ANADARKO PETROLEUM CORPORATION Shale Resources Development and Optimization Foundational Practices and Technology Opportunities P.K. Pande – May 4, 2016 Outline, Full Life Cycle Integrated Approach • Context & Challenges, North America • Development Value Drivers • Core Elements, Integrated Practices • Key Learnings • Technology Advancement Opportunities ANADARKO PETROLEUM CORPORATION 2 North America: ~1,750 TCF; ~ 100 BSTB Global: ~6,000 TCF; ~ 320 BSTB EIA Estimates Horn River Basin/ Cordova Embayment y Montney Deep Basin Colorado Group Well Developed Infrastructure Private Sector Ownership Competitive Industry with independent drillers Flexible, Adaptive Supply Chains Supportive Fiscal Regimes Bakken Niobrara/Mowry Utica Marcellus Woodford Fayetteville Permian OIL SHALE PLAY GAS SHALE PLAY Haynesville Eagle Ford Barnett ~ 70,000 wells ANADARKO PETROLEUM CORPORATION 3 Assessment Challenges Screening Technical & Economic Capture Exploration Pilot Appraisal Pilot Development Secure Position, Drill, Test Development Strategy Refine Analysis Establish JVs & Commercial Optimize • Technical • New Play Types, Low Reservoir Producibility • Multi-discipline Integration, Subsurface and “Factory Mode Operations” • Commercial • Highly Competitive, Large Leaseholds • Costs & Optimization ANADARKO PETROLEUM CORPORATION 4 Performance Analysis Tools and Technologies Performance Prediction Limitations • Shale Performance Forecasting • Very Low Permeability • Stress Dependence • Mechanisms • Fractured Horizontal • Diffusion • Phase Behavior ANADARKO PETROLEUM CORPORATION 5 Powerful Workflows for Life Cycle Solutions Field Demonstrations Apply Results and Iterate • Validate Mechanistic Modelling Design, Plan and Implement Field Demonstrations Integrated Reservoir Description Performance Analysis Performance Analysis ANADARKO PETROLEUM CORPORATION Integrated Asset Model 6 Full Life Cycle Integrated Approach - Context & Evolution 2009 2010 Issues 2011 2013 Well Spacing Drawdown Management Completion Design Artificial Lift EUR Subsurface Completions Integration Field Demonstrations Geomechanical Modeling Mechanistic Modeling Solutions 2012 20142016+ Integrated Asset Management Integrated Asset Modeling Well Level IPRs Performance Analysis Micro-Field Demonstrations Seismic Permeability Modeling Data Acquisition ANADARKO PETROLEUM CORPORATION 7 Field Demonstrations, Controlled Pilots Multiple Field Pilots to Address Key Issues and Uncertainties • To Have Value Must Be: • Systematic • Statistically Valid • Scalable • General Shale Play Application • Build Database of Analogs Apply Results and Iterate • Goal • Capital Investment Efficiency Validate Design, Plan and Implement Field Demonstrations Integrated Reservoir Description Performance Analysis ANADARKO PETROLEUM CORPORATION 8 What is a Field Demonstration? A Program of Multiple Field Pilots to Address Key Issues and Uncertainties “Learning While Drilling” To Have Value They Must Be: ▪ Systematic Apply Results & Iterate ▪ Statistically Valid ▪ Scalable General Shale Play Application ▪ Build Database of Analogs Validate Design, Plan, Implement Field Demonstrations Integrated Reservoir Description Performance Analysis Goal ▪ Capital Investment Efficiency ANADARKO PETROLEUM CORPORATION 9 Field Demonstration Types • Strategic • • • • Spacing Characterization PVT/Liquids Completion ~150 km • Development • Azimuth • Stratigraphic Interval • Target Line TX Eagle Ford ANADARKO PETROLEUM CORPORATION 10 Eagle Ford Well Spacing Field Demonstrations “Learning While Drilling” • 12 Million Acres • Production > ~5+ BCFD > ~940 MBOPD Apply Results and Iterate Validate • ~ 20,000+ Wells Design, Plan and Implement Field Demonstrations Integrated Reservoir Description Performance Analysis TX ANADARKO PETROLEUM CORPORATION 11 Well Spacing Field Demo - Early vs. New Practices Porosity High Low Elements Affecting Production / Spacing ▪ Matrix Properties, Fluids ▪ Fracture Swarms / Faults ▪ Pre-existing Fractures ▪ Completion ANADARKO PETROLEUM CORPORATION Field Demo – Data Acquisition Design & Planning Microseismic Events Reservoir Characterization ▪ Reference ▪ Fluids, Geochemistry, Logs ▪ Dynamic ▪ Micro-Seismic ▪ Production Logs, Pressures ANADARKO PETROLEUM CORPORATION Systematic, Scalable ▪ All In Same Zone • Consistent Completons • Same Stimulated Length • Consistent Flowback Performance Analysis Tools and Technologies ANADARKO PETROLEUM CORPORATION 14 Mechanistic Evaluation Workflow Integrate Subsurface, Well, & Completion Data Key Data Fluids | Matrix | Fractures History-Match Multiple Geologic Scenarios Reservoir Sensitivity Analysis & Diagnosis Performance Predictions Well Spacing/ Interference Well Performance Drivers ANADARKO PETROLEUM CORPORATION EUR + OIP/GIP + Drainage Estimate Impact of Key Uncertainties Mechanistic Studies – What Can be Inferred? • Completion • Stimulated Rock Volume (SRV) and Fracture Conductivity • Phase Behavior • Dry Gas, Liquid Rich Systems • Reservoir Characterization • Open Natural Fractures Impact • Development Planning • Well Spacing ANADARKO PETROLEUM CORPORATION Stimulated Rock Volume (SRV) Native Shale Outer SRV Inner SRV 16 Eagle Ford Rich Gas Condensate Performance (30 yrs) Pressure Distribution Condensate Distribution Oil RF = 19% (in SRV) / Gas RF = 30% (in SRV) Well Bore Saturation Pressure (So)initial = 0 ANADARKO PETROLEUM CORPORATION K ~ Moderate - High 17 Eagle Ford Rich Gas Condensate Shale Sensitivity Analysis (Production Change (%) Short Term Effects Long Term Effects (1 Year) (10 Years) [ ] Matrix Quality SRV Size Fracture Perm Fluid Type Initial Pressure Desorption Low Side -100 -80 -60 -40 -20 High Side 0 20 40 60 80 100 Low Side -100 -80 -60 -40 -20 ANADARKO PETROLEUM CORPORATION 0 20 40 60 80 100 Base Case Base Case Reservoir High Side Completion Fluid Skip Examples 18 Eagle Ford Well Spacing Demonstration Stimulated Volume from Microseismic Mechanistic Modeling Near-Critical Oil Pressure Distribution at 30 Years 5500 SRV 5050 4600 4150 3700 3250 2800 2350 1900 1450 1000 Estimate of ½ Length = 250’ No contribution outside SRV Combine Both Technologies With Economics… BEST SPACING ESTIMATE ANADARKO PETROLEUM CORPORATION Performance Analysis: Flow Regimes in Unconventional Reservoirs Very Early Time: Linear Flow (fracture flow does not interfere) Middle Time "SRV" Flow: ("depletion") (fracture flow does interfere) Late Time: "Post-SRV" Flow ("Compound Linear Flow") Increasing Time → ANADARKO PETROLEUM CORPORATION 20 Marcellus Dry Gas Fractured Shale Production Analysis History Match&&Forecast Forecast History Match 108 102 107 101 “b” factor 106 100 β – D/b 105 104 10-1 b, β and D Gas Rate, MSCF/D Actual Data 10-2 q - rate 103 10-3 D – decline rate 102 100 101 102 104 Production Time, Days 103 10-4 100 104 101 102 103 Production Time, Days Modified Hyperbolic Time Rate Performance Model ANADARKO PETROLEUM CORPORATION 21 Shale Technology Subsurface Integration • Field Demonstrations and Mechanistic Studies • Capture Static / Dynamic Data • Validate Results Petrophysics Cores, Logs, (f, k) Geochemistry Fluid Properties, PVT + + Fracture Analysis + G&G Integration + Rock Mechanics, Fluid Flow Seismic Integration, Horizontal Targeting Reservoir Modeling Performance Analysis EUR Determination Production Forecasting Commercial / Technical Success ANADARKO PETROLEUM CORPORATION 22 Integrated Asset Management - Support Well Life Cycle 8,000 Real Time Surveillance Production Optimization 7,000 Unloading Reservoir/Well Monitoring 6,000 Flow Rate 5,000 Production Problems Well and Reservoir Timely Identification Performance Management Problem Diagnostics Problem Remediation Down Time Management IFM PVT Program PTA, RTA, Nodal Analysis, Material Balance Drawdown Management 4,000 Production Enhancement 3,000 Artificial Lift Re‐Fracturing Tubing Re‐Sizing 2,000 Artificial Lift 1,000 0 0 2,000 4,000 Re‐Fracturing 6,000 8,000 10,000 Time, Days ANADARKO PETROLEUM CORPORATION 23 Reservoir Management & Surveillance Systems …Add Production & Create Value Every Day Gather Data Analyze Data Well Model Well WHP, BHP, CHP, QW, QG, QO Identify Problem and Solution Fluid PVT Reservoir Model Program modules model changes and sends changes to estimate new forecast Computed Field Production Forecast, BHP, THP Program modules 1. Analyze well data and and diagnose problems 2. Propose solution and perform economic analysis. 