IBP2199_12 THE USE OF CONVENTIONAL INFORMATION AND THE NEED OF NEW DATA TO CONSTRUCT AN UNCONVENTIONAL RESERVOIR MODEL lvaro

Snchez de Bustamante1, Marina Lema2, Lucas Gonzlez3

Copyright 2012, Brazilian Petroleum, Gas and Biofuels Institute - IBP

This Technical Paper was prepared for presentation at the Rio Oi & Gas Expo and Conference 2012, held between September, 1720, 2012, in Rio de Janeiro. This Technical Paper was selected for presentation by the Technical Committee of the event according to the information contained in the final paper submitted by the author(s). The organizers are not supposed to translate or correct the submitted papers. The material as it is presented, does not necessarily represent Brazilian Petroleum, Gas and Biofuels Institute opinion, or that of its Members or Representatives. Authors consent to the publication of this Technical Paper in the Rio Oil & Gas Expo and Conference 2012 Proceedings.

Abstract
The need to evaluate shale type resources is increasing in fields that have produced from conventional reservoirs. This is usually approached by means of the reinterpretation of previously acquired information and the intervention of existing wells. In this aspect, the main problem with available data is related to the fact that most of them were not acquired to evaluate the potential of a shale play, and are thus not adequate for this objective. On the other hand, when considering making the most of existing information and equipment, it is often supposed that savings can be of magnitude. Because non conventional reservoirs require non conventional hydraulic fracturing operations, implying high rates and hence high treatment pressures, wells that were not drilled with unconventional objectives do not meet technical specifications. To illustrate the presented problem, cases from three different fields in Argentina were analyzed, two from Neuquina basin and one from Austral basin, were the need to evaluate shale prospects arised. Existing log and core information was reviewed and evaluation with unconventional approach was performed, aiming at the definition of shale plays. In order to take advantage of existing wells, the three cases were studied and similar results were obtained. Inadequate casing specifications and wellheads, together with weakening of tubulars due to aging were found. Based on obtained results, for each case the most useful set of data was defined from existing information, and a set of additional necessary data for the correct definition of the play was compiled. Results point to the inadequacy of existing data to characterize correctly the unconventional plays in the cases analyzed.

1. Introduction
The increasing interest in the exploitation of hydrocarbons present in source rocks of different petroleum systems is related to the coming out of a series of questions, regarding the validity and relevance of earlier acquired information for evaluation of the new objectives. This situation is present frequently in fields with a mature "conventional" exploitation, where it is presently necessary to assess the productive potential of the source rock in a broad sense. This is usually approached by means of the reinterpretation of previously acquired information and the intervention of existing wells, drilled and completed during conventional development stage. The scope of this paper is, in the first place, to review the main features that define a shale play in the context of its characterization and evaluation, and the information that must necessarily be available for analysis and integration. Secondly, to discuss the feasibility of re using field data recorded during stage of conventional reservoirs development. Finally, to analyze the main difficulties related to the use of conventionally designed boreholes, borehole equipment and completions to evaluate productive potential of source rocks.

2. The concept of shale play

______________________________ 1 Geologist - WEATHERFORD 2 Geologist - WEATHERFORD 3 Petroleum Engineer - WEATHERFORD

Rio Oil & Gas Expo and Conference 2012 Unconventional reservoirs comprise a broad spectrum of lithologies and genetic conditions, sharing one main feature: extremely low permeability (Hartman and Laughrey, 2011). Other authors define unconventional gas reservoirs as those having a sorbed gas component, which is a consequence of the rock composition and structure: the presence of clays and organic matter results in gas adsorption on particles surface. This criterion thus excludes tight gas sands from unconventional systems (Sondergeld et al., 2010). Among these, shale reservoirs present an organic content of up to 50% and pore sizes in the range from nanometers to micrometers (Sondergeld et al., 2010). In a general sense, exploitation of a shale play involves the extraction of hydrocarbons directly from the source rock of a petroleum system. From a geological point of view, high potential formations include organic rich shales of a highly variable composition, usually deposited in low energy marine environments where anoxic conditions prevail, either permanently or episodically (Hartman and Laughrey, 2011). These conditions allow for the preservation of organic matter produced in a context of high biological activity. Thermal history and expulsion history must have been favorable to generation, and to present some level of inefficiency, having given the opportunity for oil cracking in the case of gas bearing rocks. As a consequence of their origin, these source rocks present very low to null permeabilities, resulting in nonexistent fluid flow form formation to the well. In this context, the concept of hydrocarbon trap, as one main objective of analysis and delimitation in conventional reservoirs development, is no longer applicable, since the hydrocarbons are now located in the source rock (in a general sense), having not migrated and resulted trapped in a remote reservoir. Conceptually, these systems present stratigraphic, petrophysical and reservoir dynamic properties that require the application of an unconventional view for study and understanding. 2.1. Pertinent variables to characterize a shale play A set of relevant variables must be taken into account when dealing with a shale project, beyond environmental constrains on operation and technological challenges. These variables can be grouped into four categories: Critical, Important, Significant and Manageable. Figure 1 shows this clearly.

