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© Dan Jarvie. Energy Institute, TCU / Worldwide Geochemistry Fort Worth Business Press meeting June 19, 2008 1
Unconventional Shale Resource Plays:Shale-Gas and Shale-Oil Opportunities©
Daniel M. Jarvie
Energy Institute, Texas Christian University
Worldwide Geochemistry, LLC
© Dan Jarvie. Energy Institute, TCU / Worldwide Geochemistry Fort Worth Business Press meeting June 19, 2008 2
In Honor of “Marvelous” Marvin Gearhart
© Dan Jarvie. Energy Institute, TCU / Worldwide Geochemistry Fort Worth Business Press meeting June 19, 2008 3Dan Jarvie, Worldwide Geochemistry
Unconventional Gas as a portion of total U.S. gas production
© Dan Jarvie. Energy Institute, TCU / Worldwide Geochemistry Fort Worth Business Press meeting June 19, 2008 4
Impact of Barnett Shale Development
• Jackson School of Geosciences, University of Texas:
Royalties of $1.6 MM in 2006• Denton (Texas) Independent School District:
Royalties of $12.1 MM• Energy Institute, TCU
Royalties to follow... soon!
© Dan Jarvie. Energy Institute, TCU / Worldwide Geochemistry Fort Worth Business Press meeting June 19, 2008 5
Market Price Energy-Equivalencyoil vs. gas
© Dan Jarvie. Energy Institute, TCU / Worldwide Geochemistry Fort Worth Business Press meeting June 19, 2008 6
Shale-Gas and Shale-OilResource Plays
1
3
5
678
9
1213
14
17
18
20
19
18
15
21
2
22
23
4
1011
16
24
© Dan Jarvie. Energy Institute, TCU / Worldwide Geochemistry Fort Worth Business Press meeting June 19, 2008 7
Shale Resource System:a self contained petroleum system
SOURCEROCK
BARNETTSHALE
RESERVOIRROCK
SEAL ROCK
GenerationAdsorptionExpulsion
Oil Cracking
Estimate60% of
hydrocarbonsexpelled intoconventional
reservoirs
Jarvie et al., 2003
© Dan Jarvie. Energy Institute, TCU / Worldwide Geochemistry Fort Worth Business Press meeting June 19, 2008 8
Why does Wall Street love Shale-Gas Plays?6000 square mile Barnett Shale Reservoir
© Dan Jarvie. Energy Institute, TCU / Worldwide Geochemistry Fort Worth Business Press meeting June 19, 2008 9
EXAMPLES OF AVERAGE SOURCE POTENTIAL INDICES (SPI)
(tons HC/m2)
1. Junggar (China): 65
2. L. Congo (Cabinda): 46
3. Santa Barbara Channel (U.S.A.): 39
4. San Joaquin (U.S.A.): 38
5. Central Sumatra (Indonesia): 34
6. E. Venezuela fold and thrust belt: 27
7. Offshore Santa Maria (U.S.A): 21
© Dan Jarvie. Energy Institute, TCU / Worldwide Geochemistry Fort Worth Business Press meeting June 19, 2008 10
EXAMPLES OF SPI (cont.)(tons HC/m2)
8. Middle Magdalena (Colombia): 169. North Sea (U.K.): 1510. Central Arabia (S. Arabia): 1411. Niger Delta (Nigeria): 1412. Gulf of Suez (Egypt): 1413. San Joaquin - Eoc./Oligo. (U.S.A.): 1414. Ft. Worth - Barnett (U.S.A.): 13
© Dan Jarvie. Energy Institute, TCU / Worldwide Geochemistry Fort Worth Business Press meeting June 19, 2008 11
Shale Gas Dispenser
A containerfilled withgoodies
Goodies
Barrier
Insert money
Produce 1Goodie
Top Seal/Barrier
Bottom Seal/Barrier
Jarvie, 2005
© Dan Jarvie. Energy Institute, TCU / Worldwide Geochemistry Fort Worth Business Press meeting June 19, 2008 12Dan Jarvie, Worldwide Geochemistry
Shales with a mixture of oil and gasshowing both adsorbed and free pore space hydrocarbons
stored in various little containers
Micro-reservoir compartments in a tight shalehaving free gas (gas in micropores) and adsorbed gas (gas adhering to organic surfaces)
Jarvie, 2005
© Dan Jarvie. Energy Institute, TCU / Worldwide Geochemistry Fort Worth Business Press meeting June 19, 2008 13
Shale in Oil Window
Varioussizes of
moleculesor entities
Methaneand
other gases
Variousparaffins
Resinsand
Asphaltenes“big uglies”
Jarvie, 2005
© Dan Jarvie. Energy Institute, TCU / Worldwide Geochemistry Fort Worth Business Press meeting June 19, 2008 14
30
25
20
15
10
5
Sha
le P
oros
ity (%
)
Shale Pore Diameter (nm)0 5 10 15 20
Largeasphaltenemolecule
Smallasphaltenemolecule
Complexring
structures
n-alkanes
Cyclohexane
Benzene
Methane
Approximate Molecular Diametersof some products in petroleum reservoirs
EffectiveDiameter
Molecule (nm)Water 0.30Methane 0.38Benzene 0.47n-alkanes 0.48Cyclohexane 0.54Complex rings 1-3Asphaltenes 5-10
Molecular Sizes
Is molecular sizethe only factor ?
