The 7 Most Asked Questions about Unconventional Reservoirs

By George Slaughter

1. What are unconventional reservoirs?

Unconventional reservoirs are made up of rock with low permeability, making it nearly impossible for oil and gas to flow through the rock and to the well. Thanks to advances in technology, including horizontal drilling and hydraulic fracturing, unconventional reservoir exploration and development has become one of the most important activities in the energy industry today. This newfound abundance of economically recoverable hydrocarbons has improved North America’s energy outlook dramatically in only 10 years.

By contrast, conventional reservoirs have hydrocarbons within their small pores. Wells can be drilled in these small pores so the oil and gas can flow or be pumped easily to the surface.

2. How does industry develop unconditional reservoirs?

Before drilling a well, companies perform a geological analysis using proprietary and public data. They use this analysis to develop plans for drilling and completing the well. State regulators must approve the plans before drilling can begin.

When exploring and producing from unconventional reservoirs, companies use horizontal and directional drilling to draw oil and gas from a single location. When possible, companies drill multiple wells from a single drilling pad which reduces the equipment, roadways, and pipelines needed to complete a project.

After drilling a well to the desired depth, companies then use a technique called hydraulic fracturing, sometimes called fracking, to improve oil and gas recovery from the reservoir.

3. What is hydraulic fracturing?

Hydraulic fracturing is a process by which a highly pressurized mixture (99.5% water, the remainder chemical additives) creates a network of cracks in rock formations, which in turn makes oil and gas recovery easier. The process itself has been in use for more than 60 years.

4. What’s all the fuss about hydraulic fracturing? Can one pursue unconventional reservoir opportunities without it?

Hydraulic fracturing is an essential part of unconventional reservoir exploration and development. Yet it has become a political issue for some, in part because of regulatory issues, and in part because of movies such as Promised Land (2012), which portrayed hydraulic fracturing in a negative light.

Companies have taken action to address the concerns. For example, ConocoPhillips sponsors a website, www.powerincooperation.com, which describes the basic production processes and the worker and environmental protection principles ConocoPhillips follows.

Companies are also developing new water treatment technologies that enable water used for hydraulic fracturing to be reused. In this way, companies save money and leave a more transparent footprint. In one such case, a company recycled more than 300,000 barrels of produced water for hydraulic fracturing use at one site.

5. Where are the unconventional reservoirs?

Currently, the major unconventional reservoir opportunities are in North America. Texas is home to two of the more significant plays: Eagle Ford, in South Texas and the Permian Basin, in West Texas. Another play drawing much interest is Bakken, in North Dakota.

Companies are exploring global opportunities for unconventional reservoir development. Unconventional reservoir development activities are already taking place in Australia, Columbia, Chile, China, and Poland.

6. What are the biggest challenges for successful unconventional reservoir production?

The three biggest challenges involve monitoring significant development costs, navigating the political climate, and making the environmental footprint more transparent.

7. What does the future hold for unconventional reservoirs?

With improved technology enabling access to previously unconsidered reservoirs, it is no wonder why companies are exploring their options in unconventional reservoirs. The benefits from local production, both in terms of economics and reduced imports, seem obvious enough.

Yet there is still progress to be made. According to ConocoPhillips Chairman Ryan Lance, the revolution is “only in the first inning of a nine inning game.” He added that we have only “scratched the surface” to see how the technology will continue to unfold.[1]

[1] Adams, Mikalia. “ConocoPhillips CEO on Shale Boom: We’ve Only Scratched the Surface.” Oil & Gas Financial Journal, February 24, 2014, accessed at www.ogfj.com/articles/2014/02/conocophillips-ceo-on-shale-boom-weve-only-scratched-the-surface.html, on October 17, 2014.

About the Author

George Slaughter is a writer, editor, and content strategist. His web site is georgeslaughter.com.