequivalent (Almond – ALMD; Eagle – EGLE; Cameo –CMEO; Williams Fork – WMFK; Lance - LNCE) tightsand gas completions are highlighted in yellow with for-mation codes in black. Productivity of Upper Cretaceoustight sands in the Green River, Piceance, Uinta and SanJuan basins was analyzed.

Other gas plays are identified on the map with bright redwell symbols and formation code annotations. The playsinclude:

• Niobrara (NBRR), Codell (CDLL) and Dakota (DKOT)in the Denver Julesburg basin; Fort Union (FRUN) inthe deep Wind River Basin; Frontier (FRNR) in thewestern Green River Basin and Dakota (DKOT) in theSan Juan Basin.

• Analyses of interesting new Jurassic Entrada and Trias-sic Wingate (WNGT) production in the Uinta Basin andof Ft. Union (FRUN) production in the Wind RiverBasin are included.

Methodology: The objective of this study was to assessand compare gas productivity trends for key Rockies CBM

PERFORMANCE PARAMETERS: SELECTED ROCKY MOUNTAIN UNCONVENTIONAL GAS RESERVOIRS


Figure 2. Map shows Rockies 2003 well completions with oil wells in green, CBM wells in dark red and gas in bright red. Non-stan-dard colors include light blue for horizontal wells and yellow for U. Cretaceous tight sands (primarily Mesaverde equivalents) wells,with the exception of Powder River Basin (yellow oval) where yellow also identifies Big George CBM wells. See text for formationcode abbreviations.

© 2005

and tight sands reservoirs. It was determined that “vin-taged” gas production analyses provide the most compre-hensive and easy-to-use results to compare and contrastproduction performance parameters between multipleplays with large well populations. The vintaging processcombines monthly production streams for all wells com-pleted in each calendar year for any unit of production –reservoir, field, basin or region – that is analyzed. Basicoutput consists of the monthly production volumes andassociated producing well counts for the wells that arecompleted in each calendar year. The vintaged monthlyproduction data were used in this study to determine aver-age peak well production, cumulative production duringthe first 24 months, average per well reserves, total annualreserve additions, well drilling and abandonment rates, andto project future drilling rates that will be required to sus-tain or grow future gas production. All of the analyses andconclusions presented in this paper were derived from IHSEnergy’s production databases and vintaged gas analysissoftware tools.

Gas production histories for 37,845 wells were analyzedfor this study. Specific project well counts included:

Coalbed Methane 17,335 wells

Powder River Basin 10,810 wells

San Juan Basin 4,375 wells

Raton Basin 1,387 wells

Uinta Basin 763 wells

Tight sands 20,510 wells

Green River Basin 6,523 wells

–Upper Cretaceous Lance 540 wells

–Upper Cretaceous Mesaverde 2,153 wells

Piceance Basin, U. Cretaceous Mesaverde 3,122 wells

Uinta Basin 4,799 wells

–U. Cretaceous Mesaverde 851 wells

–Jurassic-Triassic 43 wells

Wind River Basin 2,184 wells

–Tertiary Ft. Union 295 wells

COALBED METHANE

Coalbed methane wells contributed 1,537 BCF or 34percent of Rockies 2004 gas production (Fig. 1). Vintagedgas production profiles (Fig. 3) provide a visual compari-son of the relative production volumes and stage of devel-opment for the four major Rockies CBM basins. The

charts reveal that substantial CBM production increases inthe Powder River, Uinta and Raton basins (1,090MMCFD) more than offset the loss of about 300 MMCFDin the San Juan Basin that occurred from 1999 through2002. San Juan Basin CBM production recorded modestincreases during 2003 and 2004, while production peakedduring 2003 in the Uinta and Powder River Basins.

