tight gas chap1

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HALLIBURTON: TIGHT GAS

Halliburton is ready to build on our long-standing partnership and to

continue adding value to your assets. You are a strategic customer operating

in the worlds most important reservoirs. Our partnership provides an

excellent opportunity to do what we do best, providing efficient and

superior-quality solutions and services that maximize the value of your

tight-gas assets.

I am proud of the work Halliburton has done with its customers around

the world to enable their tight-gas assets to achieve their full potential.

We would welcome the opportunity to develop your tight-gas assets.

Optimal tight-gas development requires analysis on a basin-wide scale.

Using the available geological, geophysical and engineering data, we will

develop a detailed understanding of the unique geology, stratigraphy,mineralogy, petrophysics and reservoir engineering in each basin.

This information will allow us to develop accurate drilling and completion

practices that will enable us to determine the full potential of these resources,

as well as the best strategies to recover the gas from your asset to realize

this potential. Our Technical Excellence Centers, the best equipped and

staffed in the world, are fully designed to develop tight-gas solutions.

Most importantly, our partnership will result in the environmentally

friendly development of tight-gas resources.

I will personally see to it that Halliburton delivers the right innovations,

expertise, and technological solutions needed to develop your tight-gas

assets and maximize gas production.

To Our Highly Valued Partner


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Table of Contents

Introduction by Dave Lesar

Chapter I Introduction

Chapter II Health, Safety, Environment and Operational Excellence

Chapter III Holistic System Approach*

Chapter IV Current and Future Solutions*

Chapter V Case History Solutions*

Chapter VI Conclusions

Chapter VII References and Intellectual Capital*

A. Awards

B. PapersC. Patents

*Sections Addressing Tight Gas Challenges

Early and Rapid Well/Field Development

Reducing Nonproductive Time and Cost

Drill to Maximize Production

Finding the Sweetspot in the Reservoir

Testing the Tight-Gas Well

Managing the Borehole


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CHAPTER I

INTRODUCTION


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Introduction

According to 2008 BP Worldwide

Statistics, world natural-gas consumption

rose by 3.1% in 2007, and in North America,

gas consumption rose by 5.2% (39.5 BCM),

the strongest growth in 18 years. In 2008,

worldwide consumption exceeded 2007

levels. The primary reason for these

increases is easy to understand. Although

crude oil has a higher carbon and energy

content per unit volume, natural gas is

considered a cleaner fuel whose exploitation

has less environmental impact.

Halliburton has contributed

significantly to natural-gas

exploitation since 1919. As the

difficulty of finding and developing assets

has increased, Halliburton has been the

leader in making unprofitable, difficult-to-

develop gas assets profitable, over time. Our

focus in asset development is to consider

each well as part of a portfolio of assets, rather than targeting a single interval or formation. This approach results in more efficient

and optimized planning that allows us to maximize profitability.

Conventional gas resources are depleting and are becoming increasingly difficult to replace (find and produce). As a result, operators

are being forced to place greater reliance on unconventional gas resources to meet residential, industrial and transportation energy

needs. Unconventional gas resources include coalbed methane, shale gas and low-permeability tight-gas sandstones and diatomites.

These reservoirs are complex and often difficult to produce. Shale gas and coalbed methane are sourced and stored in the same forma-

tions whereas tight-gas sandstones are merely repositories for gas sourced elsewhere. The one feature common to these diverse re-sources is very low matrix permeability. This low permeability may be the product of either (a) the extremely small size of the mineral

and organic material comprising these formations or (b) the result of diagenetic changes and authigentic clays that have reduced the

original primary porosity. Some of these resources are naturally fractured, but all require artificial stimulation to connect existing

natural fractures and induce new ones, typically through hydraulic fracturing. Also, increased or enhanced reservoir exposure, through

horizontal drilling, multilaterals, multistage fracturing, or a combination, is needed to make the wells economic, i.e., profitable.


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The following table summarizes the worldwide location of unconventional gas resources by region.

