A Look at the West Virginia University Assessment of Technically Recoverable Gas in the Utica Shale
July 21, 2015
Last week, members of the media breathlessly reported—based on a new study published by West Virginia University (WVU) entitled A Geologic Play Book for Utica Shale Appalachian Basin Exploration—that the Utica Shale could hold more recoverable gas than the Marcellus, the largest shale gas play in the country. The “Play Book” provides an interesting roundup of geological data on the Utica and associated shale units. However the sensational claim that these units contain a mean resource of 782 tcf (trillion cubic feet) of “technically recoverable” gas, 1947% higher than the USGS estimate of 38.2 tcf made in 2012, has little credibility.
Of course, one can get any “technically recoverable” resource number one wants, depending on input assumptions. Critical assumptions for the gas estimate are:
- Area assigned to sweet spots and non-sweet spots.
- Drainage area of individual wells.
- Estimated Ultimate Recovery (EUR) of wells.
- Success ratio of wells.
Typically these are expressed as a range. In the case of the USGS assessment they are characterized as “minimum”, “mode”, “maximum” and “mean”, and in the WVU assessment variably, when they are stated, as “minimum, medium, maximum” and “minimum, mode, maximum”.
Given that “sweet spots” comprise 99% of WVU’s purported technically recoverable resources, only the sweet spot assumptions are reviewed below in a comparison between the USGS and WVU assessments.
Area assigned to sweet spots
Whereas the USGS assessment provides a quantitative estimate of prospective area, the WVU assessment provides only a map, with a much larger proportion of the total area assigned to “sweet spots” than the USGS.
|(Units are Acres)||Minimum||Mode||Maximum||Mean|
|USGS Total Area||25,800,000||31,600,000||37,400,000||21,600,000|
|USGS Sweet Spot Proportion||0.09||0.21||0.50||0.27|
|USGS Sweet Spot Area||2,322,000||6,636,000||18,700,000||5,832,000|
|WVU Assessment||Not stated (map only)|
Drainage area of individual wells
The USGS assessment provides estimates of well drainage area which allows the calculation of the number of wells required (a mean of about 4.3 wells per square mile). The WVU assessment provides no information on its assumptions.
|(Units are Acres)||Minimum||Mode||Maximum||Mean|
|USGS Drainage area per well||120||150||180||150|
|WVU Assessment||Not stated|
Estimated Ultimate Recovery (EUR) of wells
For the oil part of the WVU assessment, WVU at least provides some cumulative recovery curves to back up its oil EUR calculations. For the gas assessment the WVU assessment provides nothing more than a map of cumulative recovery of wells drilled to date, none of which have recovered more than 5 bcf (billion cubic feet) and most of which have recovered considerably less than 2 bcf. The WVU then assumes every successful well will have a “medium” expectation of recovering 7 bcf over the entire area it calls a “sweet spot”, and a “maximum” expectation of 30 bcf (25 times the USGS “maximum” estimate). Although there are certainly a few very good wells, this is wildly optimistic and unfounded based on production data to date. The comparison with the USGS is as follows:
|(Units are billion cubic feet)||Minimum||Mode||Maximum||Mean|
Success ratio of wells
Similarly the WVU assessment is optimistic on the success ratio of wells compared to the USGS:
|(Units are percent successful)||Minimum||Mode||Maximum||Mean|
The WVU assessment of technically recoverable resources in the Utica is incomplete as presented and wildly optimistic compared to the earlier USGS assessment and compared to likely well performance. Although the WVU report does provide a valuable roundup of pertinent geological data, its assessment of technically recoverable resources should not be viewed as credible.
Drilling rig image via shutterstock.
The USGS was caught out to some extent when new technologies arrived, and they revised their 2002 estimate of about 2 TCF to become 84 TCF in the Marcellus.
So the same thing is happening in the Utica apparently, new well results utilizing state of the art technology, and utilizing actual GEOLOGY to an extent far beyond even what the USGS has been including with their assessments over the past decade.
Some claim to use geology in their understanding of a resource assessment, and then can’t be bothered to throw in so much as a cross section or events chart, but Doug and his group have done a bang up job, even using a vetted probabilistic methodology, rather than those who simply multiply numbers together to create some semi-random point estimate or another. Kudos to Doug and the gang for doing the geology, writing it up and not putting a spin on it, and doing it in a transparent way. We need more geologists like Doug doing geology, and getting these geologically based answers out there for everyone to see.
So now censorship of informed commentary is the solution to the problem of those who appear to add value to the conversation? Which part needs to be hidden from the general readership? Knowledge of the USGS methods, their prior application to the Marcellus, and why it might be conservative in the Utica? I dared to use actual examples of said Marcellus that the author might not be familiar with? I can footnote the post if you’d like, but then it would seem a bit too scientific perhaps? Is it the geology actually provided by Doug, and the obvious note that those who do this based in the fundamentals of the science and can SHOW it are different than those who claim such a foundation, but can’t?
How solid must the foundation of this article be, that the equivalent of a light breeze must be stopped for fear of toppling it? Doubting Doug’s credibility when this work can suffer far less scrutiny is the ultimate irony.
