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WaterLess Fracturing Technology

SPE October 12, 2010 Tyler, TX

Frac Water Usage Issues

How much is 5 million gallons?

The 5 million gallons of water needed to drill and fracture a typical deep

shale gas well is equivalent to the amount of water consumed by:

New York City in approximately seven minutes

A 1,000 megawatt coal-fired power plant in 12 hours

A golf course in 25 days

7.5 acres of corn in a season

While these represent continuing consumption, the

water used for a gas well is a one‐time use.

1Source: www.chesapeake.com Chesapeake Energy March 2010 Fact Sheet

“WATER USE IN DEEP SHALE GAS EXPLORATION”

http://www.chesapeake.com/

Frac Water Usage Issues

Environmental impact of water uses

City Water, Power, Golf Course, and Agriculture

Water flows back to the ecosystem and is naturally

recycled

Oil Field Water Use

30-80% of Frac water stays in the reservoir

The majority of water flowed back has to be disposed

Frac water leaves the ecosystem never to be used

again

2

Why Waterless is Important to Society

97.5% of the Earth‟s Water is Salty

2.5 % is Fresh

Of the Fresh Water 69.6% is Frozen in Ice Sheets

30.1% is Beneath the Ground

0.3% is Surface Water (Lakes, Rivers, Wetlands, Atmosphere, Plants, & Animals)

Fresh Water is a Limited Resource while the World‟s Population Increases by 83 Million People per Year Average American Uses 100 Gallons/Day at Home → US Total 714 MMBPD (US

Petroleum Consumption 19.5 MMBPD Source: EIA: 2008)

1857 Gal. to Produce 1 LB of Beef (816,600 Gal. During the Life of a Beef Cow)

2900 Gal. to Produce 1 Pair of Blue Jeans (Cotton is a Water Intensive Crop)

Desalination is an Alternative but the Cost is Tied Directly to Energy Prices

3.3 Million People Die/Year from Water Related Health Problems

3Source: National Geographic April 2010, Special Issue, “Water our Thirsty World”

Designing a Perfect Fracturing Fluid

Base Fluid that is Readily Available

Low viscosity & surface tension for easy recovery

Fluid viscosity can be increased to carry proppant

Viscosity will break back to Base Fluid viscosity

Base Fluid Miscible in the reservoir hydrocarbons

Low hydrostatic head for underbalanced recovery

Frac fluid will change to a gas for 100% recovery

Fluid can be easily recovered, recycled and/or sold

No frac fluid disposal cost

4

Perfect Frac Fluid Application - Gas

Low Pressure Application (7,061 ft @ BHP 362 psi):

Initial Rate:

60 Mscf/day

Final Rate:

520 Mscf/day &15.8 bbl

condensate/day @ 112 psi

Frac:

46,200 # proppant

in 620 bbl

Down 2 7/8” tubing

Build-up

Test

362 psi

at 7,061 ft

Plunger Lift

Installed

Rate

Pressure

90 days

Cleanup to Sales Line

5

0

50

100

150

200

250

300

0 50000 100000 150000 200000 250000 300000 350000 400000

Ra

te (

BO

E/O

p D

ay)

Cumulative Production (BOE)

Incremental Reserves from LPG Fracture Treatment

26 % Incremental Reserves :

305 K – 243 K = 62 K BOE

62 K BOE X $ 60 = $3.7MM !Rec. 30.8 K X $ 60 = $1.85 MM

Remaining Reserves up 310%

Perfect Frac Fluid Application - Oil

23 Years

Perforate & Produce

(8 Months)

35,000 # Proppant

Stimulation

Doe Creek Oil

6

What is used for the Perfect Frac Fluid?

