Abstract

In the oil and gas industry, shale has overcome its stigma as an odd unconventional hydrocarbon reservoir to become one of the most sought-after resource plays in North America. Spurred by development of the Barnett Shale in the Fort Worth Basin, U.S. drilling and exploration for this unique play type is at an all time high at year-end 2006. Recent shale specific consortia, workshops, symposia and conferences reflect this increased emphasis on shale plays. Shale-gas plays have emerged as commercially viable and encouraging exploration is ongoing in many basins in North America.

Hydrocarbon production from shale-gas systems has a long and important history in North America. The first commercial U.S. natural gas production (1821) came from organic-rich Devonian shale in the Appalachian basin. The first commercial U.S. oil production from shale (1862) came from the Upper Cretaceous Pierre Shale in Colorado. Both plays are still producing today.

With the recent growth of shale-gas plays, defining and classifying shale reservoirs has become increasingly complex. Including both gas and oil productive systems and expanding the definition to include fine-grained source rocks creates a more encompassing taxonomy. Shale-gas systems are generally unconventional, self-sourced, continuous-type accumulations (biogenic, thermogenic or combined biogenic-thermogenic gas accumulations). The principal shale-gas plays are characterized by widespread gas saturation, subtle trapping mechanisms, seals of variable lithology and enhanced permeability due to natural fractures and/or variable interbedded lithology. It now is commonly accepted that gas is stored in shale-gas reservoirs in a variety of ways including in natural fractures and intergranular porosity as free gas, sorbed onto kerogen and possibly dissolved in bitumen. Shale-oil systems can also be continuous-type accumulations, characterized by widespread oil saturation, subtle trapping mechanisms, primary permeability from natural fractures and interbedded lithologies and seals of variable lithology. Shale oil reservoirs are typically a dual porosity system where oil is primarily stored in the natural fracture network and intergranular porosity.

Natural gas production from the five principal shale plays has increased 151% from 2000 to 2006. These plays include Devonian Ohio Shale of the Appalachian Basin, Devonian Antrim Shale of the Michigan Basin, Devonian New Albany Shale in the Illinois Basin, Mississippian Barnett Shale in the Fort Worth Basin, and Cretaceous Lewis Shale in the San Juan Basin. The great majority of this increase has been in the Barnett Shale. The other principal plays have increased slightly or declined. These plays are being used as analogs for exploration and development in other basins. At year-end 2005, a new shale-gas play, the Fayetteville Shale, has emerged in the Arkansas portion of the Arkoma Basin and is proving to be commercially viable and potentially very large. Production is beginning to be established in several other plays such as the Baxter Shale in the Greater Green River Basin and the Woodford Shale in southeastern Oklahoma. Numerous other shale plays in the pilot stage are being worked to establish production.

New technologies have played a critical role in expanding industrys understanding of shale-gas plays and unlocking their potential. These technologies include advances in hydraulic fracturing, horizontal drilling and reservoir characterization. Operators and service companies have adapted, modified and created new approaches to exploration and development of shale reservoirs through innovation and trial and error.

In the established shale-gas plays, approximately 38,000 shale-gas wells produced an estimated 1.0 Tcf of gas at year-end 2006. Cumulative natural gas production has exceeded 8.7 Tcf from 1979 to 2006 from these plays. The estimated technically recoverable resource ranges from 53 to 114 Tcf.