Hydraulic Fracturing Overview

Kevin Heffernan
President
April 22, 2015
The Oil & Gas Industry is Always Changing

1858 – first oil well – Oil Springs,

Ontario
1883 – first gas well in western
Canada at Medicine Hat
1949 – first commercial hydraulic
fracturing operation at Velma,
Oklahoma
1980’s – commercial application of
horizontal drilling begins
1998 – first application of horizontal
slickwater fracturing (Texas)

April 22, 2015

What Makes an Unconventional Reservoir ?

Unconventional Reservoirs Conventional Reservoirs

Conventional
Tight Gas Sand Natural Gas Reservoirs

Shale Limestone Natural Gas from Coal

Extremely Tight Very Tight Tight Low Moderate High

0.0001 0.001 0.01 0.1 1.0 10.0 100.0

Permeability (mD)

Increasing Requirement for Hydraulic Fracturing

Sidewalk
Granite Volcanic Pumice
Concrete

modified from US DOE

Note: Natural Gas from Coal reservoirs are classified as unconventional due to type of gas storage

April 22, 2015

What is Hydraulic Fracturing?

• From a geological perspective there are a number of stresses (or

pressures) in the subsurface that affect the ability of rock to fracture

• Principle of hydraulic fracturing is to create enough pressure on the

rock in the subsurface to overcome those stresses and create
fractures

• The new fractures become flow paths that connect the reservoir rock
to the wellbore

Hydraulic fracturing is the process of transmitting sufficient

pressure by fluid or gas to cause existing fractures to open or new
fractures to be created deep in the subsurface

April 22, 2015

Hydraulic Fracturing

• Segments of the horizontal well can be isolated and treated individually

• Create “reservoir” in rock not otherwise of sufficient quality to produce

April 22, 2015

Hydraulic Fracturing

• Pressure is applied by
pumping fluid down the well

• When pumping stops, the

fracture(s) stops growing and
pressure in the reservoir forces
fluid up the well to surface
(flowback)

• Once production begins,

reservoir pressure falls and gas
or liquid flows in the fractures
toward the well

April 22, 2015

Hydraulic Fracturing

Groundwater Protection

• Proper well construction is

critical for groundwater
protection

• Regulations require isolation

of useable groundwater and
saline groundwater and
hydrocarbon zones

• Isolation requires installing

multiple layers of steel
casing and cement during
well construction to ensure
wellbore integrity

April 22, 2015

Hydraulic Fracturing
Fracturing Fluids
• Although the most common fluid used is water, in some cases,
nitrogen, propane, oil or CO2 are used, sometimes blended with
water.
• Proppant materials are sand or ceramic beads that can be
carried in the fluid and withstand reservoir pressures to hold
the fracture open
• Where necessary, minor amounts of chemicals are added to
the fluid to
– control bacteria
– improve capacity to transport proppant
– minimize reactions between the fluid and the rock
– make the fluid slippery

• Volumes of fluid and proppant, as well as pressures, are

monitored and controlled onsite

April 22, 2015

 Hydraulic Fracturing

• The volume of fracture fluid used is dependent on the size of frac

treatment, length of the well, and reservoir characteristics, as well as the
number of fractures (stages) planned for the wellbore

• Disclosure of additives used is now required in Alberta and British

Columbia (www.fracfocus.ca)

April 22, 2015

Fluid Volumes

• The volume of fluid used can vary greatly

from place to place and reservoir to reservoir
– Montney (Alberta, BC) 4,000 – 16,000 m3 (gas, oil)
– Horn River (BC) 35,000 – 135,000 m3 (gas)
– Duvernay (Alberta) 10,000 – 70,000 m3 (gas)
– Cardium (Alberta) 0 – 4,000 m3 (oil)
– Bakken (Saskatchewan) 0 – 3,000 m3 (oil)

Inside a chemicals van at a fracturing

… there is no global rule of thumb – different operation

regional geological characteristics and different

operator preferences can result in significant
variation

• Water sources vary but in most regions

surface water is the dominant supply

Blender at hydraulic fracturing operation

Source: Schlumberger, ConocoPhillips

April 22, 2015

Fracture Mapping Observations

Maximum known depth of aquifer

Maximum depth of groundwater

Maximum vertical growth of hydraulic fracture

April 22, 2015

 Flowback and Produced Water

• Flowback volumes can vary greatly, but are often 10% to 50% of the frac fluid
volume

• Produced water management varies depending on the stage of the operation –

typically tanks or c-rings then to disposal wells

• Water treatment, re-use, and recycling options increase as operations move to

commercial development

Trends include
- Development of “green” additives
- Salt tolerant chemicals to allow increased re-
use of flowback and produced water
- Deep saline aquifers for source water
- Industrial and community waste water
- Development of less water intensive fluids
- Regional water management planning –
supply, transport, storage and disposal

April 22, 2015

Development Evolution
Pace of development depends on many
factors:
Stage 1: Stage 2:
Identification of Early Evaluation - Resource complexity, technical
Resource Drilling results, local conditions, markets,
Stage 3: capital competition, etc.
Geology,
Pilot Project Drilling
seismic,
acquisition of
oil and gas
rights Stage 4:
Pilot Production
Testing
Typically vertical
drilling to obtain core Stage 5:
samples for reservoir Commercial Development
properties and related
investigations. May
include additional
seismic Evaluate well Testing and modeling
performance, of production or
continue reservoir reservoir performance,
testing to determine refine fracturing
engineering approaches, do
properties development planning

Project
Reclamation

April 22, 2015

Multi-well pads

• Fewer wells are producing more gas in British Columbia

• Multiple horizontal wells drilled from a single surface location
further reduces the surface footprint of development
• Reduces habitat fragmentation- fewer roads and field pipelines
• Reduces truck traffic
• Reduced risk of spills and accidents
• Enables re-use and recycling of fluids

Conventional development Unconventional development

Source: BC OGC, Oil and

Gas Land Use in British
Columbia, August 2013

April 22, 2015

Multi-well pads

Disturbance peaks during

drilling and fracturing
operations

During production
operations surface leases
are partially reclaimed

At the end of production

operations all
disturbances are
reclaimed

Source: Encana

April 22, 2015

Trends

• Regional groundwater investigations in Alberta and British Columbia

are supporting improved long term planning for water supply,
addressing both surface and deep saline groundwater opportunities

• Through the Canadian Association of Petroleum Producers (CAPP)

operators have adopted a set of principles and operating practices
for shale gas development and hydraulic fracturing (www.capp.ca)

• The Petroleum Services Association of Canada (PSAC), which

includes the service companies that undertake hydraulic fracturing
has released a statement of principles addressing health, safety,
environmental protection, continuous improvement, and respect for
communities (www.psac.ca)

April 22, 2015

Reclamation

Wetland construction on a lease during reclamation

Source: ConocoPhillips Canada

Thank You For Your Attention!

www.csur.com