INTERVIEW The hidden treasure that is the Burket Shale Gregory Wrightstone, Owner, Wrightstone Energy Consulting Today we are discussing the yet-untapped potential of the Burket with Gregory Wrightstone of Wrightstone Energy Consulting. The incredibly successful Marcellus shale – along with the underlying Utica shale, which was recently reported to hold as much as 20 times more dry natural gas as was previously believed – tend to overshadow the shallower Burket-Geneseo shale, which is the black organic rich shale that lies immediately on top of the Tully Limestone, and is an Upper Devonian formation. The play is in an early stage of development but it is already believed that it could be classified as a super-giant field – holding 30 Tcf of dry gas or more. Monica Thomas (Shale Gas International): We are here to talk about the Burket / Geneseo Shale. I understand these are two sections of the same formation – am I correct in thinking that? Gregory Wrightstone (Wrightstone Energy Consulting ): They’re equivalent formations – in other words the accepted terminology across most of Pennsylvania and West Virginia is the Burket, whereas the same formation in North-West Pennsylvania and New York is Geneseo. So they are laterally equivalent.
MT: You chose to talk about the Burket at the recent Hart Energy Developing Unconventionals DUG East conference. What is so important about this shale that the industry should take notice? GW: Well, there have been around 90 wells that have been completed as producers to date. And many of those wells had significant and high production rates. Some of them as high as over a Bcf of gas in
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their first 6 months of production. The analysis indicates that recoverable resources from the Burket will exceed 30 Tcf from the core areas that are identified. Which qualifies it as a super-giant gas field. Super giant being 30 Tcf or greater, which in any other area of the world would be extremely significant, but because it is located in the Appalachian basin it’s overwhelmed by its ‘big brother’ the Marcellus and now the Utica shale. So, it’s incredible that we have a super-giant reservoir this close to the north-eastern gas markets.
MT: You mentioned that the Burket is being overshadowed by the Marcellus. Would you be able to draw a comparison between the Burket and the Marcellus and Utica? GW: The Utica is difficult to assess at this time since – and this is true particularly for the dry gas Utica – it is so early in the play development. That part of the play is still in its infancy, so the decline curves for these wells haven’t been well-established - but have been for the Marcellus, which is further along in the play development. The Burket is also in its infancy but if we just look at the initial production into line in the southwest core area of the Burket, those wells average about 750 Mcf of gas in their first 6 months of the production data. And that compares to a little bit over 1 Bcf in the same time-frame for the Marcellus shale wells. So the production data indicates that the Burket is not quite as good as the Marcellus in its best area. In the northern core area, the Burket wells average about half a Bcf in their first 6 months production, compared to about 1.1 Bcf from the underlying Marcellus. So the Burket has very good production rates but significantly less than the Marcellus. Hence companies prefer to spend their drilling and completion dollars on the Marcellus rather than the Burket in many of the areas.
MT: Could you explain where Burket shale lies in relation to the Marcellus? GW: The Burket is just above the Marcellus and ranges from less than 100 ft above the Marcellus to about 800 ft above it – moving from west to east in the Appalachian basin. So in the western area the Burket, in the best areas, lies about 200 ft above the Marcellus. Therefore one of the main concerns in this area may be that there is frack communication between the overlying Burket and the underlying Marcellus, which may complicate completions in those areas. The Burket ranges from 4,500 ft in depth to more than 7,000 ft in depth for the deepest part of the basin, and since it’s fairly close to the Marcellus, drilling depths are similar to those of the Marcellus.
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MT: How similar are these two shales? Can exploration techniques used on the Marcellus also be adopted for the Burket? GW: I call the Burket the ‘little brother’ of the Marcellus for a number of reasons. It seems to have been deposited in similar depositional environments; they’re both located immediately above limestone, they both have been successfully completed with similar fracking technologies – with large amounts of water and sand. So the technology to both explore , develop and complete these two shales are nearly identical, for both the Marcellus and the Burket.
MT: That sounds like good news for exploration companies. Also, if they are located in the same geographical area, then if a later development of the Burket takes place, operators could use the same infrastructure that is currently built around the Marcellus. GW: That’s true. And the best parts of the Burket overlie some of the better parts of the Marcellus as well. So we will be able to access the Burket perhaps even utilising existing pads, existing roads and pipelines.
MT: You mentioned, however, that there would be challenges? GW: The complicating factor is in the south-west area, where the Burket is not separated from the Marcellus with a large interval. There is a possibility of communication between the two zones, and if the Burket is not completed at the same time as the underlying Marcellus, in that area, a later completion attempt on the Burket may possibly be compromised, and frack down to the underlying Marcellus.
