Improving Unconventional Resource Assessments

Abstract

The assessments of unconventional resources in the United States made from 2009 to 2012 shaped both industry and popular perceptions of national resource potential. The perceptions that they created have proved to serve both the industry and the public poorly. The three major flaws of these assessments were (1) ignoring wide spatial variations in standardized well productivity within plays, (2) ignoring the great spatial variations in the consequent cost of production within plays, and (3) minimizing the impact of substantial changes in drilling and completion practices in reducing costs and increasing well productivity. Since 2012, several proposals have been made within the resource assessment community to create assessment approaches that better capture basic characteristics of unconventional plays and thus overcome these obvious flaws. This presentation outlines these proposals and illustrates them by means of a simplified assessment of a 10,000 square mile dry shale gas megaplay (30TCF+ ultimate recovery). These proposals embody three general steps: (1) They begin by delineating areas within plays that have diffferent distributions of standarized well productivity, thereby creating subplays within the play. These subplays boundaries are also correlated with spatial differences in the geologic controls that drive well productivity. (2) They calculate costs of production for each subplay based on standarized drilling and completion costs applied to the distribution of well productivity for each subplay, thereby creating a resource cost curve for each subplay. Aggregating the subplay resource costs creates a resource cost curve for the entire play. (3) Finally, they consider explicitly how major changes in drilling and completion costs (25-50% reductions) and improved recovery from better completions (25-50% increases) changes subplay and play resource cost curves, increasing both total recovery and reducing the cost of recovery. Following such an approach should make unconventional resource assessment more relevant for acreage acquisition decisions, drilling decisions (both whether and where), and projecting future production potential at different price levels.

AAPG Datapages/Search and Discovery Article #90259 ©2016 AAPG Annual Convention and Exhibition, Calgary, Alberta, Canada, June 19-22, 2016