There have been substantial variances in productiondecline behavior. Vintage 1991-1994 San Juan Basin pro-duction increased for 48 to 60 months before commencinggradual decline rates. The end-2003 San Juan Basin baseproduction decline rate had increased to 15 percent, whilethe Powder River Basin CBM production declinesincreased markedly since 1999, exceeding 37 percent in theWyodak and Anderson reservoirs. Production declines forFerron CBM production in the Uinta Basin and RatonBasin CBM production have increased moderately over thelast four years.

• San Juan Basin CBM delivers the largest gas volume, butproduction peaked at about 2,700 MMCFD in 1998-1999 and decreased through 2002. Powder River BasinCBM production growth was dynamic – increasing 930MMCFD from 1997 to a peak of 988 MMCFD in Sep-tember 2003. Production volumes are directly related todrilling activity. CBM completions increased from 204wells during 1997 to a high of 3,152 during 2001. Butcurtailed drilling during 2003 and 2004, when CBMcompletions averaged only 1,925 wells per year, trig-gered the production decline (72 MMCFD) during2004. It is hoped that the combination of higher volumewells from the Big George coal reservoir and increaseddrilling will be able to reverse the decline in PowderRiver Basin CBM production.

• The Uinta Basin (Drunkards Wash) production profilealso is directly related to the number of wells drilled.Drilling peaked during 2001 with 163 wells but plum-meted to only 15 wells during 2004. Correspondingly,production peaked at 294 MMCFD in December 2002and declined to 245 MMCFD by December 2004. Eventhough development started later, Raton Basin CBM pro-duction surpassed that of the Uinta Basin during 2003and continued to increase, reaching 297 MMCFD duringDecember 2004. Drilling remains robust, averagingalmost 325 wells per year since 2000, and productionshould continue to increase from this expanding play.

Vintaged average well production plots (Fig. 4) revealsubstantial variation in production performance among thefour major Rockies CBM plays and also over time in eachof the individual plays.

• San Juan Basin CBM recorded the highest average peakproduction rates (1,200 MCFD) and the largest number


Gas in Low Permeability Reservoirs of the Rocky Mountain Region 20 The Rocky Mountain Association of Geologists© 2005

of months (60 months) to reach peak production from1991 vintage wells. The time required to reach peakproduction decreased to as little as 24 months in recentvintages. Peak production also has varied since 1993,ranging from a low of about 400 MCFD in 1994 to ahigh of 900 MCFD in 1997-98 (red & orange curves).Since 1999, the vintage curves do not appear to havepeaked, but vary from year to year in almost the samerange as the 1994 -1998 vintage wells.

• During their first three years, Uinta and Raton basinCBM plays also recorded long dewatering periods (42and 41 months respectively) before reaching peak pro-duction. Since 2001, the dewatering periods havedecreased, averaging 24 months or less. After reaching

peak average well production of 600 MCFD and 500MCFD, respectively, with 1996 vintage wells, peak wellproduction trends in both the Uinta and Raton basinshave decreased, ranging from 170 to 210 MCFD.

• Powder River Basin CBM wells have reached their peakproduction in about 24 months, about 40% less than inthe other basins. However, peak well production in thePowder River Basin also has been lower, ranging froman average of about 201 MCFD for 1996 through 1999vintage wells to an average of about 118 MCFD for vin-tage 2001 through 2004 wells. There is no clear evi-dence from production performance to-date that the BigGeorge coal will boost overall average Powder RiverBasin CBM well productivity.



Figure 3. Production from the wells completed during each calendar year from 1991 through 2004 is differentiated by color bands. Pro-duction is presented in MMCFD. Note the varying scales for the four basins in this figure and in Figures 4, 7, 8, and 11.

© 2005

CBM Peak Production vs. 24 MonthCumulative Production

There is a positive correlation between average peak wellproduction and the cumulative production over the first 24months in Rocky Mountain CBM producing plays (Fig. 5).CBM wells in the San Juan and Uinta basins with thelargest peak well productivity also generate the largest pro-duction volume during the first 24 months. This patternalso prevails for the other CBM reservoirs on the chart.Average well productivity data for Mesaverde coals inGreen River Basin have been erratic but recent vintage wellsalong the Atlantic Rim have achieved some improvementover the averages indicated in Figure 5. The cumulative well

production for the first 24 months for CBM completionssince 2000 improved to 80.4 MMCF from the overall aver-age of about 40 MMCF.

