Oil & Gas Pro

Shale Gas Production Growth Rates (3/5/10)

Attached is a chart that shows a comparison of the production growth rates for three major shale gas plays from a common starting point of 200 MMcfd (million cubic feet per day).  As can be seen each shale play has a more rapid production growth rate than the earlier shale gas play.  This is because operators learn from previous developments and can ramp production at a faster pace.

 

I have also attached a chart that shows the combined increase in shale gas procustion from these three plays over the last 9+ years.

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Permalink Reply by Parkdota on March 7, 2010 at 6:05
Wow, that's pretty profound. The chart definitely speaks to the HA "peak" theory lol, and just think....the growth is basically on just HBP with a portion of those being choked back.

Oil & Gas ProPermalink Reply by Skip Peel - Mineral Consultant on March 7, 2010 at 6:30
I would like to see the graphs when they include the Eagleford and the Marcellus. Shale, Shale, everywhere we look Shale! A short list of the lesser known U.S. Shales;

Bend, Cane Creek, Caney, Chimney Rock, Cleveland, Clinton, Cody, Ellsworth, Excello, Floyd/Neal, Alabama, Gothic, Green River, Hovenweep, Huron, Lewis, Manning, McClure, Monterey, Moorefield, Mowry, Niobrara, Ohio, Percha, Pierre, Queenston, Rhinestreet and Sunbury.

Oil & Gas ProPermalink Reply by Les Bamburg on March 7, 2010 at 8:09
Skip, just to clarify and avoid confusion there are literally hundreds of shale formations but only a few that have the potential to be economically productive. Remember that one of the key elements is for the hydrocarbon generated within a shale formation to be still retained within the shale. In many of the shale formations the majority of the generated hydrocarbons escaped to permeable sandstone or limestone formations and were the source of our historic conventional oil and gas production.

The handfull of shale plays shown to be economic to date include the Devonian, Antrim, New Albany, Barnett, Fayetteville, Woodford, Cana, Haynesville, Marcellus, Bossier, Eagle Ford, Bakken, Horn River, Montney and Utica.

Oil & Gas ProPermalink Reply by Skip Peel - Mineral Consultant on March 7, 2010 at 8:19
Yes, Les, I am well aware that shale is everywhere and not all will be productive, Those that I listed come from a well respected energy research and publishing company. And represent those shales of which I suspect GHS members have not heard.
Permalink Reply by Parkdota on March 7, 2010 at 10:27
Skip &/or Les, would it be safe to bet that since prices are supressed that the shale that provides the bigger bang for the buck like the HA will be developed more quickly not taking in to account HBP? I'm assuming that since all the productive shales have to have HBP then prices will stay supressed for some time and the shales that are developed 1st will be the ones that can still turn a profit at lower prices like the HA. I know it is very costly to drill the HA but since the production is so high it is one of the more profitable shales, right?

Oil & Gas ProPermalink Reply by Skip Peel - Mineral Consultant on March 7, 2010 at 10:37
Les may have a handle on F&D costs for the other shale plays, I do not. I doubt there is sufficient data for a number of them. Many of the other plays are not as deep as the HA and are therefore cheaper in one sense to drill. The Marcellus is shallower but it's also in challenging terrain (mountains, not flat lands) and does not have reliable and readily available sources of fresh water for frac operation. The HA is "over pressured" making it more productive in that sense than other plays. Some shales like the Bakken are oil plays and will benefit from better prices for oil than gas. At some point the lease frenzy has got to slow down and when that point is reached the equation will be total number of prospective acres under lease and the time until expiration of those lease terms. As long as leasing continues, drilling to hold leases must follow. It's a dynamic that will keep nat gas prices depressed until we find ways to use more gas.

Oil & Gas ProPermalink Reply by Les Bamburg on March 7, 2010 at 13:07
Skip, I believe the leasing frenzy has already slowed down as most of the major independents have built sufficient inventory in the known major US plays.

Oil & Gas ProPermalink Reply by Skip Peel - Mineral Consultant on March 7, 2010 at 13:22
Les. You could never tell that by reading GoMarcellusShale.com. LOL!

Oil & Gas ProPermalink Reply by Les Bamburg on March 7, 2010 at 13:03
Parkdota, all the shale gas plays are profitable at today's prices and it will continue to be other conventional and unconventional gas plays that are impacted by the lower gas prices. Many factors influence the rate of development for each of the major shale gas plays. The Marcellus Shale may be the most economic due to its higher netback gas price and F&D (finding & development) cost but limited existing infrastructure and water issues will slow the pace of development. It is debatable whether the Barnett Shale, Haynesville Shale, Fayetteville Shale or Eagle Ford Shale have the best economics.

landownerPermalink Reply by sesport on March 7, 2010 at 11:13
Help, please. I tried to look up the definition "procustion" as it relates here and I ended up with this, lol ...

http://www.whiskyportal.com/links/alldk.asp

Skip, you left out the EIEI Ohhhh Shale, I think, but will probably stand corrected. Appreciate the clarification, Les. Wouldn't be good if everyone started to conflate their shales.

On a serious note, at some point will that production growth rate level off? And even though the Haynesville growth rate benefits from the Barnette & Fayetteville experiences & knowledge, is the steep incline of the H. production warranted?

thanks 80)

Oil & Gas ProPermalink Reply by Les Bamburg on March 7, 2010 at 12:53
Sesport, the incline in the Haynesville Shale production growth should continue for another 2-3 years and then slow but it may be several more years before the rate flattens. The steep incline is warranted in the early years to offset declines in several of the traditional producing basins.

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