'Sideways' Takes An Ensemble

The title of a 2004 popular movie could also apply to a new challenge in downhole geology.

It was called "Sideways."

While that movie had a lot to do with wine tasting, today's challenge involves a potential bottleneck for horizontal drilling.

Resource plays have uncorked an abundance of drilling opportunities in the United States, and almost all of them involve horizontal development.

An up-and-down understanding of formation, structure and reservoir isn't enough anymore.

Now the geologist has to be aware of geology along the lateral.

"Let's kick this up a notch."

Jack (Thomas Haden Church), "Sideways"

Southwestern Energy Co. opened up the Fayetteville Shale play in 2004. According to its third-quarter release, the company now has pushed production to more than 600 million cubic feet a day.

As of Sept. 30, Southwestern had drilled and completed 722 operated wells in an eight-county area of the Arkoma Basin in Arkansas – 652 of them horizontal wells.

Average per-well initial production has jumped to 2.88 million cubic feet a day, up from 1.26 million in the first quarter of 2007, thanks in part to longer laterals.

Southwestern said its typical Fayetteville Shale horizontal well now is drilled with a lateral of more than 3,700 feet, at a completed cost of $3 million. 

A good grasp of downhole geology is key to the play, said AAPG member Alan Clemens, vice president and chief geoscientist for Southwestern Energy in Houston.

"We need good geological control to help land these horizontal wells and steer them through the formation," he said. "We have an interval we like to stay in – it seems to have fewer drilling problems."

Clemens said the lateral ideally will stay in a 30-to-60-foot interval within the productive shale.

The vertical depth range for the Fayetteville Shale is 1,500-6,500 feet.

The geologist must understand the formation geology well enough to steer the well while coping with challenges that include structural complexity.

"One of the big things we've learned in this area is that there is more structural complexity than we originally thought," Clemens noted.

Data from a downhole tool supports the lateral drilling process.

"There is a gamma tool we use that is located behind the drill bit," he said. "What we can do with that tool is correlate the gamma with a vertical well nearby to tell us where we think we are in that formation."

But the gamma tool might sit 30-50 feet behind the drillbit, so the geologist has to be aware of the actual position of the bit while drilling through the formation, he added.

For a better look at formation structure and setting, Southwestern has increased its use of 3-D seismic. That gives a much clearer picture than 2-D, which might have a spacing of two or three miles between lines, Clemens said.

"Ooo – jumpin' at the bit, huh?"

Stephanie (Sandra Oh), "Sideways"

Geologists also benefit from a close look at formation characteristics. According to Clemens, the company drills an exploratory well completely through a target formation, then pulls and analyzes cores.

The cores provide information about rock properties. In other areas where rock properties already are known, a vertical pilot well is drilled for structural information.

Compare that to the approach used by Equitable Resources Inc. in the Appalachian Basin, where it's pursuing a tight Berea sands play.

"We start with our structure maps. We have good control in these areas – we've drilled a lot of wells out here," said AAPG member Jim Pancake, senior geologist for Equitable Production Co. in Pittsburgh.

Pancake also is president of the Pittsburgh Association of Petroleum Geologists, host society for AAPG's Eastern Section meeting earlier this year.

His company works primarily in southern West Virginia and eastern Kentucky. It expects to drill 25 to 30 Berea wells in 2008.

Each well costs $1.4-$1.5 million and has a first-month flow rate of about 1.5 million cubic feet per day. Equitable estimated it could have another 3,800 drilling locations in the play.

Overall, the company plans to drill more than 375 horizontal wells in 2008. It primarily drills those in the Lower Huron Shale and, increasingly, the Marcellus Shale.

Shales in the area boost the chances for good production in tight-sands development.

"These tight sands mostly lie within organic-rich black shales, so there's good source rock," Pancake said.

Equitable brought horizontal drilling to the area in 2006, according to AAPG member Mike Canich, the company's vice president-geosciences. Its first horizontal well cost $4.7 million. Now, with experience, it can drill horizontals for less than a third that amount, he noted.

Like Southwestern Energy, it tries to have the best possible grasp of setting, structure and formation before horizontal drilling starts.

The company, Canich said, has "done a fair amount of hole core work as well as sidewall corning."

