Barnett Shale
Region:	Texas
Country:	United States
Offshore/Onshore:	Onshore
Operators:	Devon, Chesapeake, EOG, XTO, EnCana, ConocoPhillips, Quicksilver, Denbury
Field History
Discovery:	1980s
Start of production:	1999
Production
Current Production Oil (Bod):
Current Production Gas (Mcfd):	2 Bcf/d
Estimated GIIP (Bcf):	2.1 – 30 Tcf
Producing Formations:	Barnett Shale

The Barnett Shale is a geological formation of economic significance. It consists of sedimentary rocks of Mississippian age in the U.S. State of Texas. The formation is estimated to stretch from the city of Dallas to west of the city of Fort Worth and south, covering 5,000 square miles (13,000 km²) and at least 17 counties.

Some experts have suggested the Barnett Shale may be the largest onshore natural gas field in the United States. (Barnett Shale Economic Impact Study, May,2007, p.16) The field is proven to have 2.5 trillion cubic feet (59 km³) of natural gas, and is widely estimated to contain as much as 30 trillion cubic feet of natural gas resources.(Barnett Shale Economic Impact Study, May,2007, p.16) Oil has also been found in lesser quantities, but sufficient (with recent high oil prices) to be commercially viable.

The Barnett Shale is known as a "tight gas" reservoir, indicating that the gas is not easily extracted. The shale is very hard, and it was virtually impossible to produce gas in commercial quantities from this formation until recent improvements were made in hydraulic fracturing technology and horizontal drilling, and there was an upturn in the natural gas price.

Future development of the field will also be hampered in part by the fact that major portions of the field are covered by development and will continue to be, since it is located in portions of the rapidly growing Dallas-Fort Worth Metroplex. Some local governments are researching means where they can drill on existing public land (e.g., parks) without disrupting other activities so they may obtain royalties on any minerals found, while others are seeking compensation from drilling companies for damage to roads caused by overweight vehicles (many of the roads are rural and not designed for use by heavy equipment).

History

Named after John W. Barnett who settled in the San Saba County during late 19th century where he named a local stream the Barnett Stream. During the early 20th century during a geological mapping exercise, geologists noted a thick black organic-rich shale in an outcrop close to the stream. The shale was consequently named the Barnett Shale.

The Barnett shale has acted as an important source and sealing cap rock for more conventional oil and gas reservoirs in the area. It was only thought that a few of the thicker sections close to Fort Worth would be able to support economic drilling. It was not until the 1980s when new advances in horizontal drilling and the application of fraccing the well was used by Mitchell Energy, a small independent, that the potential of the Barnett Shale was realized. Significant drilling activity did not happen though until the gas price increased in the late 1990s. Devon Energy acquired Mitchell Energy in 2002 and has established it self as the leading producer from the Barnett Shale. The large volumes and the success that independents have had in producing from the Barnett Shale has now started to attract the interest of the large Majors like Exxon and which had previously not been interested.

Well completion

Two key developments in well design and completions has allowed the development of the Barnett Shale to be economic. These are horizontal drilling and hydraulic fracturing.

Horizontal drilling

As of 2007, recent advances in the technology of horizontal drilling have opened up the potential of the Barnett Shale as a major producer of natural gas. Horizontal drilling has changed the way oil and gas drilling is done by allowing producers to drill horizontally beneath neighbourhoods, schools and airports. Since much of the gas in the Barnett Shale is lodged beneath the City of Fort Worth, this new drilling technology has created a boom for the city. The new technology has brought in a tremendous number of independent producers both large and small.

In 2005–2007 horizontal drilling in the Barnett Shale extended south into Johnson, Hill, and Bosque counties, with a 100% success rate on completed wells. An experimental vertical well is being drilled in McLennan County (near Waco) to assess the potential for development along the Ouachita Fold, a geological barrier which defines the southern limit of the Barnett Shale.