CBM Average Well Reserves

The projected average reserves per well (Fig. 6) also con-form to the average well productivity patterns. San JuanBasin CBM wells, with highest historic average peak pro-duction rates and long producing life, record the largestreserves. The average reserve per well for vintage 1994through 2002 completions was 2,050 MMCF but the trendin recent vintages is decreasing, averaging less than 1,500



Figure 4. Average well production profiles from 1991 through 2003 are shown for the four key Rockies CBM gas plays. Colors are usedto highlight profiles from 1996 through 2003. Vintaged profiles provide a means to compare trends in average well productivity - likepeak production, relative decline rates and the number of months to reach peak production.

© 2005

MMCF during 2002-2003. Average reserves per well forFerron CBM wells in the Uinta Basin averaged about 1,600MMCF per well but dropped to only about 425 MMCFper well over the past three years. Vermejo coals in theRaton Basin averaged about 700 MMCF per well butdropped to about 450 MMCF per well over the past twoyears. The Wyodak and Anderson coals in the Power RiverBasin averaged 213 MMCF per well since inception anddropped below 200 MMCF per well since 1999. VintageBig George reserves per well also have tended to decreaseover time but averaged almost 970 MMCF per wellthrough 2003. Low decline rates –averaging about 10 per-cent – were calculated for Big George producers. If the lowdecline rates are sustained, projected Big George average

reserves per well could be much greater than those in theWyodak and Anderson coals. The Big George, though, alsoyields substantially more water per MCF of gas.

If recent trends of increasing decline rates, smallerreserves per well and lower peak production persist, sub-stantial increases in drilling will be required to sustain thecurrent level of Rocky Mountain CBM production.

TIGHT SANDS

Driven by high volume wells from the Upper Creta-ceous Lance formation in the Jonah Field and PinedaleAnticline, the Green River Basin spearheads tight sands



Figure 5. Average peak well production is shown by the violet line (right axis) and cumulative production over the first 24 monthsshown by the blue bars (left axis) for selected CBM plays.

© 2005

gas production growth in the Rockies. Expanding playsfrom Mesaverde and equivalent reservoirs in the Piceanceand Uinta Basins also add to Rockies gas production,while Tertiary Ft. Union and Lance reservoirs are helpingto sustain gas production in the Wind River Basin. Vin-taged gas production profiles (Fig. 7) show that gas pro-duction in these four basins has increased by 1,865MMCFD since 1998, a 58 percent increase to 5,085MMCFD, accounting for a substantial part of the overallRockies production growth. A striking increase in produc-tion decline rates (indicated by increasing left to rightslope in the vintage color bands) also is evident in all fourbasins.

• The Green River Basin had the largest 1990 base gasproduction of around 1,500 MMCF per day. Newdrilling since 1999, especially in the Jonah Field and onthe Pinedale Anticline, boosted production by some 950MMCF per day to almost 3,350 MMCF per day in2004.

• The Piceance Basin has recorded the most striking pro-duction growth, a 213 percent increase (480 MMCFD)since 1998, with most of the growth during the lastthree years. The Uinta Basin Mesaverde play continuesto expand, adding 210 MMCFD since 1998. Wind

River Basin production grew by almost 35 MMCFDduring 2004. Bill Barrett Corporation’s developments atthe Waltman and Cooper Reservoir Fields on the north-east flank of the basin in Natrona County plus expan-sion of Ft. Union pays in the Madden and FrenchieDraw fields contributed to the production growth.