Not censorship, “John.” We’ve just found that when someone posts the same types of comments repeatedly on multiple different articles and posts while hiding behind anonymity, they are effectively spamming the site.
We welcome you to submit an article to resilience.org if you have something substantive to say, but then you’d have to actually share who you are. You can do so here: http://www.resilience.org/contribute#.
An additional note: We just received notice from the USGS that there is no change in the USGS position on its Utica assessment.
Thanks for the link to the “donate” button, but that would presuppose financial support of your organization was my intent. It is not. It is to only note that when one article contains information and facts in building their analysis, that another cannot contradict, it is not the former that has been discredited.
Let me help you out since apparently you found simple instructions confounding.
Good for them. They do geology, they are objective, and base their assessments on being one and knowing the other. And WVU went and did them even better by publishing all the background work.
How about you refute a single fact inside the first order principles and information used in either study, showing how it invalidates the conclusions, prior to just claiming you don’t like the conclusions and therefore they aren’t credible? I’m amazed no one has ever thought of this before.
I have an even better idea, assuming throwing out practical ideas doesn’t get the censors worked up again. Go get the USGS methodology cited in the WVU report, it is publicly available as well, plug in the numbers from all the geologic work that David has done on the Utica, and compare the two results and explain why your inputs are better, make more sense, are more credible. Then at least we can talk about apples to apples comparisons and why the inputs are dfferent, and based on what, instead of this “they lack credibility because I say so!!” rigmarole.
Comments being renditioned all over the place today.
When I compare the footprint of the USGS and WVU “sweet spots” the area does not seem to differ much. Assuming the drainage area also does not change considerably, as information on well spacing and lateral lengths are widely available, the crux of your argument lies in the vastly different EUR estimates. The USGS study clearly states that Utica production data were limited so analogs from other basins were used in the EUR calculations. As one of the previous commenters on your resilience site noted, lack of porosity in the Utica makes it unlike any other shale play–doesn’t the fact that the WVU study used actual Utica well production lend credence to their assessment? Their 7 Bcf mean figure is not out of line with values commonly cited by industry, and the USGS maximum of 1.1 Bcf seems to be extremely low considering wells in West Virginia and western Pennsylvania have IP rates anywhere from 30 to 59 MMcf/day. You mention that the WVU study shows a cumulative production map where Utica wells have, in the span of 2-3 years, produced anywhere from 2 to 5 Bcf…effectively blowing the USGS assessment (maximum of 1.1 Bcf EUR in the sweet spots) out of the water.
In addition, current thinking on the Utica is that porosity is contained within the organic matter, and that as the reservoir becomes more mature, production potential may increase. This could mean that the production data from Ohio that WVU used for their study might actually be low compared to volumes from wells to the east
– The sweet spot area is key and the areas assumed for minimum, mode, and maximum are not stated in the WVU study. The map presented by WVU is far larger for sweet spots than the mode and mean estimate of the USGS as a proportion, not “similar” as he states.
– No information on well spacing or drainage area was provided by WVU, which is critical info and is not “widely available” as he states.
– The WVU study did not present any cumulative gas recovery curves as was stated in my article, and the data they do list shows that most of the wells have produced much less than 2 bcf. The WVU study did not present any backup for their EUR estimates as he states.
– Wells with IPs of 30-59 MMcf/day are not typical in any way shape or form.
– The map presented in the WVU study (below) shows that most wells are less than .5 bcf. I did not say that most of the wells produced between 2-5 bcf in 2-3 years.
Upon reading through the methodology section of the WVU study, it is obvious that to make their calculation they needed to enter all the pertinent information into the USGS methodology, therefore it exists, even if not published within the document (as the USGS does with even their fact sheets).
So the obvious question is, why in the world doesn’t someone pick up the phone, call the author of the study and ask for their inputs?
“Wells with IPs of 30-59 MMcf/day are not typical in any way shape or form.”
But the question is more, but will they be? When obviously those wells are being found, the question becomes “how many more will be found”.
“According to EQT, the well was tested yesterday and had an average 24-hour rate of 72.9 MMcf/d with ~8,600 psi flowing casing pressure. Please note that this is a short lateral. EQT is trying to manage pressure at a reduced ~26 MMcf/d. The well is still cleaning up and pressure is still inclining. No EUR or decline rate estimate will be available for some time.”
Certainly if the sweet spot is being found in the dry gas portion of the Utcia productive area, and that area produces results like this, we might all be discussing how the WVU is just as much an underestimate of productivity as was the USGS study of the Marcellus in 2002.
The dry gas sweet spot in the Utica is concentrated in southeast Ohio and southwest Pennsylvania. As stated in my article there are a few good wells there. These are interspersed with many much poorer wells, including over much of the area the WVU calls a “maximum sweet spot”. The average is thus much less than the best well and the sweet spot much smaller than the WVU assumes. The EQT well is but one well which as you quote has no EUR or decline rate estimate available and cites a 24 hour rate which is unreliable. WVU must have known that its calculation of 20 times as much gas being technically recoverable as in the USGS assessment would attract a lot of attention – the fact that it provided no backup for its EUR assumptions and failed to mention other assumptions is inexcusable if it expected its assessment to be taken seriously.