© Dan Jarvie. Energy Institute, TCU / Worldwide Geochemistry Fort Worth Business Press meeting June 19, 2008 15
Shale in Gas Window
Jarvie, 2005
Mostly methane
Some wet gas and liquid
hydrocarbons
© Dan Jarvie. Energy Institute, TCU / Worldwide Geochemistry Fort Worth Business Press meeting June 19, 2008 16
HistogramHumble Database TOC
-3 -2 -1 0 1 2 3
Freq
uenc
y
0
50
100
150
200
250
300
350
1 100.1TOC (%)
2,000 Marine Shales
© Dan Jarvie. Energy Institute, TCU / Worldwide Geochemistry Fort Worth Business Press meeting June 19, 2008 17
Micro-Reservoir System:Porosity Increase due to Organic Carbon Decomposition
7% by mass14% by vol.
TOC of 7.00 wt. %is 14% vol. %
Assume 35% carbon lossdue to generation
4.90% porosity increase
Jarvie et al., 2007a
© Dan Jarvie. Energy Institute, TCU / Worldwide Geochemistry Fort Worth Business Press meeting June 19, 2008 18
Pores and C-rich Areas: Barnett Shale
Areas of higher TOC
Reed, Loucks, and Jarvie, 2008
© Dan Jarvie. Energy Institute, TCU / Worldwide Geochemistry Fort Worth Business Press meeting June 19, 2008 19
Nanopores in the Barnett Shale
Green dots are10 nm diameter
Reed, Loucks, and Jarvie, 2008
© Dan Jarvie. Energy Institute, TCU / Worldwide Geochemistry Fort Worth Business Press meeting June 19, 2008 20
Schematic of Oil and Gas Generation:why is there more gas at higher thermal maturity?
Organic MatterSecondaryCracking
Oil
WetGas
Dead Carbon
Dry Gas
PrimaryCracking
Biodegradation
© Dan Jarvie. Energy Institute, TCU / Worldwide Geochemistry Fort Worth Business Press meeting June 19, 2008 21
TOC in a Marine ShalePetroleum Source Rock
7.00 wt.% organic carbon
2.50 wt.% 4.50 wt.%
Hydrogen is limiting factor on conversion of organic carbon to hydrocarbons
© Dan Jarvie. Energy Institute, TCU / Worldwide Geochemistry Fort Worth Business Press meeting June 19, 2008 22
Volumes of Oil and GasExpelled and Retained from 2.50% TOC
(at dry gas window thermal maturity)
921 mcf/af256 bo/af(1536 mcfe/af)
+658 mcf/af
Expelled
Retained
© Dan Jarvie. Energy Institute, TCU / Worldwide Geochemistry Fort Worth Business Press meeting June 19, 2008 23
Oil vs. Gas Fairways
© Dan Jarvie. Energy Institute, TCU / Worldwide Geochemistry Fort Worth Business Press meeting June 19, 2008 24
Geologicmaturation
seriesfrom theBarnettShale
Gage #1
Mitcham #1
Lampasas outcrop
Truit #1
Heirs #1 Young #1
Sims #2 Oliver #1
Maturation Trend Line
© Dan Jarvie. Energy Institute, TCU / Worldwide Geochemistry Fort Worth Business Press meeting June 19, 2008 25
Geochemical Assessment of Gas Riskvarious visual and chemical thermal maturity parameters
%VRo [2.2]
Tmax-eq. %VRo [2.2]
TR (%) [100]
500-HIpd [500]
% Dry Gas [100]
% C20- [100]
Shale-Gas Region
Oil Window
© Dan Jarvie. Energy Institute, TCU / Worldwide Geochemistry Fort Worth Business Press meeting June 19, 2008 26
T.P. Sims #2 Wise County, Texas: Geochemical LogWell name:
7630
7640
7650
7660
7670
7680
7690
7700
7710
7720
7730
7740
7750
7760
Depth(ft)2 4 6 8
TOC10 20
