Barnett Shale

New Barnett Shale study sees production through 2030

The Barnett Shale can be expected to produce about 44 trillion cubic feet over its lifetime, more than three times its production to date, and will still be a  significant producer in 2030, according to a new study by the Bureau of Economic Geology at the University of Texas at Austin. After peaking at about 2 trillion cubic feet a year in 2011, the field will see "slowly declining production" that by the year 2030 is still about 900 billion cubic feet a year. The BEG used data through 2010 from 15,000 wells in the big North Texas field and assumes future natural gas prices averaging $4 per 1,000 cubic feet.

Even though the productivity of the field varies greatly, the study found, "there are still many locations to drill in the better rock," according to a news release describing the study's findings. Scott Tinker, director of the BEG and one of the study's principal investigators, said "drilling the better rock won't last forever, but there are still a few more years of development remaining in the better rock quality areas," according to the release. The study forecasts another 13,000 wells drilled in the field through 2030 after the study's cut-off date, a figure that includes about 2,900 wells drilled in 2011 and 2012.

The BEG said its method of estimating production from shale wells "should offer a more accurate method of forecasting production declines in shale gas wells," a point of dispute between some producers and skeptics such as Houston geologist Art Berman. As the study notes, its estimate "falls in between some of the more optimistic and pessimistic predictions of production from the Barnett." The BEG's release on the study says it "reaffirms the transformative, long-term impact of shale and other unconventional reservoirs of oil and gas on U.S. energy markets." It quotes Tinker as comparing shale gas reserves development as "potentially analogous to offshore oil in terms of impact."

The BEG's release on the study is here. The Star-Telegram reported on some of the report's findings earlier, focusing not just on Tinker's forecasts but also individual well productivity . The BEG's release does not address its findings on the average Barnett well's cumulative production over its lifetime, called the estimated ultimate recovery, or EUR. A link to that report is here.

-- Jim Fuquay

UT Bureau of Economic Geology to release highlights of Barnett Shale study

Some results of a two-year study of the Barnett Shale by the Bureau of Economic Geology at the University of Texas at Austin are scheduled to be released Thursday, a representative of the school says. The study is considered the most comprehensive survey of the field that started the U.S. shale gas boom. The Star-Telegram reported Feb. 12 on some of its findings, including that the field will likely produce about three times the natural gas it has yielded so far, but also that productivity varies widely across the field and individual wells on average might not produce over their lives as much as some producers have estimated. The Star-Telegram's earlier report is here.

-- Jim Fuquay

Devon Energy still No. 1 in the Barnett Shale

Last month we published an item noting that by the Texas Railroad Commission's count, Chesapeake Energy had edged past Devon Energy as the biggest  gas producer in the Barnett Shale as of June, the latest figures at the time. But both companies quickly questioned the numbers and we qualified our report, with good reason as it turns out. Gene Powell, the data dean of the Barnett Shale and publisher of Powell Shale Digest, just ran the numbers for production through October 2012, the latest available from the Railroad Commission, and Devon is still No. 1, just ahead of Chesapeake. Both are well ahead of No. 3 XTO Energy.

According to Powell's numbers, Devon in October averaged 1.495 billion cubic feet a day. Chesapeake averaged 1.375 Bcf/d and XTO averaged 826 million cubic feet a day. The difference maker is wells in the Railroad Commission's pending file, which contains wells that are backlogged or contain incomplete information. Production from those wells doesn't  show up on the Railroad Commission's Barnett Shale summary page. Based on our recent conversations with both producers, Devon last year drilled about 300 wells, vs. Chesapeake's fewer than 100, so perhaps that has something to do with it.

Powell notes that the Barnett Shale was still chugging along at 5.2 Bcf/d in October despite the sharp decline in drilling in the field. Some of that doubtless is because wells drilled in the past were finally connected to a sales line. For example, Chesapeake only last year laid an 8-inch line to its Westgate padsite on the southern edge of downtown Fort Worth, and that well was drilled in 2008 and completed in 2009. See our item here. But operators also say that despite their deserved reputation for sharp production declines in the early years, Barnett wells are proving to be pretty decent long-term producers. We've run some numbers ourselves using Powell's data and wells that are 10 years old still produce 11 percent of their peak initial production, while those 20-30 years old are still producing on average 10 percent of their peak. Of the 85 Barnett Shale wells 20 years old or older, all but four were still producing in June, the latest month we have. They averaged 99,000 cubic feet a day.

-- Jim Fuquay

The Barnett Shale's children

Which is bigger in the history of energy - the discovery of the East Texas Field in 1930 or the development of the Barnett Shale?

Robert Bryce, an author and Fellow at the free-market oriented Manhattan Institute, says the Barnett. At a Dallas meeting of electricity professionals today, Bryce offered this explanation: "The East Texas Field had no children. The Barnett Shale has children all over the world - the Haynesville the Marcellus," and similar shale formations elsewhere.
-- Jim Fuquay

Fort Worth air quality study finds exhaust issues at five compressor stations

Fort Worth City Councilman Jungus Jordan, who has started reviewing the city's air quality report, said the study by contractor Eastern Research Group has identified five compressor stations that have issues.

"There were five sites out of 388 tested that have some exhaust problems from compressor stations," said Jordan, who stressed that he was still making his way through the report. "We’re pretty confident that the best practices we’ve been preaching can address most, if not all, of the issues."

