The re-emerging Mississippian Lime may be cheaper to drill than in some deeper formations, but an abundance of produced water has created a flood of innovative solutions by some operators.
The Midcontinent reservoir, which extends across up to 20 million acres of northern Oklahoma, Kansas and Nebraska, lately has become the new destination of unconventional operators (see NGI, Dec. 3). Finding water to use for unconventional drilling and hydraulic fracturing (fracking) is a challenge, but energy executives offered their take on what's ahead at last month's Mississippi Lime Congress 2012 in Oklahoma City.
Within the drought-prone region, producers are scouring the area for water sources for operators, buying rights to water wells, ponds and streams. Some even have bought ranches to secure the liquid gold. There is, however, plenty of salty water produced from within the limestone formation. Produced water also may prove to be less costly to procure than freshwater, according to Royal Dutch Shell plc's Tai Kim, an engineer.
The "strongest driver is economic," Kim told the audience. He oversees Shell's completions and well interventions in the Mississippian; he previously handled completions for the oil major in the Haynesville and Marcellus shales. Onshore plays all are water-challenged, but the Mississippian in particular is fraught with issues because it's in a drought zone. For Kim, finding solutions by using produced saltwater is showing "great promise," and could make water a minor issue.
"As we develop the Mississippi Lime more and more, freshwater is harder and harder to come by," Kim said. "But we have to drive away from freshwater. As an industry, we are getting a good handle on using produced water. There's not a lot of regulations" concerning water use, but there haven't been "a lot of industrywide examples of good technologies."
Shell's not the only operator finding success with produced water. SandRidge Resources, one of the biggest operators in the play, and many others use saltwater to frack some of their wells. However, using produced water isn't a 100% guarantee. It will take some hits and misses before a workable plan fits, said Kim.
"I think if we get together with industry and have a good, solid plan to manage used water, more will feel comfortable using it," he said. "The costs would go down, I imagine. And it would enable industry to use less freshwater."
Kyle E. Murray, a hydrogeologist for the Oklahoma Geological Survey (OGS), said "marginal" water could offer a "reasonable solution to use in the fracking process." He pointed to efforts by the U.S. Geological Survey (USGS) to "start to explore and locate some of those resources," where brackish water is located.
Murray, who joined the OGS last year, was the first hydrogeologist hired by the state. He's trying to get a handle on how much produced water there is in Oklahoma -- operators aren't required to keep track of it, as they are in Texas. The only information reported to the state about produced water comes from the initial production tests done on wells, which is part of the Oklahoma Corporation Commission (OCC) completion report.
The industry could help reduce freshwater used in drilling by using some of the marginal water sources in Oklahoma that can't be used in irrigation or public supplies without treatment, he said.
"The USGS has done studies in the northern part of Oklahoma in some brackish areas that have been detected with electromagnetics. They are prevalent all over the state, but there hasn't been an effort to search for them. But in drought times posing on us all the time, it might be time to explore those in greater detail..." In some freshwater aquifers in Oklahoma, there is brackish water below. "Those are the types of aquifers that we should be supporting for conservation efforts."
Some critics rail about the amount of water being used for well completions, but Oklahoma drilling statistics indicate the opposite, said Murray.
"In the Mississippi Lime region, most of the area's water users are in the low category for surface water use, except near Oklahoma City in Oklahoma County and near the Tulsa area. Surface water is primarily used for public supply...The portion we are concerned about is a very, very small portion in Oklahoma. It's in the 'industrial mine category,' which indicates that only 1.8% goes to oil and gas. In Kansas, about .6% goes to oil and gas."
Most groundwater that is withdrawn in Oklahoma and Kansas "is for irrigation" for farming. "That's a very well known fact," he said. "When I hear 4 million gallons per well, it is a lot of water, but in a relative sense, it's not so much." Mississippian operators also are using less water than in the adjoining Woodford Shale.
"The medium for fracking is 1.8 million gallons per well" in the Mississippian, "versus over 4.2 million gallons per well in the Woodford," said Murray. "It's a significantly smaller frack volume in the Mississippi Lime than from other formations."
As development accelerates in Oklahoma, the amount of water used to frack wells actually may fall because of increased development in the Mississippian -- an oil and liquids play -- rather than in the Woodford, primarily a gas play. In any case, the amount of freshwater used by operators should remain low.
"Over the course of the last 10 years, the percentage of freshwater used in Oklahoma that was dedicated to well completions and now in fracking has risen from .19% to .57% in 2010," Murray noted. "It's a very small proportion of total water use...Water use is far less than 1%."
For operators, it's more than just the cost. One saltwater disposal well is being drilled for as few as four completed oil wells, according to statistics. SandRidge, for instance, has been drilling a disposal well for every eight to 12 producing wells in the Arbuckle formation. Oil and gas wells are cheaper to drill in the Mississippian because it's shallower than the Bakken or Marcellus. However, disposing of produced water can add an estimated $200,000 to completed well's price tag. That can add up.
Chemicals are available -- "friction reducers" to add to the produced water "to get 70% friction reduction within a minute," said OCC's Charles Lord, program manager for the underground injection control program. "People use that...some blend it with freshwater, and not just in the Mississippi Lime. This is the type of friction reducers they use in the Marcellus, Eagle Ford, lots of other places.
"The industry as a whole asked chemical companies to produce friction reducers to be more environmentally responsible. And today there are tools out there to accomplish this. You don't have to blend freshwater with it..."
In addition to the environmental benefits, it's a public benefit as well. Today the OCC is seeing "a lot more protests than we used to" when permits are requested for Class II disposal wells, noted Lord. "Normally we have 350 applications a year. This year we've had 818 applications. We've been very busy," he told the audience. The state now has more than 11,000 disposal wells, as well as 8,000 unplugged and 6,000 plugged disposal wells.
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