Business Opportunities in the Utica Shale Play

Marcellus-Utica ShaleJim Scherrer
Scherrer Resources, Inc., Exton, Pa

 

The Utica Shale Appalachian Basin Exploration Consortium highlights the current business development opportunities that arise across the breadth of the Utica Shale fairway.

The oil and gas resources underlying the Marcellus from within the “Utica Shale” play have become better defined through the shale resource exploration and recovery operations of various exploration and production (E&P) companies. The geographic alignment is unique and now is better defined; offering opportunities for business development that aligns with the geography of the fairway.

Additionally, boundaries such as the “Line of Death” for economic quantities of oil and gas within the play have been better delineated.

Utica Shale

The “tiramisu model” of horizontal drilling in shale.

More recent test drilling within the Appalachian Basin below the Marcellus (Devonian Period), in stratigraphy generally known as the “Utica” (Ordovician Period), there has been a resurgence of activity as this carbon-rich play has yielded unexpected, very positive results.

This Utica formation assessment also includes the Point Pleasant formation. Taury Smith (NY State Geological Survey) says the Utica Shale play is more appropriately called the “Utica Shale and associated organic‐rich calcareous shale and interbedded limestone and shale play.”

This report relies on many sources, but primarily the Utica Shale Appalachian Basin Exploration Consortium (the Consortium). The 15 members of the Consortium were joined by individuals from four state geological surveys, two universities, one consulting company, the U.S. Geological Survey (USGS) and the Department of Energy’s (DOE) National Energy Technology Laboratory (NETL), who collectively comprised the Research Team members of the Consortium.

Utica Is Bigger Than Many Thought

The Utica Shale play could hold far more oil and gas than previously estimated, the US Department of Energy’s Fossil Energy Office (FOE) said this week (10/15/2015). If the play’s commercial potential could be realized, it could be, geographically, the nation’s largest gas field.

FOE said the two-year study, which West Virginia University led with financial support from DOE’s National Energy Technology Laboratories (NETL) and 14 industry members of the Utica Shale Appalachian Basin Exploration Consortium, estimates the Utica holds technically recoverable volumes of nearly 2 billion barrels (BBbls) of crude oil and 782 trillion cubic feet (Tcf) of gas. The results, which build upon previous estimates, far exceed the US Geological Survey’s 2012 assessment and highlight new potential for the Utica shale, FOE said.

Background

The Appalachian Oil and Natural Gas Research Consortium has led the way recently in definition of the resource play called the Utica Shale. They describe the play as neither “Utica” nor “shale” as it focuses on both the Utica and the Upper Point Pleasant formations; as interbedded limestone and organic-rich shale. Further, West Virginia University (WVU) is committed to expanding educationresearch and outreach on technical aspects of shale gas development and has a focus on innovations in system-wide control using operational and economic data to allow companies to be profitable in a competitive market.

This appears to be the first consortium to consider research on economically recoverable oil and gas from the play which would publish reports on their findings.

The “play book” incorporates and integrates results of research conducted at various granularities, ranging from basin-scale stratigraphy and architecture to the creation of nanoporosity as gas was generated from organic matter in the reservoir. Between these two end members, the research team has mapped the thickness and distribution of the Utica and Point Pleasant formations using well logs; determined favorable reservoir facies through an examination of outcrops, cores and samples at the macroscopic and microscopic scales; identified the source of the total organic carbon (TOC) component in the shales and estimated the maturation level of the TOC; and searched for reservoir porosity utilizing scanning electron microscopy (SEM) technology.

The study built on and continues what was learned when AONGRC compiled the Trenton-Black River Play Book. That study examined the stratigraphic interval from the base of the Black River up through the Trenton Limestone and the stratigraphically-equivalent Lexington Limestone.

However, it also included an examination of the upper Trenton time-equivalent Point Pleasant Formation that was deposited in a shallow depocenter located between the Trenton Platform to the north, extending from what is now Indiana to New York, and the Lexington Platform to the south, in what is now Kentucky, southwestern West Virginia and western Virginia.

Doing Business in the Utica Shale

Business development opportunities within the upstream, mid-stream and downstream supply chain exist over nearly the entire Utica Shale play, with the exception of the “immature” and the “over mature” regions found on the western and eastern boundaries, respectively.

The “north south” alignment of the oil-, wet gas-, and dry gas- fields offer unique business development opportunities in each of the up-, mid- and down-stream business markets.

Some unique opportunities could include:

Utica Shale

The figure below shows the Conodont alteration is likely to hold for quite some time.

Utica Shale

The forces which created the coal seams that are abundant on the eastern region have “baked out” the free oil and gas.

Geologists and gas companies know the area directly around the Lackawanna Syncline (the banana-shaped formation that runs through Luzerne and Lackawanna counties), where the bulk of the region’s famous anthracite is found, is likely to be unproductive because the high temperatures and pressure that hardened the coal also drove the gas out of the carbon-rich shale.

Additionally, the under-maturation of the formation on the western front limits development to mid-Ohio. New York boundaries are constrained by the “fracking moratorium”, while southern boundaries are delineated by the Appalachian mountain range.

The Utica Detail

Near the end of Trenton time, while relatively clean carbonates were being deposited on the platforms, a mixture of clastic muds and carbonates was being deposited in the intra-platform basin, creating the Logana Shale Member of the Lexington/Trenton Formation, and the younger Point Pleasant Formation above the Lexington/Trenton, which was succeeded by deposition of the darker, but not necessarily more organic-rich Utica Shale.