S2100 200 300 400 500 600 700 800 900
HI0.4 0.6 0.8 1 1.2 1.4 1.6 1.8 2
CalVRo0.4 0.6 0.8 1 1.2 1.4 1.6 1.8 2
%Ro25 50 75 100
S1/TOC
© Dan Jarvie. Energy Institute, TCU / Worldwide Geochemistry Fort Worth Business Press meeting June 19, 2008 27Part 2 #27
Oryx Grant #1, Montague County Texas: Geochemical LogWell name:
7760
7780
7800
7820
7840
7860
7880
7900
7920
7940
7960
7980
8000
8020
Depth(ft)2 4 6 8
TOC5 10 15 20
S2100 200 300 400 500 600 700 800 900
HI0.4 0.6 0.8 1 1.2 1.4 1.6 1.8 2
CalVRo0.4 0.6 0.8 1 1.2 1.4 1.6 1.8 2
Ro25 50 75 100
S1/TOC
7760
7780
7800
7820
7840
7860
7880
7900
7920
7940
7960
7980
8000
8020
Depth(ft)
© Dan Jarvie. Energy Institute, TCU / Worldwide Geochemistry Fort Worth Business Press meeting June 19, 2008 28
Geochemical Assessment of Gas RiskInterpreted Thermal Maturity
using visual and basic chemical data
TOC (wt.%) [10]
Ro(%) [2]
Tmax-based %VRo [2]TR (%) [100]
Gas Dryness [100]
Green area represents oil window; lines must be outside green area to indicate potentiallyproductive shale gas based strictly on the Barnett Shale gas model from the Ft. Worth Basin.
Gray area represents latest oilwindow – earliest condensate-wetgas window where commercialgas production can be achieveddepending on hydrocarbon composition and depth.
Suggested minimum and “grayarea” values for potential shale gas:
TOC: 2.00% - 3.00%VRo: 1.00% - 1.20%Tmax-VRo: 1.00% - 1.20%TR: 80% - 85%Gas Dryness: 80% - 85%
85%2%
1.20%
1.20%
85%
3%
Jarvie et al., 2007a
T.P. Sims #2
© Dan Jarvie. Energy Institute, TCU / Worldwide Geochemistry Fort Worth Business Press meeting June 19, 2008 29
Geochemical Assessment of Gas RiskInterpreted Thermal Maturity
using visual and basic chemical data
TOC (wt.%) [10]
Ro(%) [2]
Tmax-based %VRo [2]TR (%) [100]
Gas Dryness [100]
Green area represents oil window; lines must be outside green area to indicate potentiallyproductive shale gas based strictly on the Barnett Shale gas model from the Ft. Worth Basin.
Gray area represents latest oilwindow – earliest condensate-wetgas window where commercialgas production can be achieveddepending on hydrocarbon composition and depth.
Suggested minimum and “grayarea” values for potential shale gas:
TOC: 2.00% - 3.00%VRo: 1.00% - 1.20%Tmax-VRo: 1.00% - 1.20%TR: 80% - 85%Gas Dryness: 80% - 85%
85%2%
1.20%
1.20%
85%
3%
Jarvie et al., 2007a
Grant #1
© Dan Jarvie. Energy Institute, TCU / Worldwide Geochemistry Fort Worth Business Press meeting June 19, 2008 30
Geochemical Logs:anomalously high normalized oil contents indicate
pay and by-passed pay
OIL or GAS PRONE ORGANIC MATTER
5000
7000
9000
11000
13000
15000
0 200 400 600 800 1000
HYDROGEN INDEX (HI)
HYDROCARBONPOTENTIAL
5000
7000
9000
11000
13000
15000
0 2 4 6 8 10
OIL POTENTIAL (S2)
Excellent
ORGANIC RICHNESS
5000
7000
9000
11000
13000
15000
0 5 10
TOC (wt.%)
DEP
TH (f
eet)
OrganicRich
NORMALIZED OIL CONTENT
5000
7000
9000
11000
13000
15000
0 50 100 150 200
NORMALIZED OIL CONTENT
Low
mat
urity
or
expe
lled
Gas Oil(mar.)