Figure 1. Critical factors (From King, 2010) Under these categories there are more detailed levels of relevance, since some of the variables are mandatory to define the presence or absence of a shale play (organic richness, lithology, maturation history, amongst others), and others define the magnitude of the resource (permeability, presence of naturally fractured areas, hydrocarbon in place). In any case, the complete list must be analyzed to globally assess the play and to guide the onset of development. Figure 2 lists most of them, where they are measured and the cut off values.

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Figure 2. Variables and cut offs (From Sondergeld et al., 2010) This set of variables and geological and petrophysical models, filtered by their limits, determine the existence of possible areas of high probability of development of shale or sweet spots" and the conditions for their development (type of completion, fracturing, etc.). The analysis of critical variables requires, as in the case of conventional reservoirs, that both core data and log data are acquired. Figures 3 and 4 show the studies recommended in cores and basic and ideal logs to run, respectively.

Figure 3. Recommended studies in cores

Figure 4. Recommended logs to run

3. Limitations of Existing Information

The main issue regarding information is related to the fact that most of the previously existing data were not acquired to evaluate the potential of a shale play, and are thus not adequate for this objective. In the first place, operational planning is crucial in the process of core extraction, given the mandatory need to preserve the sample as close to the original conditions as possible. On the other hand, in addition to basic studies (porosity, permeability, 3

Rio Oil & Gas Expo and Conference 2012 mineralogy, amongst others), it is necessary to perform a whole set of specific measurements: total organic content (TOC), description and orientation of fractures, adsorption isotherms, elastic properties, amongst other important variables. Moreover, the usual case for conventional fields is that laboratory related samples are obtained from reservoir intervals and not very commonly from source rock intervals. Regarding well logs, their importance lies not in classical variables determination (porosity, water saturation Sw, permeability), but in the understanding of lithology, fracture design and mechanical properties. They are also relevant for application of unconventional methods that allow for the estimation of necessary critical variables and for core-log calibration, to obtain consistent models. The difference in approach between the two situations is well exemplified in Figure 5.

Figure 5. Conventional and unconventional approaches (From Fulks, 2010)