3. Recommend analysis to engineers Next well in the field YES Is Actual = Model Forecast ? NO 1. Engineer verifies analysis, 2. Decides action and implements it. And Repeat this process Every Day for All Wells! ANADARKO PETROLEUM CORPORATION 24 Innovative Tools and Methods to Model Shale Reservoirs Inegrated Asset Model Tank Pressure Prediction HENRICKSON14N-18HZ - Dual Porosity Tank Models 4,600 Legend Matrix Tank Fracture Tank 4,400 Pressure, psia 4,200 4,000 3,800 3,600 3,400 Jan 2014 Apr 2014 Jul 2014 Oct 2014 Jan 2015 Apr 2015 Jul 2015 Date Qo, Oil Rate STB/D Well Performance Prediction MBAL Shale Model Tanks ANADARKO PETROLEUM CORPORATION Time 25 IAM Application For Improved Drawdown Management Wattenberg Application 1,400 140,000 Choke Size, 1/64 inch Oil Rate, STB/D 1,000 800 100,000 80,000 600 60,000 400 40,000 200 20,000 0 Oct 2012 Production decline mechanisms: ● Fracture pressure decline. ● Relative permeability effects. ● Fracture/proppant compaction. ANADARKO PETROLEUM CORPORATION 120,000 14 16 18 20 22 24 32 64 Cum. Production, STB 1,200 Jan 2013 Apr 2013 Date Jul 2013 Oct 2013 0 Learnings: ● Choke (drawdown) changes significant. Important: ●Early in well life when minimal pressure margins to two-phase PVT region. 26 500 180,000 400 150,000 300 120,000 Early Artifical Lift 200 100 No Lift 90,000 60,000 Later Artifical Lift 0 30,000 -100 2012 Cum. Production, STB Oil Rate, STB/D IAM Application For Artificial Lift Design/Impact 0 2013 2014 2015 2016 2017 2018 2019 2020 2021 Date Increase Rates and EUR: ● Timing of artificial lift is important. ● Early artificial lift impacts EUR. ANADARKO PETROLEUM CORPORATION Applicable Types of Artificial Lift: ● Sucker rod pumps. ● Continuous gas lift. ● Intermittent gas lift. ● Plunger lift. 27 Conclusions & Key Learnings – Development Planning • Field Demonstrations, Mechanistic Models, Performance Analysis Key to Development and Optimization • Target interval • Thermal Maturity Window • Well Spacing, Completions Apply Results and Iterate Validate Design, Plan and Implement Field Demonstrations Integrated Reservoir Description Performance Analysis ANADARKO PETROLEUM CORPORATION 28 Key Learnings - Full Life Cycle Value Drivers Value Driver --- Value and Resources +++ Development Approach Uniform Spacing, Offset Practices Geological Targeted Semi-Custom Spacing Performance Analysis Type Curves, Arps, Statistical Advanced Analytical, Numerical, SRV Diagnosis Data Acquisition Ad Hoc Appropriate Combinations & Timing Scale of Measurement Single Level Multi-Level with Validation Subsurface Analysis Single Domain Static & Dynamic Data Geology, Geophysics, Petrophysics, Reservoir Engineering Integrated Asset Management Reservoir, Subsurface Level Field Level; Reservoir, Wells, Facilities ANADARKO PETROLEUM CORPORATION 29 Technology Advancement Opportunities Near to Mid-Term Focus “Fast Adoption” to Operations Critical: ●Core Development — Robust, early-engineered completions design — Focus on well spacing as a development variable ●Newest Development Challenges — Development of multiple stratigraphic targets — Water production mechanisms; handling multi-phase production Enabling: ●Production diagnostics — understand flow regimes earlier in well life Production Enhancement ●Robust technical and performance screening criteria for well completions and re-fracturing ●Utilization/timing of artificial lift ANADARKO PETROLEUM CORPORATION 30 Thank You ANADARKO PETROLEUM CORPORATION 31