"And it's constantly evolving and gaining complexity."

Maya (Virginia Madsen), "Sideways"

In Equitable's play areas, formations are typically dry and fairly shallow – 3,000-4,000 feet. To tackle the low-pressure Lower Huron/Devonian, the company developed its own air drilling techniques.

"One challenge we do have out here with air drilling is that we don't have the measurement while drilling tools," Canich said.

Geological insight contributes to another important piece of information: knowing what stimulation techniques are best for improving production.

In the Fayetteville play, Southwestern began by using cross-linked gel fracs, slickwater fracs or some combination of the two. After improving and refining its approach, it now employs only slickwater fracs in the shale, using them on all 97 wells it completed in the third quarter of this year.

For Equitable, conditions dictate nitrogen or nitrogen foam fracs for stimulation, Canich said.

The company applies seven to nine frac stages for a typical lateral of 3,700 feet.

In low-permeability plays, having natural fractures present – and understanding their nature and orientation – will improve the odds for favorable production.

"You do have to have a handle on whether you have fractures," Canich said. "Here, we aren't afraid of faults like some folks are in the Barnett, for example."

Also, the tight-sands zones "take longer to drill than the shales, just because of the nature of the rocks," Pancake noted. "They're harder, so it's slower drilling.

"We've had some mysteries. We drill these areas where we find that the bit wants to drop, or the bit wants to rise," he added.

But in general, using well control and building a good geologic model before beginning horizontal drilling pays handsome dividends.

"We do a little bit of exploration with the drillbit. For the most part, it's not a lot of mystery. The structure varies a little with some of these wells, but nothing significant," Pancake observed.

In both shales and tight sands, steering a lateral effectively will reduce problems in drilling and completion. Those include drifting and deviation that can compound helical buckling or "corkscrewing," and unwanted "porpoising" that can create drag.

To imagine porpoising, think of the up-and-down path of a porpoise as it moves across the top of the water.

"If a geologist oversteers, going up and down more than necessary, you get that porpoising," Clemens said.

Shale plays in general are moving to longer laterals, and Southwestern's Fayetteville laterals are now about 80 percent longer than they were early last year. Clemens said there is a natural hesitation when drilling long laterals in a new play.

"Part of it is a drilling issue," he said. "When you come into a new area, you don't want to get too far out with the laterals.

"It's also been an evolution of our completion techniques," he added.

"You have to keep your eyes open. That's all."

Miles (Paul Giamatti), "Sideways"

A good knowledge of formation geology contributes heavily to completion success and to making decisions about stimulation. Critical issues include the nature of the shale – silica and clay content, etc. – and the presence and type of natural fractures.

"We have a lot of discussion that goes on about whether there's a better place to land the drilling within the formation to give you better completions," Clemens said.

A frustration in cookie-cutter horizontal drilling is that no two of the cookies seem to be alike. The same approach can produce a different outcome on a different well.

"We'll see variable results when it looks like we've landed the well in the exact same spot as an offset well," Clemens noted.

His aim is to reduce geologic risk and shave costs in the ongoing shale play, where small percentage savings will add up to impressive results.

"We're investing over $1 billion dollars a year in this project. Any savings we can capture in one well, multiplied over the thousands of wells which will be drilled in this play, can make a significant difference," he observed.

Because understanding the geology is so important, Southwestern keeps a group of geologists on the ground in the Fayetteville play.

"We actually have a staff of geologists in the Arkansas region," he said. "They do all the field work and coordinate with the geologists in Houston."

Asked about his biggest challenge in the operation, Clemens didn't hesitate.

"One of the biggest challenges has been hiring and maintaining a quality staff. We have an outstanding group of people here and we're always looking for more," he said.

But with a limited amount of experience, expertise and specialized knowledge available, "everybody wants the same people," he noted.

"And the award for Outstanding Performance by a Cast in a Motion Picture goes to ... "Sideways."

Screen Actors Guild Awards

More than a comedy or a road movie, "Sideways" was a brilliant ensemble effort.

Clearly, according to all who participate in this game, drilling a successful horizontal well requires an ensemble of talents, too.

Understanding downhole geology gives the petroleum geologist an essential role.