4. Mechanical Limitations of the facilities

Hydraulic fracturing is used to stimulate production rates of hydrocarbons by increasing the exposed surface area of geological formations, allowing greater flow of the reserves into the well bore. The necessity of hydraulic fracturing has progressively increased as production rates on new wells continue to decline. In fact, most experts now project at least 90 percent of all future wells in North America will require some degree of fracturing to increase production results, with the majority of these operations occurring in shale gas formations. As demand for hydrocarbons increases, hydraulic fracturing will continue to be essential to meet the energy requirements around the world. When considering making the most of existing information and equipment, it is often supposed that savings can be of magnitude. Nevertheless, in most cases savings only add value to subsurface analysis, since non conventional reservoirs require non conventional hydraulic fracturing operations. Completions and multizone fracturing operations in Shale are complex undertakings so completions were accomplished in fewer days using the 24 hour approach, but efficiencies and safety suffered. These operators chose to adopt an integrated services approach where one service company provided the majority of equipment and personnel on completion jobs to achieve both fewer days per completion and high KPI (Key Performance Indicator) efficiency. Effectively managing hydraulic fracturing projects become even more complex when multiple service providers and suppliers are required to work in a coordinated sequential fashion. These imply high rates, which give as a result high treatment pressures. For this reason, wells that were not drilled with unconventional objectives do not meet technical specifications. The shale requires large fleets of high pressure hydraulic fracturing equipment to effectively complete a multistage stimulation in zones composed largely of calcareous mudstone. In order to take advantage of existing wells, the three cases were studied and similar results were obtained. Inadequate casing specifications (weight, steel quality, tool joints, and others), wellheads (working pressure, steel quality) were found. Finally, and very relevant, the natural weaken of tubulars with aging. In addition to the fracturing fleet numerous service providers are also involved in the completion process. The service providers on site at a multistage completion include at a minimum hydraulic fracturing, cased-hole wireline, composite frac plugs, perforation guns, cranes, lubricators, pressure testing and frac flowback, frac tank providers, fuel trucks, water services, sand/proppant trucks, coiled tubing, tubing conveyed perforation and micro-seismic companies. Figure 6 shows the fracturing costs alone rose from 35% of overall AFE (Authorization for Expenditure) to nearly 45% of well cost. The primary reasons for the increased costs were longer laterals, increased stage count and higher proppant pricing. 4

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Figure 6. AFE Cost Analysis for Eagle Ford wells in 2011(from Fulks, 2011) The most common mechanical limitations in conventional wells to use as unconventional wells: 1. Well head an casing specifications to handle large amount of frac materials (million gallons water & million pounds of proppants) and large amount of pump horsepower (30,000 to 40,000 horsepower)-. 2. Near wellbore flow restrictions that reduce flow rates by up to 50 percent 3. Degradation of fracture conductivity on all wells due to plugging 4. Screenouts and flowback problems 5. Difficulty in initiating fracs in with cemented casing 6. Downhole equipment failures 7. ID restriction in casing and liner production to bring into play unconventional tools.

5. Cases study
To illustrate the presented problem, cases from three different fields were analyzed, two from Neuquen basin and one from Austral basin. For every field, geology was studied, and original exploratory or development approach was analyzed, including target formations and type of reservoirs. Existing log and core information was reviewed. Subsequently, evaluation with unconventional approach was performed, aiming at the definition of shale plays. Methodology applied included, amongst other estimations, TOC calculation (based on available data), elastic constants calculation (Poisson, Young and brittleness), lithofacies and the use of deterministic and probabilistic petrophysical methods. Based on obtained results, for each case the most useful set of data was defined from existing information, and a set of additional necessary data for the correct definition of the play was compiled. Results point to the inadequacy of existing data to characterize correctly the unconventional plays in the cases analyzed. The use of the existing includes the study of the conditions of the facilities at the well. Figure 7 summarizes the data analyzed in each of the next examples.

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Figure 7. Analyzed parameters Furthermore, the methodology used was similar in all cases, though with obvious differences according to the geological and petrophysical characteristics of each case. Figure 8 shows the general sequence:
Methodology Loading of Logs, Gases, Calcimetry, etc. Editing and Depth Matching TOC from logs (Eissler Method) Poissons, Youngs and Brittlenesss Estimation Multimineral Model and Lithofacies DeltaLogR (Passey Method) Predicction of Fluids using Chromatografic Relations (Garca et al, 2011) Limitations Leak of geochemical data, cores and dipolar sonic to calibrate calculated parameters

Figure 8. General approach Case 1 Neuquina basin Agrio Formation. The goal of the analysis was to establish the factibility of evaluation for a shale prospect in Agrio Formation, using an existing well previously perforated with a conventional objective. Agrio Formation is one of the source rocks on Neuquen basin. It presents favorable conditions in different productive districts of Northwest Neuquen and Southern Mendoza. The termal maturity is marginal to moderate, with a type II kerogen, having generated intermediate to light oils (Legarreta et al., 2008). Figure 9 summarizes the status of available information. Variables in black letters are available, those in yellow case can be calculated, and those in red those that cannot be estimated.