Liquid Petroleum Gas (LPG)

Propane C3

Viscosity = 0.10 cps

Specific Gravity = 0.51

Surface Tension = 7.6 dynes/cm

Butane C4

Viscosity = 0.18 cps

Specific Gravity = 0.58

Surface Tension = 12.4 dynes/cm

7

LPG as a Fracturing Fluid

LPG Gelling:

LPG gelling chemistry results in

visco-elastic rheology

The system is comprised of the

base gel component, an activator

and a breaker

„Adjustable‟ viscosity from 100 cP

to 1,000 cP by varying loadings

Viscosity break times from 30

minutes to greater than 4 hours

Broken fluid viscosity is that of

the LPG base fluid (0.1 – 0.2 cP)

0

50

100

150

200

250

0

100

200

300

400

500

600

0 81 158

Tem

pe

ratu

re (

°F)

Vis

co

sit

y (

cP

) at

100 s

-1

Time (min)

Break Test - 150 °F Gellant @ 6 gptActivator @ 6 gptBreaker @ 1 gpt

0 80 160

8Photo courtesy of Stacey Walker – Chevron Technology Company

Fluid Viscosity Profiles

9

0

50

100

150

200

250

300

350

0:00 0:30 1:00 1:30 2:00 2:30 3:00 3:30 4:00 4:30

Vis

cosi

ty

(Cp

s @

10

0/s

ec)

Time (minutes)

Viscosity ProfilesViscosity 124 F Gel10 - XL46 - Brk10

3_3_3 3_3_3.5 3_3_4 4_4_4 6_6_7

LPG Physical Properties

Propane Saturation Curve

Liquid Region

Vapor RegionTc = 206.1 °F

Pc = 606.6 psi

10

Supercritical Fluid

Tc = 206.1 °F

Pc = 606.6 psi

Tc = 282.3 °F

Pc = 600.2 psi

Tc = 305.6 °F

Pc = 550.6 psi

Tc = 258.2 °F

Pc = 629.8 psi


11

LPG Density:

LPG is nearly half the density of

water and generates gas at

approximately 1530 scf/bbl liquid

LPG hydrostatic gradient at

0.23 psi/ft greatly assists post

treatment clean up by allowing

greater drawdown with

approximately half the hydrostatic

of water

A naturally underbalanced, self

energizing fluid

Fluid Specific Gravity

Water 1.0

Frac Oils 0.82

Methanol 0.79

Butane 0.58

Propane 0.51


12


Fluid Viscosity (cP)

105 F

Water 0.66

Methanol 0.40

Butane 0.14

Propane 0.08

13


Fluid

Surface

Tension

dyn/cm at

70F

Water 72.8

Frac Oils 21.8

Methanol 22.7

Butane 12.4

Propane 7.6

14


0.1

1

10

100

1000

10000

100000

0.001 0.01 0.1 1

Cap

illar

y Th

resh

old

Pre

ssu

re (p

si)

Pore Diameter (microns)

Fluids Capillary Threshold Pressure

0.0001 mD 0.001 mD 0.01 mD 0.1 mD 1 mD

Gas-Oil @ 22 dyne/cm

Gas-Water @ 72 dyne/cm

Gas-Propane (Liquid) @ 7.6 dyne/cm

0.003 mD (~0.01 microns )

Cap. Pressure Water = 2,000 psi

Cap. Pressure LPG = 220 psi

15

Fluid 1 (0.00033 mD, 0.00070 mD, 0.00054 mD)

60% CO2 / 40% of (20% methanol / 80% 3% KCl water)

Gellant, foamer, oxidizing breaker

Fluid 2 (0.00050 mD)

95% N2 / 5% of (20% methanol / 80% 3% KCl water)

Gellant, foamer, oxidizing breaker

Fluid 3 (0.00080 mD)

50% C7-C11 hydrocarbon blend / 50% CO2 - Oil gellant, breaker

Fluid 4 (0.00087mD)

Water Micellar surfactant

Fluid 5 (0.00086 mD)

80% CO2 / 20% of (20% methanol / 80% 3% KCl water) - Gellant,

foamer, oxidizing breaker

Fluid 6 (0.00053 mD)

LPG - Gellant, breaker

Fluid 7 (0.00002 mD)

60% CO2 / 40% 3% KCl water - Gellant, foamer, oxidizing breaker

Fluid 8 (0.00011 mD, 0.00012 mD)

80% CO2 / 20% 3% KCl water - Gellant, foamer, oxidizing breaker

Fluid 9 (0.00016 mD)

3% KCl Water - Micellar surfactant, friction reducer, breaker

Fluid 10 (0.00036 mD)

