Unconventional vs Conventional Reservoirs

By Skip Peel, Independent Landman

Major and mid-major energy companies have shifted their onshore exploration focus heavily to unconventional reservoirs over the last couple of decades.  Historically hydrocarbons had been almost exclusively produced from conventional reservoirs where the properties of a formation (reservoir rock) allowed the migration of hydrocarbons over extended distances to a well bore. 

Discussions of the ability of a formation to allow that migration primarily include two properties, porosity and permeability.  Porosity is the space between the grains of rock.  The larger the pore space, the more hydrocarbon the rock can hold. Permeability is the measure of how connected those pores are one to the other throughout the formation.  The better the connection, the more efficiently the hydrocarbon can flow through the formation over distance to a well bore.  Conventional reservoirs have been successfully developed for one hundred years with vertical wells because of good porosity and permeability.  Advancing technology (3D seismic, horizontal drilling and hydraulic fracture stimulation) now make it possible to produce hydrocarbons from unconventional reservoirs (source rock) that does not exhibit high degrees of porosity and permeability.  Hydrocarbons cannot flow to a well bore by natural means in an unconventional reservoir.  They are locked into the formation (low permeability) incapable of flowing over distance without the creation of artificial fractures to connect the reservoir to a well bore.

Much of the exploration and production that is discussed on GHS falls into the unconventional reservoir category.  Indeed the website came into being because Keith's family was offered a lease in the early days of the emerging Haynesville Shale Play and he could not find any useful information through a search of the Internet.  His response to their need to know was the creation of GoHaynesvilleShale.com.  The general characteristic of an unconventional reservoir most pertinent to this blog is the fact that they are somewhat uniform in productive viability over large areas. 

Conventional reservoirs are accumulations of hydrocarbons that have migrated to an area where they are trapped and therefore are not generally productive over a wide expanse but are discrete, separate productive areas of limited size.  For energy companies, an unconventional reservoir offers the possibility of repeatable productivity over a wide area that lends itself to economies of scale in development.  In other words, low risk of dry holes with the opportunity to leverage operational efficiencies to drive down the cost to produce an mcf (one thousand cubic feet) of natural gas, a barrel of Natural Gas Liquids (NGLs)/condensate or a barrel of oil.  Articles on the subject of unconventional reservoirs often use the analogy that development is more akin to manufacturing models than to traditional exploration and production of conventional reservoirs.

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