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I mean, in fracture theory, the frack Analysis indicates that recoverable goes where it wants. And when you resources from the Burket will are in a virgin pressure, the frack will exceed 30 Tcf from the core areas. tend to go up a little bit but if you’ve already produced and fracked the underlying Marcellus and produced for 10 years, then there will be a low-pressure sink, which alters the stress regime and alters where the frack might go. The frack might be compromised and not be as effective as if it was completed at the same time as the Marcellus. Some companies have elected to complete the Burket in a stack pattern at the same time as the Marcellus and those wells appear to be performing very well.
MT: So does that mean that, optimally, companies should attempt to explore both of these formations at the same time?
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GW: Yes, but, companies don’t have unlimited capital and they may elect to go for the higherperforming Marcellus wells now, instead of spending their precious capital expenditure dollars on a possibly-lower-performing Burket. Every company is driven by stock price and performance potential of the wells, so there would be a desire on many companies’ part to only pursue their highestperforming wells, which may lead many companies to only complete the Marcellus at this time.
MT: How big an interest in the Burket is there now? How many companies are carrying out exploration work on these deposits? GW: We saw an upturn in drilling in 2014 but that was before the significant decrease in natural gas pricing in the north-east. We saw that permitting in 2014 more than doubled from the year before. It’s unclear what the downturn will do in 2015 to permitting, but there have been 19 companies that have drilled and completed productive Burket wells. The leader is EQT, which had completed 60 producing Burket wells, as of April, and they’re planning another 40 wells for 2015. Or had been.
MT: What do you think will happen in the next couple of years to the Burket shale? GW: We’re driven by natural gas prices for the most part – throughout much of the basin - and the Burket would be very similar. There is virtually no oil production in the Appalachian basin from the unconventional reservoirs. Some of the reservoirs have large liquid production but it would be in the form of a condensate and ethane that would be stripped out of the gas stream. So our economics here are driven predominantly by natural gas pricing which has been significantly impacted by capacity restraints and pipelines to take the gas away from the area.
MT: Do you think this is likely to change? A lot of people are pinning their hopes on the LNG terminals coming online and Sabine Pass is due to come online later this year. Do you think that natural gas prices are going to significantly shift as a result? GW: The recent presentations I heard at DUG East indicated that the big LNG terminals won’t be coming online until 2019 or 2020. So that’s another several years of low pricing. We do have an upside in natural-gas-fired electricity being generated and also a number of large pipelines to take gas to the north into the New Englands and south into the Carolinas. The Burket development will be tied directly to natural gas pricing. There will be continued development of the Burket but it will be tempered by the commodity prices.
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MT: Can you tell us some more about your company – Wrighstone Energy Consulting – and what services you provide to clients who may be interested in exploring the Burket shale? GW: We’re an Appalachian-focused energy consulting company focused on geologic and production analysis and we provide complete database and mapping for the primary shales in the Appalachian basin. We combine geologic mapping with available production data to identify the highest-performing areas for each of the shales.
MT: Last week brought the news of a new study which shows that there might be as much as 20 times more potentially recoverable gas reserves in the Utica shale than previously thought. Would you care to comment on it? GW: They reported that there would be likely nearly 800 Tcf of recoverable gas from the Utica, which compares similarly to the Marcellus shale, which is 500-800 Tcf in recoverable reserves. I think it would help your readers to understand; if you look at the world’s largest natural gas fields, back in 2005 the largest field in the world was North Field/South Pars, in Iran, which holds 1,400 Tcf. The second-largest gas field in the world was the Urengoy field in Russia with 222 Tcf. So the Utica and the Marcellus are both on the order of four times the size as the next largest field in the entire world. A super-giant field is one considered to have 30 Tcf or more. So I’m proposing that for the Utica and the Marcellus we should establish a new category: something that is 500 Tcf or more – instead of a ‘super-giant’, we should be calling it a ‘mega-giant’ or something like that. There are only three fields in the world that are of this size and two of them are right here in the Appalachian basin.
MT: So one could say that with the gas prices being where they are, the Appalachian basin operators are the victims of their own success. GW: There’s large demand but the problem where we are is that there is not enough capacity to take it away. And there is large demand around the world but, again, there’s not a mechanism in place right now to get this extremely low-cost gas to Europe and Asia.
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MT: In your opinion, what would have to change to improve this situation? GW: I believe that we need to have a more co-operative government in Washington DC to advance exporting LNG overseas. We’ve seen the Obama administration dragging their feet on issuing permits. In addition we would like to see less regulatory delays in permitting for natural-gas-fired electricity generation, which should be an easy fix for companies, because we’ve got so much natural gas here and we have a large electrical grid system, but we are seeing a lot of regulatory and permitting delays for both of those situations. Published: 20th July 2015
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