Hydraulic fracturing

Hydraulic fracturing carried out in the Barnett Shale is done by pumping water into the well bore at a sufficient pressure to create and propagate a fracture in the surrounding rock formation down hole. This is crucial in low permeability rock as it exposes more of the formation to the well bore and greater volumes of gas can be produced by the increased surface area. Without hydraulic fracturing the wells would not produce at a sufficient rate in order to make them economic.

In some of the wells there is a danger where the fracture will propagate too far and enter into the formation below the Barnett Shale. This formation is water bearing and would result in the well having to be abandoned.

Economics

A Barnett Shale well drilled in the core area is expected to access reserves of approximately 1.2 Bcf. A standard well in the Core development area will need a natural gas price of approximately $5 Mscf in order to be economic. Non-core wells will need slightly higher price due to the smaller reserves expected to be encountered. While many believe these economic assumptions to be correct, a recent analysis of production-decline rates suggests that required prices may need to be significantly higher to be economic.

Lease bonuses paid to landowners in the southern counties range from $200–$2000 per acre with royalty payments in the 18%–25% range, much greater than what was being offered as few as 3 years ago. One lease in Johnson County now has 19 wells permitted. New drilling permits in Johnson County are being approved at an average rate of 60 per month, and Hill County at a rate of 20 per month.

In 2006, the Barnett Shale was responsible for 55,385 permanent jobs, and contributed $491 million in revenues to the state of Texas, and $228 million in revenues to local governments. Economic projections indicate that by 2015, the Barnett may be responsible for more than 108,000 jobs.^[1]

Transportation

In addition, the gas pipeline network needed to transport the gas to market is being aggressively expanded. The completion of a 42" natural gas transmission pipeline through Hill County will open up new areas for drilling.

Operators in the Barnett

Operators, such as EOG Resources and Devon Energy, have stated in Public Reports as recently as Mid-2005 that they estimate that 1/3 to 1/2 of the land in these counties, including "hot" counties like Johnson and Tarrant, will get wells (It would logically flow that the rest of the land will either get pooled in a unit that will have wells, or get nothing at all if the land is in an especially complex area). There have been few dry holes drilled, however, because technology like 3D Seismic allows operators to identify potential hazards before they drill and avoid this bad area. Some of these hazards include faults and karst features (sinkholes). Faults may steal the energy from hydraulic fracturing, reducing its effectiveness, and karst features may contain abundant water that limits the production of gas.

Significant producers

• Devon Energy
• EnCana Oil & Gas USA
• EOG Resources
• Chesapeake Energy
• XTO Energy
• ConocoPhillips
• Quicksilver
• Denbury
• David H. Arrington Oil & Gas, Inc

Geography of Barnett Shale

The Barnett Shale has been classified as falling into "Core" and "Non-Core" areas of production. To date production has concentrated in the Core area where the shale is thicker and the uncertainty is reduced. This allows for the wells to be drilled at slightly lower gas prices than those in Non-core areas.

Core

• Denton (active)
• Tarrant (active)
• Wise (active)

Non-core

• Bosque (potential)
• Comanche (potential)
• Cooke (active)
• Ellis (potential)
• Erath (active)
• Hamilton (potential)
• Hill (active)
• Hood (active)
• Jack (potential)
• Johnson (active)
• Montague (potential)
• Palo Pinto (active)
• Parker (active)
• Somervell (potential)

Legacy

The great economic success of the Barnett Shale gas play has spurred companies to search for other sources of shale gas across the United States. Other shale gas plays in the United States include the Antrim Shale in Michigan, the Fayetteville Shale in Arkansas, the Woodford Shale in Oklahoma, and the Ohio Shale in Kentucky and West Virginia.

Links

• Texas Railroad Commission Public Interactive Data
• Barnett Shale Maps
• Barnett Shale Gas
• Royalty Owners of Texas Forum
• FWCanDo (Fort Worth Citizens Against Neighborhood Drilling Ordinance)

A few words about Hydraulic Fracture [1]]

References