Gas Shales: Brittleness

Fracturing is effective and production can be achieved if shales are brittle

Key parameters� Mineralogy

� High Silica content � High Carbonatic content� Low Clay content

17

� Geomechanics� Strenght properties� Elastic properties

Gas Shales: Well Production Profiles

18

� Total Porosity : 3 -15% - Permeability: nanodarcies� Initial production is due to the free gas contained in the pore space and in fractures� With the pressure depletion a flow contribution comes from the “desorbed” gas; lower but long lived� There is no production plateau - The production life can be >50 years

Source: Scotia Woterous

Gas Shale: has turned upside down the natural gas market in US

� Unconventional Gas by 2012 will account

for approximately half of US natural gas

production

� US total technically recoverable gas

resources are 1,700-2,200 Tcf, more than

30-40 years of production at current level

� Gas Shale is the fastest growing

unconventional play

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� Several basins and new shale gas formations are being developed thanks to the technology improvement

� By 2011 most new reserves growth will come from unconventional shale gas reservoirs

� Concepts and technologies can be exported to similar basins outside North America

Gas Shale: main US Plays

Main

Emerging

Hist

2020

ALLIANCEQuicksilver – eni

Joint Venture

No two Shale Gas Plays are alike! Every play requires a strategy of exploration and development

Gas Shale: main US Plays

� Most of the plays are within

simple or slightly deformed basins

� Targets correspond to “old” and

“brittle” organic-rich source rocks

� Commonly source rocks had

sufficient burial to reach the gas

window, avoiding over-maturity

2121

window, avoiding over-maturity

� Basin rejuvenation brought them

at relatively shallow depth

� Mainly Paleozoic plays in foreland

basins

� Mainly Jurassic-Cretaceous plays

in passive margin related systems

Gas Shale – The most famous analogous: Barnett Shale

6400

6500

BARNETTBARNETTSHALESHALE

OrganicOrganic--richrich marine marine shelfshelf depositdeposit

withwith naturalnatural fracturesfractures partiallypartially sealedsealed

2222

6600

6700

VIOLA LSTVIOLA LST

ELLENBURGERELLENBURGER

Gunn Mountain 1Gunn Mountain 1Somervell CountySomervell County

Barnett South AreaBarnett South Area

Gas shale: Well Logs Response

23

Source: Newfield

Barnett Shale Expansion

OLDER THAN 19851986 - 19901991 - 19951996 - 20002001 - 20052006 - 2008

Alliance – eni 27.5%

• The limits of the producing Barnett Shale have been defined by drilling activity

• In “Conventional” terms the Barnett Shale gas area should be considered as a large

Fort Worth

24

producing Gas Field

• No “Exploration” risk is present in the Alliance area

• Alliance represents a portion of the Field Under Development

Fort Worth

Source: Quicksilver Resources

US Gas Shale Expansion

� The technology development and commercial favorable conditions have determined an

extremely rapid surge of activity in the Barnett shale

� The “learning time” in other basins is now extremely shortened

25

Gas Shale – Depth Range, well cost

� Low costs for drilling and completion is a key factor in the US gas shale expansion

� Competitive market for material and services and optimisation of D&C solutions are key

factors

26

Gas Shale – Key Technologies

27

Source: Scotia Waterous

Gas Shale – Cluster horizontal drilling

� Wells are drilled horizontally in

clusters

� Pads can contain up to 24 wells

� Rigs are skid mounted

� Overall surface footprint is minimised

250’

28

Alliance B#11 Wellhead

Gas Shale – Multistage Hydraulic Fracturing in Horizontal wells

� Effective fracture length is the key

objective

� It requires sufficient fracture

conductivity to allow effective

fracture fluid clean-up

� Novel hybrid slick-water fracture design has been effective, allowing placement of

29

� Novel hybrid slick-water fracture design has been effective, allowing placement of

large-diameter high-conductivity proppant in fractures

� A balance between increased number of stages and increased costs is required for the

optimal solution (each shale is different – different natural fracture system and stress

regime)

- Increase Recoverable Reserves - Increase Production

100 ft

Vertical Well

2000 ft

Horizontal Well

100 ft

Vertical Well 150 ft frac

2000 ft

Hor Well with ten fracs of 75 ft

Maximize Reservoir Contact

30

222 ft2

Of Contact

20 times

Vertical example

270 times Vertical Example

13,5 times Horizontal Example

1013 times Vertical Example

50 times Horizontal Example

Multi Fracturing Branches

Extreme Reservoir Contact

31

3079 times Vertical Example

152 times Horizontal Example