By KATHY SHIRLEY
EXPLORER Correspondent

Geologists Should Demonstrate Value

Unorthodox Plays Can Muddy Roles

Exploiting the Exploration Mentality

Kent Bowker, co-chairman of the Unconventional Gas technical session at the AAPG Annual Meeting and a lead geologist for Mitchell Energy when Mitchell pioneered the Barnett Shale gas play in the late 1990s, said the most important ingredient geologists bring to continuous-type gas accumulations is their innate ability to think outside the box.

"I made it a priority to learn all I could about the engineering aspects of the project -- geologists have to have a working knowledge of those elements to be effective," Bowker said. "But mostly I did what all good geologists do, asking 'what if' and pushing the status quo. I tried to bring the explorationists' way of thinking to an exploitation effort."

According to Bowker, the most difficult task in developing a shale play is usually not discovering it.

"The primary difficulty is determining an economic technique to develop the play," he said. "The geologist's role is critical to this effort, not so much because of what he knows, but because of the way he thinks."

Geologists should familiarize themselves with drilling techniques, completion methods, reservoir engineering, etc., as these relate to the special challenges of a shale reservoir, he suggested.

"Armed with some working knowledge of these subjects, the geologist can then encourage engineering teammates to develop and attempt exploitation techniques that they may have otherwise overlooked," he said. "The goal is to get everyone on the team thinking out of the box during the exploitation phase of the project.

"It can be overwhelming for geologists when engineers are running an entire project," Bowker added. "When I came into the Barnett Shale it looked like the geologist's role was just going to be signing off on requests for AFEs. I just jumped in and wasn't afraid to start throwing around ideas.

"It is a brave new world out there. It will be up to geologists to define their role in these continuous-type gas plays."

-- KATHY SHIRLEY

The role of geology is fairly well-defined in conventional oil and gas plays, but emerging unconventional gas plays have muddied the waters.

In what is often perceived as an engineering play, the question is raised: In continuous-type gas plays, what is the role of the geologist?

The short answer, according to two geologists who presented a paper on the topic at the annual meeting in Dallas, sounds a lot like "carpe diem."

It is up to geologists to carve out their responsibilities and prove how geology can economically impact these plays, according to Jeffrey Levine, a consulting geologist in Richardson, Texas, and Creties Jenkins, with DeGolyer and MacNaughton in Dallas.

"Since controls on production rates are reasonably well established for conventional gas production, we pretty much know what to look for and what to measure," Jenkins said. "However, with unconventional continuous reservoirs it may require years before productive potential is fully realized.

"As a result, geologists too often end up working from a defensive position regarding his or her contribution," he added, "and all too often with insufficient data to back them up."

Also, these unconventional reservoirs are often geologically complex, leaving geologists with multiple working hypotheses regarding controls on production.

"Management sometimes regards this as being indecisive, which puts us in a very difficult position," he said. "I have worked on projects where managers cynically perceive geologists as problem finders rather than problem solvers.

"This is unfair, but rather than complain we need to be able to clearly show the importance of an accurate, thorough geological analysis," he said.

The two contend that finding and exploiting continuous-type gas accumulations requires the simultaneous application of accurate geological interpretations and effective engineering technology.

As they wrote in a paper presented at the AAPG Annual Meeting in Dallas:

"That link is well established in conventional gas systems where reservoirs are localized features with discrete boundaries. Continuous-type gas accumulations, however, are regional in extent and lack obvious seals or traps.

As a result, the geological factors controlling gas-in-place and production rates can be difficult to identify and quantify. This can lead to the erroneous assumption that the reservoir is too complicated to characterize, or that heterogeneities are uniformly distributed and, therefore, can be approximated with simple models.

"Even worse is the assumption that these reservoirs are 'statistical plays,' which allows companies to rationalize and justify their lack of knowledge regarding reservoir geology."

As a result of these assumptions, many companies emphasize engineering and minimize geology in exploration and development of continuous-type gas accumulations.

"To change this, geologists must do a better job of defining their responsibilities," Jenkins said, "demonstrating why geological knowledge is so important and delivering recommendations that will have a favorable impact on the bottom line."