Mix Oil(lac.)
Oil/
Gas
Pro
duct
ion
or C
onta
min
atio
n
Ear
ly m
atur
e so
urce
roc
k
Mat
ure
stai
ned
sour
ce r
ock
CALCULATED MATURITY5000
7000
9000
11000
13000
15000
0.0 0.5 1.0 1.5 2.0 2.5
CALCULATED %Ro
Oil
Zone
Con
dens
ate
Zone
Dry
Gas
Zon
e
Imm
atur
e
BypassedPay
© Dan Jarvie. Energy Institute, TCU / Worldwide Geochemistry Fort Worth Business Press meeting June 19, 2008 31
Bakken Shale, Middle Member, and Threeforks, High residual oil content in low maturity rock indicates
potential shale-oil production
0.00
5.00
10.00
15.00
20.00
25.00
30.00
0.00 5.00 10.00 15.00 20.00 25.00 30.00
TOC (wt.%)
FREE
OIL
(mg
HC
/g T
OC
)
Low Saturation
Moderate Saturation
High Saturation
Oil Shows/Productive
© Dan Jarvie. Energy Institute, TCU / Worldwide Geochemistry Fort Worth Business Press meeting June 19, 2008 32
0
10
20
30
40
50
0.0
0.2
0.4
0.6
0.81.0
1.2
02
46
810
Activ
ity
HI/(HI+O
I)
TOC
Anoxic ShalesOxic Shales
© Dan Jarvie. Energy Institute, TCU / Worldwide Geochemistry Fort Worth Business Press meeting June 19, 2008 33
HistogramHumble Database TOC
-3 -2 -1 0 1 2 3
Freq
uenc
y
0
50
100
150
200
250
300
350
1 100.1TOC (%)
Oxic Marine ShalesLow Activity
HI/OI < 3 Anoxic Marine ShalesHigh Activity
HI/OI > 3
© Dan Jarvie. Energy Institute, TCU / Worldwide Geochemistry Fort Worth Business Press meeting June 19, 2008 34
Geochemical Risk Parameters
TOC (wt%) [0-10]
%Ro [0.2-2.2]
Tmax (C) [390-550]
TR [0-100]
Gas Dryness [0-100]
100 - Normalized oil content [0-100]
© Dan Jarvie. Energy Institute, TCU / Worldwide Geochemistry Fort Worth Business Press meeting June 19, 2008 35
Geological Risk Assessment
Gas in Basin? [Yes-No]
Gamma Ray [0-200]
Resistivity [0-200]
Shale Thickness [0-500]
20,000 ft. - Depth to Shale [0-20000]
Seals/Barriers Present? [Yes-No]
Sands Present ? [Yes-No]
Infrastructure ? [Yes-No]
© Dan Jarvie. Energy Institute, TCU / Worldwide Geochemistry Fort Worth Business Press meeting June 19, 2008 36
Petrophysical-Mineralogical Risk
Permeability (nD) [0-500]
Porosity (%) [0-10]
Silica % [0-100]
Carbonate % [0-100]
100 - Shale % [0-100]
Clay Water Sensitivty [Yes-No]
50 - Water-Filled Porosity (%) [0-50]
20 - Oil-Filled Porosity (%) [0-20]
Gas Filled Porosity (%) [0-100]
Condensate only? [Yes-No]
© Dan Jarvie. Energy Institute, TCU / Worldwide Geochemistry Fort Worth Business Press meeting June 19, 2008 37
GIP and EUR Assessments
Gas Content (scf/ton) [0-300]
Free Gas % [0-100]
Adsorbed Gas % [0-100]
GIP from Gas Content [0-300]EUR at 20% GIP [0-100]
GIP from TOC [0-300]
EUR at 20% TOC GIP [0-100]
© Dan Jarvie. Energy Institute, TCU / Worldwide Geochemistry Fort Worth Business Press meeting June 19, 2008 38
Thank you for your participation.Peace be with you !
Barnett Shale outcrop
San Saba