Coalbed Methane Shale Gas Tight-Gas TotalSandstones

Region Tcf Tcf Tcf Tcf

North America 3,017 3,840 1,370 8,228

Latin America 39 2,116 1,293 3,448

Western Europe 157 509 353 1,019Central and Eastern Europe 118 39 78 235

Former Soviet Union 3,957 627 901 5,485

Middle East and North Africa 0 2,547 823 3,370

Sub-Saharan Africa 39 274 784 1,097

Centrally Planned Asia and China 1,215 3,526 353 5,094

Pacific OECD 470 2,312 705 3,487

Other Asia Pacific 0 313 549 862

South Asia 39 0 196 235

World 9,051 16,103 7,406 32,560

Holditch, S.A. 2006. Tight-Gas Sands, Journal of Petroleum Technology, 58(6): 86-93.

Holditch defines a tight-gas reservoir as a reservoir that cannot be produced at economic flow rates nor recover economic volumes

of natural gas unless the well is stimulated by a large hydraulic fracture treatment or produced by use of a horizontal wellbore or

multilateral wellbores. Typical tight-gas reservoirs have matrix porosities of 10% or less and permeabilities below 1.0 md and

produce dry gas. In the U.S., the legal definition is 0.1 md or less. The ultra-tight gas formations now being developed (e.g.,

U.S. Rocky Mountain basins) have permeabilities in the micro- (0.001 md) and nanodarcy range. Production declines in tight-gas

wells average 67% in the first year and are often fully depleted within four or five years. However, the continual need to replace the

gas supply means that well and reservoir production must be continually optimized throughout their producing lives, usually

through horizontal drilling and stimulation techniques. As such, a restimulation, recompletion, sidetrack, or MLT completion

may take place even near the wells end of life.

Tight-gas reservoirs share a number of characteristics, but these may not all be present in a single resource play:

Lithology - Generally sandstones with varying amounts of clay, shale, iron and other mineralogies



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Ultimate recovery - Recovery over the long term can turn

an initially non-economic well into a profitable well.

Drive mechanism - Fluid drive defined by Darcys law.

Reserves and production evaluation - Because of high

variability in reservoir characteristics, offset-well produc-

tion is an important component in high-average-low well

comparisons to determine total asset performance.

Drilling and completion costs - Rapid and efficient

drilling and completion methods are necessary to

maintain gas output and minimize cost. The key drilling

challenge is to reach the optimum sweetspot while

minimizing nonproductive time.

Well density - Compared to conventional reservoirs,

tight-gas wells generally have smaller drainage areas

and lower initial and cumulative production.

Consequently, tight-gas development requires more

wells and substructure to produce the same amount of gas.

Environmental impact - Similar to conventional development, this involves minimizing the drilling and production footprint,

as well as ensuring that drilling fluids and produced water meet local and national environmental regulations.

Although unconventional gas resources are widespread worldwide, outside of North America they have generally not received close

attention from natural gas operators and development has been limited (NPC, 2007). This is due, in part to (a) the scarcity of the

information available on these resources, (b) unfavorable natural-gas policies and market conditions in many countries, and (c) to a

chronic shortage of expertise in the specific technologies needed to successfully develop these resources. This situation is changing as

more countries focus on unconventional and tight-gas resources to replace depleted conventional resources in the energy mix and to

improve their national economies.

Recent attention on tight-gas reservoirs outside of North America includes low-permeability gas reservoirs that dont fall under the

conventional definition of tight gas. These reservoirs, termed complex gas reservoirs (Fig. 1), have permeability values ranging

between 1.0 md and 0.1 md and contain retrograde gas-condensate. These reservoirs can be shallow or deep and can be normally-to-

abnormally pressured. Like conventional tight-gas reservoirs, complex-gas reservoirs are challenging to develop and may require

artificial stimulation. When developing a complex-gas asset, i.e., low-permeability, retrograde gas-condensate reservoir, accurately

predicting and assuring well deliverability are of paramount importance. These tasks are more challenging than in traditional tight-

gas reservoirs because the potential for condensate development around the well in the near-wellbore region may adversely affect

development opportunities unless preventive steps are taken. In these cases, a holistic approach that includes formation testing,

Conventional Gas MilliDarcy Range (>10)

Fluid type varies

Rock type varies

Tight Gas

Micro Darcy Range

Dry GasWet Gas

Sandstone

Shale Gas Nano Darcy Range

Dry GasWet Gas

Shale (Type IIV)

CBM

Flow mostly trough fractures (cleats)

Dry Gas

Coal

Complex Gas

Retrograde Gas with High Dew Point

Milli Darcy Range (Relatively low permeability ~1 mD or less)

Sandstone

MatrixPermeabilityIncreases

Uncon

ventional

Conventiona

l

Fig. 1. Spectrum showing the range of conventional and unconventionalgas resources.