Barriers to Success

Continuous-type gas accumulations are reservoir systems where gas-bearing strata extend over much larger stratigraphic thicknesses and lateral distances than conventional gas reservoirs. These accumulations include coal gas, shale gas and tight sandstones.

The gas resource in continuous-type accumulations is distributed more or less continuously through the reservoir, although the reservoir quality can be highly variable, both in terms of the resource's density and deliverability.

Levine and Jenkins say that experience in the United States and elsewhere shows that economic gas rates from sorbed gas reservoirs require a favorable combination of reservoir properties, which tends to occur only over a small portion of the entire basin.

"The San Juan and Black Warrior basin coal gas plays and the Michigan Basin shale gas play provide notable examples of narrowly constrained, geologically controlled production fairways which have provided most of the gas production," Levine said. "The challenge facing geoscientists is to identify these trends as early as possible and to work with engineering staff to appraise and develop them efficiently."

Levine said there are a number of reasons why geologists tend to play a secondary role in assessing and developing continuous-type gas accumulations.

"Even if a project manager acknowledges there are geologic questions concerning a play, they may expect an algorithm or standardized form to determine those answers," he said. "We need to recognize, however, that we are still very much on a learning curve for this type of reservoir, and that every prospect presents a unique combination of variables.

"There has to be an element of faith that spending money early in the project to collect basic geologic data will make it possible for geologists to draw inferences and see relationships that will be important down the road."

In many cases geologists have not done an adequate job of generating answers that challenge the status quo and confront misperceptions, both men say -- so companies often move forward with minimal geological support and make decisions based primarily on short-term economics.

"Just as often good geological work is disregarded because companies are entrenched in a culture that makes decisions based on non-geologic issues," they said. These issues include:

Financial pressures.

"Managers understandably hesitate to burden projects with the up-front costs of coring, logging, testing and analysis," Levine said. "This reluctance to spend money is often shortsighted as the benefits can be realized many times in the appraisal, pilot and development stages."

Focus on engineering technology.

Successful development of continuous-type gas accumulations over the past 30 years has been made possible by development of novel engineering technologies. As a result, engineering has taken the dominant role in many projects. But engineering technologies can only affect the near well bore region while production rates and reserves depend mainly on the quality and distribution of reservoir properties in the interwell areas, Levine and Jenkins said.

Geologists must seek the same kind of support for tackling geological problems as engineers receive to overcome drilling and completion issues, they added.

Statistical play syndrome.

Unconventional gas developments typically require hundreds of wells, often on close spacings. The variation in production rates between adjacent wells can be greater than those of conventional gas accumulations due to subtle changes in lithogies, fracturing and well completion effectiveness. Often companies conclude that these variations are "statistical," meaning they are unpredictable and their distribution can only be known by drilling up the entire reservoir at development spacing.

Complexity of sedimentary organic matter.

Sedimentary organic matter plays a critical role in the storage, diffusivity and permeability of sorbed gas reservoirs, which includes coal and shale gas, but "despite its importance, expertise in the sampling, processing, analysis and interpretation of organic matter remains a geological specialty that is not widely held," Levine said.

The Answer Is ...

So what is the legitimate role of geologists in these continuous-type gas accumulations?

Levine and Jenkins agree that first and foremost geologists can:

• Help reduce risk by anticipating trends in reservoir quality.
• Provide data for optimizing drilling and completion, remediation of production-related problems, reservoir simulation and economic modeling.
• Accurately assess the distribution of gas in place and improve the accuracy of reserve estimates, target stratigraphic intervals for completion or recompletion and determine optimal well spacing.
• Be critical in guiding project expansion and acquisition.

But geologists have to carve out their place in the development of these unconventional gas plays; challenging the perception that geology isn't important is just one part of the hurdle. Often geologists completely unfamiliar with coals or shales are asked work these plays, but they don't have sufficient background.

"It is intimidating and difficult to be thrust into this type of situation and be expected to provide answers on something you aren't familiar with," Levine said. "So, education is the first critical step for any geologist asked to work continuous-type gas accumulations."

"I am relatively new to unconventional gas," Jenkins added. "I started working these plays in 1997, and the first thing I did was read papers and contact key people with experience in the field. I knew it was up to me to learn as much as I could so I could be an important part of the process."