Tight Sands Performance Green River, Powder River,Uinta and Piceance Basins

In contrast to coalbed methane, vintaged well peak pro-duction (Fig. 8) improved markedly (average 70 percentincrease) from 1999 (yellow curves) through 2003 in theGreen River, Piceance and Uinta basins. These increases aresubstantiated in 2004 vintage data. New completion tech-nologies and operating experience have boosted peak wellproduction to around 1,500 MMCFD in the Green RiverBasin, 800 MMCFD in the Piceance Basin and to around500 MMCFD in the Uinta Basin. These increases in wellproductivity have been achieved in spite of a shift to closerwell spacing in many active fields. Sustaining positive wellperformance will be critical in order for operators toexpand these plays beyond the current hot spots. Decreas-ing Wind River Basin well performance is the exception.



Figure 6. Average reserves perwell from 1990 through 2004 arerepresented in MMCF by yellowbars for selected Rockies CBMplays.

© 2005

After a significant slide in Wind River Basin well productivi-ties from 1996 through 2001, average peak well productionjumped during 2002 as a result of high volume Tertiary Ft.Union well completions, but the decline resumed during2003 when peak well production averaged 1,600 MMCFD.

Tight Sands Peak Production vs. 24 MonthCumulative Production

Average peak well production and cumulative well pro-duction over the first 24 months for seven Rockies tightsands plays is shown in Figure 9. Lance reservoirs at JonahField and the Pinedale Anticline in the Green River Basin

and Ft. Union reservoirs in the Wind River Basin have gen-erated the best productivity. These are followed byMesaverde and equivalent reservoirs in the Green RiverBasin, southern Piceance Basin (Garfield County, CO) andthe Uinta Basin. The general relationship - the larger thepeak well production the larger the cumulative production– holds with exception of Mesaverde wells in Rio BlancoCounty, CO. The plot for Uinta Basin Jurassic - Triassicproduction was included to show relative performanceparameters for the unique Jurassic Entrada and TriassicWingate gas production at the Flat Rock Field on thesouthern flank of the basin. Large initial potential tests(2,400 to 4,300 MCFD) in recent wells may stimulate thesearch for additional fields in these reservoirs.



Figure 7. Vintage gas production profiles from 1990 through 2004 are shown for the four major Rockies tight sands producing basins.Color bands represent the monthly producing streams from all wells completed in each calendar year.

© 2005

Tight Sands Average Well Reserves

The ranking of average well reserves by tight sand play(Fig. 10) is essentially the same as that for well productivityparameters shown in Figure 9. The Lance at Jonah Fieldand Pinedale Anticline in the Green River Basin is the starwith average reserves of almost 4,700 MMCF per well. FtUnion in the Wind River Basin is second with over 2,900MMCF per well, and Green River Basin Mesaverde is thirdwith 1,400 MMCF per well. Average Mesaverde wellreserves in the Piceance Basin, with 614 MMCF per well,and Uinta Basin, with 565 MMCF per well, also track thewell performance parameters.

Even though recent average tight sands well productionperformance parameters have tended to increase, averagewell reserves have tended to decrease. This trend is the resultof multiple factors including higher gas prices and enhancedtechnologies that allow producers to boost recoveries andcash flows from less desirable reservoirs. The chart also indi-cates that operators are harvesting more of the Rockies tightsands resources and that a large number of wells will berequired to maximize recoveries from increasingly challeng-ing reservoirs. This tendency is shown in the following tablewhich compares average tight sands reserves per well for1990 - 2004 completions with average reserves per well for2000 - 2004 completions. Reserves in this table were deter-



Figure 8. Average well production profiles from 1991 through 2003 are shown for the four key Rockies tight sands gas plays. Colorsare used to highlight profiles from 1996 through 2003.

© 2005

mined by fitting exponential equations to compositemonthly vintage (all gas wells completed during each calen-dar year) production data in each play. Exponential declinesrepresent very conservative projections. The numbers likelyrepresent 90% or better proven recovery estimates.