  • The Utica Shale was deposited in the upper Ordovician Period (covers the time between 485 and 444 million years ago).
  • It is below the Marcellus of Devonian period (covers the time period between 410 million years ago to 354 million years ago) and separated by the Silurian Period (440 – 410 million years ago) in between.
  • It is above the Trenton Limestone, and often includes the Point Pleasant formation.

An in-depth study in Eastern Ohio and Western Pennsylvania found the following (from abstract):

”Approximately 500 well logs and three cores from eastern Ohio, western Pennsylvania, and northern West Virginia are used to construct a depositional model of the Utica Shale and associated Upper Ordovician strata.

Previous studies of outcrop data from the Cincinnati arch and Jessamine dome recognized a number of Late Mohawkian to Early Cincinnatian third-order sequences deposited in an active foreland basin during onset of the Taconic orogeny. Sequences consist of deepening upward successions of transgressive limestone and shale, recording a period of sustained subsidence and increasing sea-level along the eastern margin of North America.

The transition from a carbonate dominated system to a clastic dominated system reflects the collapse and drowning of a widespread carbonate platform. The Trenton/Lexington Limestone through Utica Shale comprise the transgressive systems tract (TST) of a large second-order sequence, superimposed with four, smaller scale third-order composite sequences. Third order sequences are regionally correlative, aggradational, and lack low-stand deposits. Sequences are separated by type 3 sequence boundaries that amalgamate with transgressive surfaces and separate underlying highstand system tracts (HST’s) from overlying TST’s.

Chronostratigraphic surfaces demonstrate that basinal interbedded lime mudstone, shale, and marl facies of the Logana and Point Pleasant formations are contemporaneous and genetically related to platform limestone on the flanking Trenton and Lexington platforms. Isopach thickness maps of composite sequences indicate significant accumulation of carbonate sediment and build-up of the platforms during the Late Mohawkian, followed by increased clastic sedimentation and basin fill in the cross-strike Sebree trough and Point Pleasant subbasin during the Early Cincinnatian.”

Utica Shale

Utica underlies most counties in PA, except Southeastern Pennsylvania (SEPA)

Utica Shale

Utica falls in the Late Ordovician that covers the time between 485 and 444 million years ago.

Utica Shale

Above: Utica with underlying (earlier deposited) Trenton Formation limestone

Utica Shale

Elevation to the base of the Utica shows deepest are found easterly, while shallowest are northwesterly.

The Utica Shale was deposited in the Ordovician Period (covers the time between 485 and 444 million years ago) and is below the Marcellus of Devonian period (covers the time period between 410 million years ago to 354 million years ago) and separated by the Silurian Period (440 – 410 million years ago) in between.

Utica Shale

Thickness of the Utica

The thickness of the Utica Shale is variable. Throughout most of its extent, it ranges in thickness from less than 100 feet to over 500 feet. Thickest areas are on the eastern side of its extent, and it generally thins to the northwest. A thickness map of the Utica Shale is shown as Figure 6 in the right column of this page. Although thickness of a rock unit is important in determining its oil and gas potential, the organic content, thermal maturity and other characteristics must all be favorable.

utica shale

Geologic Cross section aligned North to South Cross section starting with Lee Mountain (north) to Interstate Route 80, with Susquehanna River and Berwick, PA in mid-point.

Utica Shale

utica shale

The Utica formation has a fairly uniform name throughout, but in New York State is called the Upper Indian Castle Shale.

The Eastern-most region consistently shows as “Overmature” (baked out) overheated, while the Western-most region consistently shows as “Immature”.

utica shale

Generally, few Utica targeted wells are drilled in the southeastern area of Pennsylvania

utica shale

Left to right, the Utica sits atop the Limestone carbonates of the Ordovician

Utica shale

Point Pleasant pinches out in Luzern County, leaving Utica Only further east and southeast.

Utica shale

An isopach map illustrates thickness variations within a tabular unit, layer or stratum. Isopachs are contour lines of equal thickness over an area. The Utica and Point Pleasant are about 0-500 feet thick on the southeastern edge (blue and green)

utica shale

utica shale

Depth to base is approximately 7,000 feet of drilling depth in Luzern County

utica shale

utica shale

Eastern regional Utica shows good TOC and good hydrocarbon indications.

utica shale

Map of conodont alteration index (CAI) for the Utica Oil and Gas Assessment Units

Conodont alteration shows overheated formation and the over-mature situation.

Conodont elements are used as paleo-thermometers, a proxy for thermal alteration in the host rock, because under higher temperatures, the phosphate undergoes predictable and permanent color changes, measured with the conodont alteration index. This has made them useful for petroleum exploration where they are known, in rocks dating from the Cambrian to the Late Triassic.

The Conodont Alteration Index (CAI) is used to estimate the maximum temperature reached by a sedimentary rock using thermal alteration of conodont fossils. Conodonts in fossiliferous carbonates are prepared by dissolving the matrix with acid, since the conodonts are composed of apatite and thus do not dissolve. The fossils are then compared to the index under a microscope.

The Conodont Alteration Index (CAI) ranges from 1 to 6, as follows:

CAI

The CAI is commonly used by paleontologists due to its ease of measurement and the abundance of Conodonta throughout marine carbonates of the Paleozoic. However, the organism disappears from the fossil record after the Triassic period, so the CAI is not available to analyze rocks younger than 200 million years. Additionally, the index can be positively skewed in regions of hydrothermal alteration.

utica shale

High TOC on eastern edge.

utica shale

High TOC on eastern edge.

utica shale

Average TOC very good.

utica shale

Abandoned Marcellus Wells

All the Marcellus wells have been plugged and abandoned on the south-eastern edge.

utica shale

Illustration of the technology being used as a means of educating the public in reference to horizontal drilling in shale fields.

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