Critical Variables
Lithology Porosity Permeability GIP Brittleness / Answer to hydraulic fracture TOC Water Content Gas Storage Capacity

Information Needed
Core Petrophysics Geomechanics Test Mud Logging Core Geochemistry Complet Suite of Logs Logs-Cores Calibration

Figure 9. Information status for case 1 Following the methodology discussed above, the critical parameters were estimated as possible and we obtained the results shown below in Figure 10. To reinforce the assessments made, were fed into the plots the results of the completions and workovers, in order to analyze the coincidence or not, with the results observed in previous tests. It should be noted that it was very good, because in general where the method showed any interest, tests either had resulted dry or with water, and where it was interesting, the intervals coincided with recovered fluids. 6

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Figure 10. Evaluation results for case 1 Preliminary design was made considering fracture mechanical property values representative of the area. For a proper design of hydraulic fracturing is necessary to have physically measured values and / or estimated from profiles. The well had a liner 5 " preventing doing fractures carry high flows by casing. Three alternatives were presented Completion: Selective: tubing of 2 7/8, PKR permanent and frac sleeve. Individual for each zone: tubing of 2 7/8, PKR permanent. Tie back liner to surface and Then Plug & Perf. Recommendations for case 1were the following: Registration of Dipolar Sonic to adjust geomechanical parameters of the well. Critical Parameters Calibration (TOC, Porosity, Permeability etc.) with cores New evaluation of intervals and fracture design based on adjusted parameters Case 2 Neuquina basin Vaca Muerta Formation In this situation, the objective was to re-assess the design of an intervention to the well and to confirm the correct placement of fractures to evaluate the productive potential of Vaca Muerta Formation in the most adequate intervals. Vaca Muerta Formation is the most prolific source rock of Neuquina basin. It comprises marine marls and shales deposited in platform environments, and show a broad areal distribution. The organic content is high, and it has generated both oil and gas, depending on the sector and termal maturation history (see, as a reference, the synthesis of Cruz et al. (2002) and Villar et al. (2005)). Figure 11 summarizes existing information for case 2 and the data lacking, as in the previous case.

Critical Variables
Lithology Porosity Permeability GIP Brittleness / Answer to hydraulic fracture TOC Water Content Gas Storage Capacity

Information Needed
Core Petrophysics Geomechanics Test Mud Logging Core Geochemistry Complet Suite of Logs Logs-Cores Calibration

Figure 11. Information status for case 2

Rio Oil & Gas Expo and Conference 2012 As in the first example, the critical parameters were estimated as possible and we obtained the results shown below in Figure 12. In this case, levels to fracture were ploted, in order to analyze whether the results agreed favorably with the levels proposed. In Figure 12 are plotted the interest levels in the second track from the left, in green. The evaluation clearly shows that the top level meets all the critical values to attempt the operation successfully, while the lower, although it has some of its parameters within acceptable limits, it has not enough fragility of the rock, because a clear increase in clay content, which becomes highly doubtful success.

Figure 12. Evaluation results for case 2 Case 3 Austral basin Magallanes Formation In this case, the objective was to analyze available information to define if it was possible to consider a shale prospect and to evaluate its productive potential. The interval of interest comprises Magallanes Formation, with over 2500 m of thickness of fine sandstones, siltsotnes and shales with calcareous and coal intercalations. These lithologies were deposited in litoral and marine environments associated to a deltaic progradation during the Pelocene (Arbe, 1989). Figure 13 summarizes the status of information for case 3.

Critical Variables
Lithology Porosity Permeability GIP Brittleness / Answer to hydraulic fracture TOC Water Content Gas Storage Capacity

Information Needed
Core Petrophysics Geomechanics Test Mud Logging Core Geochemistry Full Suite of Logs Logs-Cores Calibration

Figure 13. Information status for case 3 The results of evaluation are shown in figures 14 and 15. Here it can be seen that some of the levels with positive results have already been tested for fluids, coinciding with expected results, and others have not yet been investigated, which in this case opens up additional possibilities. Levels without interest, match with no entrance or water.

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Figure 14. Evaluation results - Lower Magallanes Fm.