60% CO2 / 40% 3% KCl water - Biopolymer gellant, foamer, breaker

Fluid 11 (0.00006 mD)

80% N2 / 20% 3% KCl water - Biopolymer gellant, foamer, breaker

Fluid 12 (0.00066)

2.5% HCl acid - Corrosion inhibitor, Micellar surfactant, non-emulsifier,

mutual solvent

LPG Application Technology

1a

2

3

4

57

8

9

1011

12

1b

8a1

6

1a

1b

72 Hour shut-in

6 hour shut-in

Repeat test

8a

LPG – 493 psi (3.4 MPa)

drawdown provides 99.9%

regained permeability

Montney Fracturing - Fluid ConsiderationsPetroleum Society – Canadian Institute of Mining Metallurgy and Petroleum Paper 2009-154 16

Propane Saturation Curve

Liquid Region

Vapor Region

Supercritical Fluid


17

1. Blender thru HP pumps to wellhead

2. Wellhead thru tubulars into fracture

3. Fracture and leak-off to reservoir conditions

Low-pressure

surface handling

1

23

Effective Fracture Length

Propped Fracture Length

Conventional Fracturing

Conventional Fracturing Fluids

GAS FLOW NO GAS FLOW

Fluid Block

18

GAS FLOW

LPG Fracturing



Propped Fracture Length

19


For a 7,000 ft well at 140 F, 50% methane results in 100% vapor

20

The LPG Fracturing process and procedure are based upon an

independent hazard and operability study completed by a

professional risk management company

HAZOP recommendations are incorporated into the equipment design, operating

procedures and inspection processes to mitigate and eliminate potential risks.

Specialized LPG equipment and operating procedures meet or exceed all industry

standards for handling of LPG – IRP Volume 8-2002 and NFPA 58

LPG Frac equipment is Canada Transport and U.S. D.O.T. compliant.

Completely enclosed, pressured systems are used for LPG storage, proppant

addition, pumping and handling throughout the fracturing process.

Nitrogen, an inert gas, is utilized throughout the process to maintain pressure control

on all vessels.

Employees are experienced and rigorously trained.

The LPG Frac process is approved by the energy boards of Alberta, BC,

New Brunswick, Quebec, Saskatchewan, Pennsylvania and Texas.

LPG Fracturing Process

21

First 100% LPG Frac Treatment performed January 2008 with over 500 treatments performed.

Gelled LPG Fluid fracture stimulates wells in place of conventional fracturing fluids such as oil, water, methanol, CO2 and N2

LPG Fracturing operations are based out of Red Deer, AB Canada, and Kilgore, TX

LPG Fracturing is a patented process with applications filed in Canada, United States and Internationally.

Overview of LPG Fracturing

22

LPG Bulkers – 500 bbl capacity

1 - 206,000# Proppant Addition

1 - 70,000# Proppant Addition

Typical LPG Equipment Spread

Fluid LPG

4,000 bbl (170,000 gal)

Proppant20/40 mesh sand

276,000 lb

Pumping 11,250 HHP, 30 bpm

LPG Fracturing Process

23

LPG Fracturing has successfully completed over 500 treatments

Deepest treatment to 12,150 ft

Largest job to 410,000 lbs on a horizontal well

Highest pressure treatment to 13,200 psi

Treatments placed into over 40 different reservoirs

Maximum injection rate 60 bpm

Frac treatments competed for over 50 clients including EnCana, Husky,

EOG, Devon, Canadian Natural Resources, Nexen, Duvernay, Paramount,

Compton, EXCO, Union Gas Operating, RC Energy and SandRidge

In all cases LPG fracturing has demonstrated significant benefit in well

performance and completion costs relative to conventional well fracturing

Overview of LPG Fracturing

24

LPG Stimulated Formations

SANDSTONE FORMATIONSCARBONATE

FORMATIONS

Artex Ellerslie Belloy

Bakken Falher Ostracod

Basal Colorado Gething

Basal Quartz Halfway

Belly River ManvilleSHALE FORMATIONS

Bluesky Milk River

Bow Island Nikanassin Base Fish Scale

Cadomin Notikewin Doig

Cadotte Paddy First White Specks

Cardium Rock Creek Montney

Chinook Sparky Second White Specks

Colony Spirit River Colorado Shale

Doe Creek Foremost/Belly River Chinkeh

Dunvegan Viking Wilrich

Edmonton Sands

Wilcox

Delaware

Dinosaur Park

Tesnus

Charlie

Niobara

Marcellus

Utica

25

LPG Application Performance

Horizontal Well Fracturing - Treatment:

