A biennial report conducted by the nonprofit Potential Gas Committee (PGC) found shale gas plays in the Appalachian Basin represented the greatest increase to estimated future potential natural gas supplies in the United States, which were a record 3,141 Tcf at the end of 2016.
About 80 volunteer researchers from the gas exploration, production, transportation and distribution industries, as well as in the field/technical services and consulting sectors, contributed to the report, which was published this month by the PGC. NGI's Shale Dailywas given a copy of the 110-page report last week at a press conference at American Gas Association headquarters.
Researchers divided the United States into seven work areas and 90 geologic provinces for the report. The seven areas are the Atlantic, North Central, Gulf Coast, Midcontinent, Rocky Mountain, Pacific and Alaska.
"This is the fifth consecutive record-high resource evaluation the committee has made in its now 52-year history," the PGC said. Besides the Appalachian Basin in the Atlantic area, the committee said "important new contributions of shale gas" were observed in the Gulf Coast, Midcontinent and Rocky Mountains. The committee cited the East Texas and Gulf Coast basins; Fort Worth, Anadarko and Permian basins; and the Piceance Basin. It also touted conventional and tight gas areas in the Permian.
Appalachian Pushes Atlantic Area To Forefront
The PGC uses the term "traditional" gas resources to include conventional, tight sand, carbonate and shale reservoirs. It should be noted that natural gas prices are the ultimate arbiter of whether gas contained in technically recoverable reserves are ultimately produced or left in the ground.
That said, the PGC said the arithmetically additive grand total of the most likely values of traditional resources -- excluding coalbed methane (CBM) but including all onshore and offshore geologic provinces -- in the Atlantic area totaled 917,890 Bcf at the end of 2016, a 20.9% (158,600 Bcf) increase from the previous biennial assessment. Appalachian shales accounted for 858,700 Bcf, or 93.6%, of the area's total.
"Natural gas in Appalachian shales, which has been produced in modest quantities for domestic purposes since the earliest days of the petroleum industry, has now come to the forefront with the successful application of advanced horizontal drilling and stimulation techniques," the PGC said. "The vast Marcellus Shale in the Northern Appalachians is now demonstrated to represent a world-class natural gas resource as well as a sizeable storehouse of hydrocarbon liquids.
"Another past producer, the Utica Shale, since the last assessment [in 2014] became a prolific new gas and liquids play in its own right.”
The PGC said the majority of its assessment of the Appalachian Basin derived from the Middle Devonian's Marcellus Shale, specifically the Hamilton Group. The assessment also included the Upper Devonian's black and gray shales; the Upper Ordovician's Utica Shale; and the Middle Cambrian's Rogersville Shale, specifically the Conasauga Group. It did not release assessment values for the individual plays, citing confidentiality.
Gulf Coast Down Slightly
In the Gulf Coast Area, which includes 11 onshore and offshore geologic provinces, including the Eagle Ford Shale, the PGC said the arithmetically additive grand total of the most likely values of traditional resources was 475,590 Bcf, a 1.9% (9,430 Bcf) decrease from year-end 2014.
"This region remains an important area of natural gas in the United States," said the PGC. But it added that the "Marcellus and Utica shales in the Appalachian Basin are producing much more than the Northeast U.S. demand, so [the] northern and eastern United States no longer need gas from the Gulf Coast. Much of the gas is staying within the Gulf Coast supplying [petrochemical], LNG [liquefied natural gas] exports and power generation."
The PGC said overall declines in the Gulf Coast area's most likely values were due, in part, to a downward revision of the Pearsall Shale in South Texas, "as a result of disappointing drilling results and well performance." Still, the committee lauded operators in the Eagle Ford Shale for improving overall well performance "by shifting to longer lateral well legs, tighter spacing between fracture stages, in turn requiring more proppant per lateral foot, and closer well spacing."
Midcontinent Still ‘Relatively New Play'
Researchers said the Midcontinent area and its five geologic provinces not only represent "important gas-producing areas but also have the potential for future gas discoveries." Most of those discoveries would probably fall into the small- or intermediate-size categories, they said. Currently, the PGC said the arithmetically additive grand total of the most likely values of traditional resources was 339,720 Bcf, a 21% increase from the 280,400 Bcf estimate made at the end of 2014.
Broken down by shale play, the geologic province to include the Anadarko and Palo Duro basins and the Amarillo Arch accounted for 98,270 Bcf of the Midcontinent's total assessment, a 49.3% increase (32,460 Bcf) from the 2014 estimate. The researchers attributed the rise to new wells being drilled, which increased the area extent for some of the plays being targeted, especially the SCOOP and STACK -- aka the South Central Oklahoma Oil Province and the Sooner Trend of the Anadarko Basin, mostly in Canadian and Kingfisher counties.
"This is still a relatively new play which has been focused on rich gas and condensate wells to make the economics work," the PGC said. "When the market supports deeper high rate dry gas wells the more optimistic assessment may be realized."
Meanwhile, the Permian saw a notable increase in the total assessment of both conventional and shale resources, resulting in a total increase of 10% (4,770 Bcf). The total for the province was an estimated 52,630 Bcf.
"Success with horizontal drilling can be attributed to such improvements as longer lateral legs (to 10,000 feet) enabled by advances in rotary steering, more wells (six to 10) drilled per pad, and advances in measuring-while-drilling and logging-while-drilling. Some operators also report success with shallow, less expensive vertical wells completed with multistage hydraulic fracture treatments in multiple pay sands in the Bell Canyon and Cherry Canyon Formations," which the researchers said are part of the Upper Permian Delaware Mountain Group.
Last week, the PGC estimated that future potential natural gas supplies in the United States stood at a record 3,141 Tcf at the end of 2016, with shale plays accounting for 64% of the total. The estimate found technically recoverable natural gas volumes totaled a record 2,817 Tcf, a 12% (302 Tcf) increase over the previous assessment conducted at the end of 2014.