Figure 15. Evaluation results Upper Magallanes Fm. The reference well, was analyzed from the mechanical viewpoint, in order to WO doing to perform a recompletion, trying to achieve other goals of the well, which allow the production of gas from formations Tight. The well had several disadvantages with respect to mechanical installation: Casing production of 5 1/2: Besides cleaning up the bottom hole, auxiliary cementing must be done to seal the existing perforations, which increases the non-productive time and potential loss tightness, poor cementing. One of the major drawbacks is the inability to evaluate the potential production of each of the layers of interest. Based on experience, the proposed drilling is conducting a pilot vertical well to evaluate to production potential, leaving the possibility to development in horizontal well to permit production from multiple zones simultaneously.-

6. Conclusions
It can be stated that, in a general sense, the savings in resources and operations are limited when attempting to 9

Rio Oil & Gas Expo and Conference 2012 evaluate a shale play by means of previously existing wells. In most cases, it is possible only to approximate a shale evaluation, due to the following main reasons: the data sets are usually incomplete and there is no calibration of logs to cores, and the mechanical status of the wells is not adequate to the operational needs of these evaluations. Nevertheless, a first unconventional evaluation, with limited available data, might be useful to make the first preliminary estimates of the possibilities for a shale play in the area, considering that this stage will not provide productivity data, for which it will be necessary to construct new wells.

7. References
ARBE, H. A. Estratigrafa, discontinuidades y evolucin sedimentaria del cretcico en la Cuenca Austral, provincia de Santa Cruz. In Chebli, G. y Spalletti, L. (eds): Cuencas sedimentarias argentinas, Universidad Nacional de Tucumn, serie Correlacin Geolgica, 419-442, Tucumn, Argentina, 1989 CRUZ, C. E., BOLL, A., GOMEZ OMIL, R., MARTINEZ, E. A., ARREGUI, C., GULISANO, C., LAFFITTE, G. A., VILLAR, H. J. Hbitat de hidrocarburos y sistemas de carga Los Molles y Vaca Muerta en el sector central de la Cuenca Neuquina, Argentina. V Congreso de exploracin y desarrollo de hidrocarburos, Mar del Plata, Argentina, 2002 FULKS, R., Shale overview , Weatherford internal report, San Antonio, Texas, EE UU, 2010 FULKS, R., SMYTHE, S.. A New Approach To Fracturing And Completion Operations In The Eagle Ford Shale. SPE 152874, 2011 GARCIA, R., PRESTIA, M. G., MALIZIA, D. C. Deteccin de reservorios no convencionales (sweet spot) en Vaca Muerta / Quintuco a travs de geoqumica de superficie y perfiles electromagnticos IEH. VIII Congreso de Exploracin y Desarrollo de Hidrocarburos, Mar del Plata, Argentina, 2011 HARTMAN, C., LAUGHREY, C. Shale gas reservoir assessment. Course manual. VIII Congreso de exploracin y desarrollo de hidrocarburos. Mar del Plata, Argentina. IAPG, 2011. KING, G. E. Thirty Years of Gas Shale Fracturing: What Have We Learned? Apache Corporation, SPE Completions and Production Study Group, SPE 133456, 2010 LEGARRETA, L., VILLAR, H. J., CRUZ, C. E., LAFFITTE, G. A., VARADE, R. Revisin integrada de los sistemas generadores, estilos de migracin-entrampamiento y volumetra de hidrocarburos en los distritos productivos de la Cuenca Neuquina, Argentina. In Simposio Sistemas Petroleros de las Cuencas Andinas, VII Congreso de exploracin y desarrollo de hidrocarburos, Mar del Plata, Argentina, 2008 SONDERGELD, C. H., NEWSHAM, K. E., COMISKY, J. T., RICE, M. C., RAI, C. S. Petrophysical considerations in evaluating and producing shale gas resources. SPE 131768, SPE Unconventional Gas Conference, Pittsburgh, Pennsylvania, USA, 2010 VILLAR, H. J., LEGARRETA, L., CRUZ, C. E., LAFFITTE, G. A., VERGANI, G. Los cinco sistemas petroleros coexistentes en el sector sudeste de la Cuenca Neuquina: definicin geoqumica y comparacin a lo largo de una transecta de 150 km. VI Congreso de exploracin y desarrollo de hidrocarburos, Mar del Plata, Argentina, 2005

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