New Life In The Barnett Shale, Where The Revolution Started Twenty Years Ago.

Originally published on Forbes.com on December 29, 2022

Since 2020, BKV Corp has bought 7,000 wells from Devon and ExxonMobil, and these are making almost a billion cfd. One secret is fracking technology modernized since the first horizontal wells 20 years ago.

The shale revolution began in the US about the year 2000. It made the US self-sufficient in oil and gas, for the first time since 1947. And in 2016 it enabled oil and gas to be exported from the US. The US has become in 2022 the largest exporter of LNG (liquefied natural gas) in the world. And where does this LNG go? Much of it is going to Europe to shore up the gas supplies that Russia has been cutting.

The shale revolution began in the Barnett Shale, where there are 16,000 horizontal wells. In 2002 Devon Energy bought Mitchell Energy properties in the Barnett shale and Devon initiated the shale revolution with success in fracking long horizontal wells – the key to shale technology.

Has the shale revolution ended? No way — in fact a surge of activity in the Barnett by new operators is revitalizing the play. Let’s find out what made one of these operators jump into a declining resource, and what fresh schemes they are using for success.

In 2009, the shale revolution really took off and lowered the price of natural gas for many years (Figure 1). Energy in the US has been cheap and reliable for over a decade. But this year, 2022, gas prices in the US have risen, highest by 3 times, due to a rebound after the pandemic and supply chain interruptions.

At the same time, European gas prices have increased much more, by 5-7 times, due to cutbacks in Russian gas attributed to the war on Ukraine.

Barnett Shale is living longer.    

There are several reasons for the uptick in activity in the Barnett Shale. First, gas prices that are higher than they have been since 2009 (Figure 1). And the booming LNG markets along the Gulf Coast are not too far away.

Second, buyout consolidations can lead to more efficient operations. BKV Corp., a private company that is the biggest producer, bought Devon’s properties in the Barnett for $830 million in October 2020. In 2013, Devon Energy had been the top of 235 operators in the Barnett ranked by gas volume produced.

They also purchased upstream assets from ExxonMobil worth $750 million in July 2022. At the same time, they bought from Barnett Gathering almost 800 miles of pipelines that collected gas, facilities that compressed the gas, and midstream infrastructure that processed the gas.

With 7,000 wells costing more than $2 billion, BKV produces over 860 MMcfe/d (million cubic feet of gas per day) — 80% is natural gas, and 20% is NGL (natural gas liquids). In November 2022 the company filed paperwork for an IPO (initial public offering) with the Securities and Exchange Commission.

Third, fracking technology has improved since the first horizontal wells were drilled and fracked in the Barnett. That was 2003 when wells were half a mile or a mile long and fracked just a few times along their length. These old wells are being refractured using upgraded techniques.

Modern fracking techniques.

Typically, horizontal wells in shale are two miles long and are pumped with 40 separate fracking operations or stages. Each stage is roughly 250 feet long and the metal casing contains 10-20 clusters of perforations, with several perforations in each cluster. The fracking equipment required at the wellsite is massive (Figure 2).

Frac fluids and proppant are optimized. For example, frac fluid is mostly water but now with a higher fraction of 100-mesh sand in the mix with 20-40 sand. Total water per well is about 20 million gallons, enough to fill a football field to a height of 40 feet over the grassed area. Total proppant sand can fill over 90 railroad containers. These extreme volumes, for just a single well, require ideally a sand-pit source in the area and serious recycling of produced water for the next frac treatment.

Ultra-fine-grained sand particles have shown promise when pumped ahead of the main sand proppant. One such proppant is called DEEPROP.

Simultaneous frac operations (called zipper fracs) can be done in two or more wells and this lowers well completion costs significantly.

Other new technologies include wider collection and interpretation of data such as pressures from other wellbores close by. One expert says bottom-hole pressure in offset wells should be routinely recorded in real time. Pressure changes in offset wells can lead to real-time analysis of where hydraulic fractures are growing. This is important to minimize detrimental interactions between parent and child wells.

Of less concern in the Barnett shale are plays that have multi-layered payzones. In such cases, a horizontal well can be drilled in each payzone and all the horizontals connected to a single vertical wellhead.

Cases of stacked pay like this require special logistics and synchronized operations to frac and then produce effectively from all horizontals. But the results can be remarkable. The biggest shale gas well in the Marcellus made about 70 Mcfd after fracking. Two monster shale oil wells in the Permian were announced by Devon in 2018 making 11,000-12,000 boe/d in an early 24-hour period.

In the Barnett, modern techniques used by BKV reported early production that matched original production (IP) from their wells, but the gas rate decline was faster.

Takeaways.

There are several reasons for the uptick in activity in the Barnett Shale. First, gas price is higher than it’s been since 2009.

BKV Corp bought properties from Devon in 2020 and ExxonMobil in 2022. With 7,000 wells making almost a billion cfd, this is not quite 1% of total US gas production of 95 billion cfd.

The main secret is fracking technology that has improved since the first horizontal wells were drilled and fracked in the Barnett 20 years ago.

Modern fracking techniques include simultaneous frac operations (called zipper fracs) that can be done in two or more wells, and this lowers well completion costs significantly.

Other new techniques include wider collection of data such as pressures from other wellbores close by, and their interpretation to understand and optimize fracture growth in real time.