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classifying near- and long-term actions, including drilling, completion, stimulation, and production practices, for strategic f ield

development. While offset wells may provide essential information that can be directly applied to the planned wells, the useof reservoir analogs from other fields or geologic basins should be avoided unless, or until the geologic and petrophysical

similarities can be established. Similarly, lessons learned from previous experiences and the development of similar or

reservoir analogs may be helpful, but it shouldnt be assumed that they are directly applicable. To do so before determining

that they are appropriate to the reservoirs in question may result in poor well and field performance.

The service company helping to develop these assets must have a deep understanding of the reservoir, as well as the creative

minds (R&D) needed to develop the right solutions for the particular asset from the very basics. No single technology will

determine the success or failure in a particular t ight-gas reservoir. Rather, development in these reservoirs is like a pyramid

where many individual solutions are combined and work together at different levels to create a total solution.

Halliburton strongly believes that the first step toward the efficient development and management of tight-gas resources is

developing a detailed understanding of the basic geology and engineering characteristics from a basin-wide perspective.

Rapid changes in lithology, porosity and permeability are typical in unconventional reservoirs and an entire field cannot be

developed using identical methods, nor can other fields within the basin be treated similarly. Tight-gas resource development

means applying the most appropriate available technologies to a unique set of reservoir geological conditions and engineering

requirements to achieve the optimum production and best rate of return for individual wells and entire fields. Halliburtons

long experience and success in developing tight-gas resources has made it the leader in this market. The following global

map shows where Halliburton is currently working to develop tight-gas resources worldwide.

Chapter I discusses the rationale behind this report and its organization. Chapter II describes the strong foundation of Health,

Safety and Environment and Operational Excellence that is applied during the entire life of the asset. Chapter III describes a

logical sequence of individual and integrated tight-gas solutions that can be combined to create a complete, holistic solution to

achieve optimum results in specific reservoirs and fields. Chapter IV summarizes individual technological solutions that improveeconomic results. These solutions represent the ideas of many dedicated and talented researchers and engineers. Chapter V

presents summaries of case histories that describe the practical application of a variety of the drilling and completion solutions

covered in Chapter IV. Chapter VI summarizes the overall message of this document. In Chapter VII Halliburton showcases its

solid foundation of technological advancements that have benefited individual customers and the entire industry through se-

lected listings of industry awards, published technical papers, and granted patents. A patent is an indicator of the uniqueness of a

specific technology to industry, while the awards presented to Halliburton are recognition of the value and significance operators

and industry have placed on specific technological solutions. Technical papers address the challenges in reservoir exploitationand present new methods and innovations that have been used to overcome these challenges.

This report, representing the collaboration between Halliburton and its customers, focuses on the challenges and

solutions used to develop basin-centered tight-gas resources. Chapters II, IV and V address these challenges in more detail.

These challenges include:


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Managing the Borehole

Well Integrity for Maximum Long-Term Production

Stimulation Planning and Optimization

Production Optimization

Efficiency Processing

Expertise that Delivers the Tight-Gas Asset

Tight-gas reservoirs must be addressed starting with the basics including HSE and Operational Excellence, building up to a

total solution. A single document cannot address every potential issue and challenge that you might face. If you do not find

specific answers to your tight-gas questions, please contact your local Halliburton representative to discuss your particular

challenges, so that we may address them directly. The following diagram communicates Halliburtons message

COLLABORATION + TECHNOLOGY = SOLUTION. Nothing can be created without it. Working together as partners is essential to

achieving success in developing unconventional tight-gas resources.

Reference: National Petroleum Council, 2007. Facing the Hard Truths about Energy, Topic Paper No. 29, Unconventional Gas, 54 p.

http://www.npc.org/Study_Topic_Papers/29-TTG-Unconventional-Gas.pdf


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