6 Zone Horizontal TVD 4,021 ft MD 7,445 ft

Treating Mode88.9 mm (3 ½”) Tubing

114 mm ( 4 ½”) Liner

Proppant at 6 of 16 tonnes stage

( 35,400 lb) stagesLPG Volume to 375 m3 (2,350 bbl)

Proppant Concentration to 600 kg/m3 (5 ppg) Rate at 3.2 m3/min ( 20 bpm)

26


Client supplied Pressure Transient Analysis:

Compares three different treatment types in three offsetting wells

Improved production to economic levels allowing field development

Initial “Tight Hole” status while acquiring offsetting drilling rights

WellSand

Completed

Frac Type

(size)

Test

Date

Pay

Interva

l

Effective

Frac Length

(Conductivit

y)

Comment

1Cardium

(gas)

Liquid CO2

6.0 Tonnnes(13,000 lb)

Feb-03 26 ft85 ft

(90 mD-ft)Uneconomic - Suspended

2Cardium

(gas)

Nitrified

Frac Oil

60 tonnes

(132,000 lb)

Feb-08 33 ft130 ft

(200 mD-ft)

Uneconomic (refrac with

LPG, ~ 500 bbl frac oil

recovered – Economic)

3Cardium

(gas)

LPG

32 tonnes

(66,000 lb)

Feb-08 14 ft275 ft

(980 mD-ft)Economic

27

Mature Assets

Benefits of Mature Assets

Existing Infrastructure

Known Unrecovered Reserves

Lower risk to add new recoverable reserves

Challenges of Mature Assets

Low Reservoir Pressure

Fluid Loading

Fluid trapping in the reservoir

Frac Fluid Recovery

28

Environmental impact of water based frac fluids can be significant

Large quantities of water are often needed for hydraulic fracturing

Fluids trapped in the formation are difficult to remove < 50% recovered

Recovery of trapped water often requires opening the well to atmosphere –

flaring

Added chemicals need to be removed to recycle the fluid

Recovered water often contains contaminates such as oils, minerals, salts

Water that cannot be recycled is often difficult and expensive to dispose


Frac Site

Trucking Wellbore Trucking

Water

Source

Created

Fracture

Disposal

29

Environmental impact of LPG based frac fluids can be minimal.

Quantities of LPG needed for hydraulic fracturing can be lower

LPG is NOT trapped in the formation; easy to remove ~100% recovered

LPG is very light and mobile; avoids the need for flaring to recover

No contaminates such as minerals or salts are recovered with the LPG

LPG can be produced with the natural gas to the pipeline and recovered by gas

processing

LPG Fracturing

Refinery

Frac Site

Created

Fracture

Pipeline

30

LPG Frac Applications

Oil Wells – LPG is miscible in oils to thin the oils for enhanced recovery and

higher initial production rates

Re-Stimulation of Oil Wells – excellent fluid for re-stimulating of lower

pressure oil wells to improve production of existing wells

Under-pressured reservoirs for reduced hydrostatic during clean-up, plus

improved recovery rates

Recompletions with LPG recovery through existing facilities to recover all LPG

fluid to sales gas

Reservoirs that exhibit high capillary pressures with conventional fluids to

eliminate phase trapping

31

LPG Frac Applications

Exploration - pumping a completely reservoir compatible fluid that allows

excellent stimulation plus zero-damage evaluation

Multiple frac treatments completed without the need for immediate frac clean-

up between treatments

Sub-normally saturated reservoirs to eliminate altered saturations and

relative permeability effects – gas, oil and water

Low permeability reservoirs requiring long effective frac lengths to sustain

economic production

Improving cut-off parameters for economic recovery by providing effective

fracture stimulation otherwise unachievable with conventional fracturing

32

LPG Fracturing – a superior alternative

3333

Questions ?

