Twenty years ago, when the Colorado Oil & Gas Association (COGA) welcomed the energy industry to its first trade show in Denver, projected recoverable natural gas resources in the Rocky Mountains were estimated at around 100 Tcf. Today the Rockies hold estimated proved reserves of around 87 Tcf and a remaining recoverable potential of 228 Tcf, but as industry veterans noted Thursday, nobody yet knows the true size and nature of the gas potential.
Vello Kuuskraa, president of Advanced Resources International Inc., was at the first COGA conference in 1989. Thursday he shared a panel with a group of self-described "grizzled energy veterans" who shared their insight into what has led to success for Rockies gas producers -- and what they've learned as they look for more prospects.
What Rockies experts considered to be "highly optimistic" about recoverable gas resources in 1989 "fell short of the mark," Kuuskraa told a packed audience at the Rocky Mountain Energy Epicenter. COGA this year evolved into an event cosponsored by the Rocky Mountain Section of the American Association of Petroleum Geologists. "In the interim, since the first COGA meeting, giants showed the way." Work by the Gas Research Institute, which directed research and development spending to Rockies unconventional gas; the U.S. Geological Service, which was "early to see the size of the Rockies prize;" and early explorers, which included Barrett Resources Corp., were the region's early advocates, he noted. (Barrett Resources was purchased by Williams in 2001 (see NGI, May 14, 2001)).
The efforts of those pioneers and the ever-evolving technology tells the tale. In 2007 Rockies total output stood at 5.1 Tcf, up from 2.1 Tcf 20 years ago -- and it's growing faster every day. Gas producing wells have quadrupled over the two decades to around 99,000 wells, and completed wells have nearly tripled to 9,500. In the meantime, oil and gas prices today are at staggering highs, which further encourages exploration.
Success in the Rockies has taken a lot of "collaboration and leadership," said Marvin Brittenham, EnCana Oil & Gas (USA) team leader of new U.S. ventures. "The plays are hard to unlock, and it takes persistence; sometimes we had to wait for the technology to evolve."
EnCana's persistence in the Jonah field of the Powder River Basin of Wyoming is an example of how to succeed in business -- by really trying. Jonah is one of EnCana's four core resource plays in North America. Only through the evolution of technology -- and eight years of trial and error -- was EnCana able to "drill down to the base of the pyramid," said Brittenham. "Resource plays often have a long history; they require persistence," he said. "Some of the plays we are in we stuck to through two or three cycles..."
John Robinson, another industry veteran who now helms North Ranch Resources LLC in Denver, called the Jonah field "a leading candidate for much of the progress made in the Rockies that has been applied to other fields. It was an early explorer field, and a great example of the progress the industry has made."
From well techniques to stimulation techniques to well spacing, producers are taking new technologies and extracting more gas than anyone thought possible 10 years ago.
Robinson explained how in the 1980s Forest Oil Corp. used a "single line anomaly" to test a well in the Jonah play. BP plc predecessor company Amoco then "shot its first 3-D and turned a light on in a dark room. All of the sudden, voila, there it was..." Now EnCana uses its fully integrated 3-D analysis to exploit the field.
"We think we know everything there is to know about the Jonah field, but I bet EnCana would disagree," said Robinson. "The point to be taken is that some areas that were not economic before now are..."
Fred Barrett, CEO of Bill Barrett Inc., believes that "some of the largest legacy resource plays in the Rockies have yet to be discovered...By legacy asset, I tend to mean large-scale resource plays, where development tends to cover multiple decades. Game-changer technology launches these things, followed by evolutionary step changes. As a result, they tend to transmit repeatable growth over time."
The West Tavaputs gas discovery in the Uinta Basin of Utah is a "story of persistence and team work...laden with a number of obstacles that tested our ingenuity," Barrett told the audience.
Barrett and the other panelists offered advice on overcoming barriers to entry in the gas fields -- whether they be physical or regulatory. No. 1, said Barrett, is to plan ahead.
"Once you get your arms around the 3-D, the initial regulatory hurdles and can begin drilling consistently, you have a true resource play," said Barrett. But exploring legacy assets is an ongoing effort, he explained. Now the company has begun to probe "the deep and ultra-deep" within the Rockies -- and he said it's still a mystery as to what it will find.
"The lessons learned are not to give up; stay with your instincts," said Barrett. "We're looking for legacy plays, and some of the largest legacy plays have yet to be found."
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