Reserves Per Well (MMCF)

Basin 1990–2004 2000–2004

Green River Lance 4,664 4,500

Green River Mesaverde 1,436 625

Wind River Basin 2,330 750

San Juan Basin 675 332

Piceance Basin 614 505

Uinta Basin 565 388

Performance Parameters: Lance and Mesaverde,Green River Basin

Vintaged gas production profiles can be used to evaluateperformance parameters between basins or between differ-ent reservoirs or plays in the same basin. The most signifi-cant difference between the Lance and Mesaverde plays inthe Green River Basin (Fig. 11) is the general erosion ofMesaverde well performance over the past decade whileLance well performance has varied but has not deteriorated.Differences in maturity, geographic dispersion and specificreservoir parameters certainly account for part of the vari-ances. Average Mesaverde well reserves declined from about2,500 MMCF per well during the early 1990’s to an aver-age of 625 MMCF per well since 1999. After improvingfrom 1998 through 2000, Mesaverde peak well productionslumped from about 1,000 MCFD in 2000 to about 550



Figure 9. Average peak well production is shown by the violet line (right axis) and cumulative production over the first 24 months isshown by the blue bars (left axis) for selected tight sands plays.

© 2005

MCFD in 2003. Considering gas prices, drilling depthsand relevant costs, recent Mesaverde performance parame-ters in the Green River Basin, though, are not out of linewith those in the Piceance and Uinta Basins. Operators ineach play will be challenged to balance well performancewith costs as the plays extend from known sweet spotsinto untested parts of these continuous reservoirs. TheLance, so far, is the anomaly. Average peak well produc-tion in the Lance, has remained higher than 3,400MMCFD since 1995. Lance well reserves averaged 4,664MMCF since 1992 and no vintage average reserves wereless than 3,000 MMCF. Lance exceptional performanceparameters certainly drive the quest to discover anotherJonah Field.

SUMMARY

Rocky Mountain producers are challenged to boostannual production by 162 BCFD through 2010. Unconven-tional reservoirs will play a key role in determining the out-come in response to this challenge.

• The outlook for coalbed methane is mixed. Vintagedaverage peak well production and average well reserveshave declined in the large historic CBM reservoirs. As aresult, substantially more wells must be completed eachyear in order to grow CBM production. It was not yetclear from data used in this study if Big George perfor-mance will be sufficient to offset declining CBM produc-tion in other Powder River Basin coal reservoirs.Clearly, established CBM fairways must be extendedand new CBM plays must be developed in order toextend the growth of Rockies CBM production.

• Tight sands developments likely hold the key for futureRockies gas production trends. Expansion of Upper Cre-taceous Mesaverde and equivalent production in theGreen River, Piceance and Uinta basins will be essentialto sustain future Rockies production. Expanding pro-duction and discoveries in high performing reservoirslike the Lance at Jonah Field and the Pinedale Anticlineand the Ft. Union in the Wind River Basin are critical tomeet the EIA’s production target. Rockies explorationalso must increase to test the potential of new plays likethe Jurassic-Triassic in the Uinta Basin and deeper playsin established trends.



Figure 10. Post-1990 averagereserves per well for tight sandsplays are shown in this chart. Barsrepresent the average reservesper well for the reservoirs thatwere assessed.

© 2005

• The evolution of technologies to lower costs and toimprove recoveries from increasingly difficult unconven-tional reservoir conditions is also important.

ACKNOWLEDGEMENTS

The authors are indebted to Curtis Smith and GregPoyet-Smith on IHS Energy’s Houston Consulting teamwho handled data retrievals and Gas Business Model pro-cessing to create the vintaged gas summaries that were thefoundation for the analyses presented in this document.

Thanks also are due to Laura Hagan and Doug Meadewho created drilling statistics and map files in support ofthis study.

REFERENCE

U.S. Energy Information Agency, 2004, Annual Energy Outlook2004 with Projection to 2025, DOE/EIA – 0383, 262 p.



Figure 11. Average well productivity and reserves since 1990 for Upper Cretaceous Lance and Mesaverde plays in the Green RiverBasin are compared.

© 2005

performance parameters: selected rocky mountain … · 2011. 5. 2. · the uintah basin, and...

Documents