Best practices include vapor recovery systems, green completions  - a process used to recover gas that would otherwise be vented into the air - and low-bleed pneumatic valves that regulate gas flow and pressure.

Jordan, who is also vice chairman of the North Texas Clean Air Steering Committee, which has made recommendations to the state regarding North Texas air quality, said one possibility could be requiring use of electricity to power compressor stations.

The highly anticipated report is scheduled to be released to the public later today.

"It looks like no health alarms are identified at first blush," Jordan said. "But it is a very comprehensive report and I'm still going through it with a fine-tooth comb."

--Bill Hanna

Fort Worth air quality study to be released on Thursday

The release of Fort Worth's Air Quality Study, which has been delayed twice, will have to wait one more day to be released to the public. City spokesman Jason Lamers said the city finally received the 300-page report from consultant, Eastern Research Group, on Wednesday afternoon. But city officials will now comb through the report's findings with the plan of releasing it on Thursday. "Staff has begun to read the report, and our goal is to have at least the main body of the report posted online by tomorrow, as promised," said Lamers who cautioned it may not be posted until sometime on Thursday afternoon. The report, which cost the city more than $1 million, is expected to be the most complete study of Barnett Shale emissions to date.

Bill Hanna 

NPR visits the Barnett Shale

National Public Radio, which had sent a  crew to Tarrant County to report on the Barnett Shale a couple of weeks ago, aired its report Tuesday afternoon. If you missed it on 90.1-KERA, just click here and you'll be right up to speed. There's a written report, as well as a link to the broadcast item, which leads off with a reference to Chesapeake Energy's Tommy Lee Jones billboard.

-- Jim Fuquay

Q&A with the guy who first drilled the Barnett Shale

Here's Jim Fuquay's Q&A with George Mitchell, who drilled the first well in the Barnett Shale in 1981. Jim reports the well was a puny producer thatl took 17 years to become profitable, but led to the drilling boom that's seized the field today.

-- Scott Nishimura

(Photo: Mitchell, left, at a Fort Worth party in his honor this week)

Barnett Shale resources

CURIOUS ABOUT THE BARNETT SHALE? HERE ARE SOME USEFUL LINKS:

CORPORATE

Carrizo Oil and Gas

www.askchesapeake.com (Chesapeake Energy site)

Colt Exploration

Dale Resources

Fleet Oil and Gas

Harding Co.

Holland Acquisitions

Paloma Oil and Gas

Potestas Corp.

Western Production Co.

XTO Energy

DRILLING ORDINANCES

Arlington (includes city gas drilling resource page)

Bedford (city's gas drilling page, including ordinance and property owner Q&A)

Bedford  (city's comparison of provisions in several area drilling ordinances)

Colleyville (city web site)

Fort Worth (includes city gas drilling resource page)

Grapevine (Type "gas drilling" in the search bar to find the ordinance)

ECONOMIC IMPACT/ENVIRONMENTAL IMPACT

Barnett Shale Economic Impact Study, Ray Perryman, 2007

The Economic and Fiscal Impacts of Devon Energy in Denton, Tarrant and Wise Counties, Bernard Weinstein and Terry Clower, University of North Texas, 2004

Public Perception of the Natural Gas Industry: Insights from Two Barnett Shale Counties, Sam Houston State University, 2007 (Johnson County results, Wise County results)

Credit FAQ: Why the Barnett Shale Gas Basin Could Benefit Texas Municipalities, Standard & Poor's, 2008

LEASE FORMS

Leases negotiated by the Berkeley Place, Ryan Place, Mistletoe Heights, and Tanglewood neighborhoods in Fort Worth

NEIGHBORHOODS

Arlington Neighborhood Network, City of Arlington site. Includes updated contact info.

Arlington neighborhoods, neighborhoodlink.com. Spotty, but includes some info, such as neighborhood association email addresses, that isn't on the city site.

Bedford neighborhood associations, City of Bedford site, includes updated contact info.

Benbrook neighborhood associations, City of Benbrook site. Includes updated contact info.

Colleyville neighborhood associations, City of Colleyville site, includes updated contact info.

Fort Worth neighborhood database, City of Fort Worth site. Includes updated contact info.

Grapevine homeowner associations. City of Grapevine site. Includes contact info.

Neighborhoodlink.com

ORGANIZATIONS

Barnett Shale Energy Education Council

Fort Worth League of Neighborhoods Gas Drilling Resource Page, including "Tips for Neighborhoods Negotiating Gas Leases."

FWCanDo (Fort Worth Citizens Against Gas Drilling Ordinance)

Texas Land and Mineral Association (represents mineral rights owner)

Trinitytrees.org

PUBLICATIONS

pegasusnews.com

Powell Barnett Shale Newsletter (paid subscription)

Real Estate Center at Texas A&M University (oil and gas publications)

texasinsider.org

GOVERNMENT

Railroad Commission of Texas, includes Barnett Shale resource page, information on regulations.

Tarrant County public records site (Includes lease/lease memo lookup so you can check out how many leases energy companies are filing in Tarrant County, and where.)

ROYALTY CALCULATOR

Fort Worth League of Neighborhoods gas resource drilling page

CONTINUING EDUCATION

TCU Energy Institute's Petroleum Land Practices Program

KNOW OF A GREAT LINK THAT'S NOT LISTED HERE? Let us know about it! snishimura@star-telegram.com