US oil and gas fields have seen a surge in both production and productivity in recent years. In 2015 more than half of US natural gas production came from shale, and this is projected to more than double by 2040 (EIA). Hydraulic fracturing was first used on a significant scale in 1980s, on the Barnett gas formation in Texas. Horizontal drilling was pioneered between 2005 and 2008, and the technique soon spread to Fayetteville (Arkansas) and Haynesville (Louisiana). Since then the industry has never looked back. Barnett was not the first shale gas play, but it was the first in which deeper formations of up to 8,000 feet were successfully exploited.
The next manifestation of the gas rush was the Marcellus formation, located in the Appalachians, conveniently close to the populated east-coast regions. It is the USA’s largest gas resource and the second largest gas field in the world. Production there has been surging since 2008, and directional drilling is usual to depths of around 7,000 to 10,000 feet. Among the companies active there are Chesapeake, Norway’s Statoil and pipeline maker Kinder Morgan.
At roughly the same time, production took off at other sites, notably Haynesville and Utica. At Haynesville, Cubic Energy made a significant discovery in 2006, after which Chesapeake made heavy investments. Utica straddles the US-Canadian border, extending over Ohio, NY State and Quebec. Drilling in Quebec started in 2006, but it was in Ohio that production got under way, between 2011 and 2013. In 2016 Halliburton and Eclipse Resources completed the “Purple Hayes” well, thought to be the longest horizontal well, with a lateral length of over 18,500 ft. and a total depth of 27,046 ft. including the lateral extension. Halliburton’s dual-fuel Q10 pumps were used on the project.
The Haynesville Shale, which straddles Louisiana and Texas, has been producing gas since 1905, but modern shale gas activity was triggered by a discovery drilled by Cubic Energy in 2007. Chesapeake drilled its first well in 2008, and in 2016 improved completions designs led to a more than 250% increase in 90-day production. Eagle Ford is another significant source of shale gas (plus oil and natural gas liquids) in Texas.
Canada has been producing shale gas since 2008. It is projected to account for almost 30% of the country’s natural gas production by 2040. Resources include the Cardium, Duvernay, Montney and Viking formations in Alberta, the Bakken formation in Saskatchewan, and the Montney and Horn River formations in British Columbia.
The Bakken formation (Albert and Saskatchewan) has been home to an shale oil and gas boom since 2009, and has brought record growth and population increase to the region. The Montney shale is a major oil, natural gas and natural gas liquids resource, thought to be larger than Marcellus. Its potential sources are estimated to be equivalent to 145 years of Canada’s 2012 consumption. Operators include Progress Energy Canada (a subsidiary of Petronas), Shell, Murphy, ARC Resources and Encana. This field will certainly prove to be a key supplier to the North American market, and development is only just getting under way. But there is more: the Liard basin, spanning British Columbia, Yukon and Northwest Territories is thought to be Canada’s second largest known gas resource.
South of the US border lies the Mexican Burgos shale region, actually an extension of Texas’s Eagle Ford. The country is hoping to develop this resource to reverse a decline in hydrocarbon production, and its government has overseen an number of bidding rounds.
Argentina, after the USA and Canada, is the third country to develop tight oil and gas. Shale gas production is increasing rapidly, and there are hopes that Argentina will cease to import LNG by 2022. According to the EIA, shale production is set to account for 40% of gas production by 2040. The largest field is Vaca Muerta in Patagonia, where the national company YPF has formed joint ventures with Chevron, Dow Chemical and Petronas. Recently production has been lagging because of low prices, but in January 2017 an ambitious deal was struck between industry, government and unions which, it is hoped, will revive the industry.
The world’s major oil and gas companies are flocking to Argentina to give the “dead cow” a new lease of life. These include YPF, Total, Wintershall and BP’s Pan American Energy, who have just banded together to invest USD 1.15 billion in Vaca Muerta.