Contact Information

Daniel PurvisUS Technical Advisor/[email protected]

Robert LestzChief Technology Officer [email protected]

Audis ByrdVice President & Chief Operating Officer 903-530-0625 [email protected]

34

mailto:[email protected]




Flow Back Equipment PipelineSuggested Requirements

Sand Catcher

Protect choke & line heater as required

Choke

Drop pressure before liner heater

LPG cools with pressure drop

Liner Heater

Capacity to approx. 2 MMBtu

Used to heat returns as required to maintain

separator temperature

Separator

Maintain operating conditions within vapor

region

Pressure Tank

Collect ALL liquids to a pressure tank vented to

the flare

Stabilize ALL liquids prior to shipping or

handling

Closed System Flow Back Schematic

35

Wellhead

Sand Catcher(Optional)Choke

Manifold

LineHeater

PrimarySeparator

PressureTank

Vent to flare

Flare

Liquids to pressure tank

Gas and vapor

Pipeline

Gas and vapor to pipeline


HD-5 Propane is the most commonly applied LPG product in fracture treatments

100% HD-5 Propane is applied to treating temperatures to 205 °F

Above 205 °F, Commercial Butane is mixed with the HD-5 Propane

100% Commercial Butane allows treating temperatures up to 305 °F

Specification of

HD-5 LPG

Typical Composition of HD-5

LPG

Ethane 1.4 %. by liquid volume

Propane 90 % min. by liquid volume 96.1 % by liquid volume

Propylene 5 % max. by liquid volume 0.41 % by liquid volume

Butane & heavier HC 2.5 % max. by liquid volume 1.8 % by liquid volume

Sulfur 120 ppm max. by weight 0 ppm max. by weight

36

0

5

10

15

20

25

0 30 60 90 120 150 180 210 240 270 300 330 360

Ga

s R

ate

(e³m

³/d

)

Time

750 mcf/d

Example of LPG Fracture Production

Assuming $ 4.00/mcf

Fluid BlockEffective Fracture Length

Created Fracture Length


Fluid BlockEffective Fracture Length






GAS FLOW



GAS FLOW

GASFRAC‟s LPG Fracturing1,400 mcf/d

37

0

5

10

15

20

25

0 30 60 90 120 150 180 210 240 270 300 330 360

Gas R

ate

(e³m

³/d

)

Time

Incremental Revenue from Zero Flare and Rapid

Clean-Up $57K + $72K = $129K

1,400 mcf/d

Incremental Gas Produced

in first 12 Days $57K

750 mcf/d

Incremental Production From 100%

Effective Frac Length

Accelerated Recover

20% Increased rate over 3 years results

in a NPV of $400K

Flared: $72K in

Lost Revenue

Example of LPG Fracture Production

Incremental Reserves from 100 %


Assuming $ 4.00/mcf

38

Jennings Capital Inc “Even without any incremental recovery of

gas, the present value of the reserves rises by 46%....”

WellSands

CompletedFrac Type Test Date

Flow

DurationTested Rate

Tubing

Pressure

Rate @ 500

psi FTHP

C-48 C, D, E, MBMethanol

WaterOct-08 93 hours

1.4

MMscf/day630

1.4

MMscf/day

J-47 D, E, F, GMethanol


6.8

MMscf/day713

7.1

MMscf/day

K-48 B, C, DMethanol


0.5

MMscf/day586

0.5

MMscf/day

P-47 E, G LPG Aug-09 46 hours2.6

MMscf/day2,702

9 - 10

MMscf/day

L-38 E LPG Aug-09 79 hours2.5

MMscf/day3,536

12 - 13

MMscf/day

McCully Field, New Brunswick, Canada Tight stacked sand application (vertical wells – all one pad)

50 BPM, 13,000 psi fracturing pressure, 70,000 – 145,000 lb proppant


October 2008 Data Reported from: http://www.corridor.ca/media/2008-press-releases/20081028.html

September 09, 2009 Data Reported from :http://www.corridor.ca/media/2009-press-releases/20090909.html 39

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