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Oil and gas industry turns attention to Upper Devonian shale formation



Published: Tue, August 6, 2013 @ 12:05 a.m.

Companies in Ohio, Pa. try to determine Upper Devonian’s potential as a shale play

By Jamison Cocklin

jcocklin@vindy.com

YOUNGSTOWN

A mix of organic-rich shale and sandstone rock above the Marcellus formation, first tapped for natural gas in the early 1800s, is once again gaining the attention of exploration and production companies operating in both Ohio and Pennsylvania.

Last month, Pittsburgh-based EQT Corp. and Consol Energy announced the completion of horizontal wells in the Upper Devonian shale formation in southwestern Pennsylvania. They join Rex Energy of State College, Pa., which drilled its first Upper Devonian well in Butler County, Pa., last year, and Texas-based Range Resources, which drilled its first in 2009.

Drilling in the Upper Devonian isn’t poised to take off anytime soon. The formation has long been thought to hold a cache of dry natural gas. Last week, the commodity slid to its lowest price in more than five months on word from the U.S. Energy Information Administration that supplies had spiked, driving it well below $4 per million British thermal units.

However, exploration and production companies, better equipped to unleash oil and gas trapped in the impermeable rock underground with horizontal hydraulic fracturing, have been keenly aware of the Upper Devonian’s presence in Pennsylvania, Ohio and West Virginia.

An increasing number of those companies have been exploring the formation with well-log data, careful analysis and mapping to determine its potential as an emerging play.

“This is important for them. It represents a significant addition to their reserves,” said Terry Engelder, professor of geosciences at Penn State University. “It’s important to all three of the latest companies. With the acreage and well pads established across the Marcellus, the Upper Devonian represents an additional resource.”

At about 6,000 feet underground, the Upper Devonian lies above the Marcellus formation, which is part of the Middle Devonian. The sediments that make up the Middle and Upper Devonian were deposited in broad intercontinental seas roughly 390 million years ago. The Utica formation is older and deeper. It lies about 8,000 feet underground, and it was formed roughly 450 million years ago.

As organic matter is buried and rock begins to form, it is exposed to varying pressures and temperatures at different depths. The rock’s thermal state determines its oil and gas content over time.

Deeper rock at higher temperatures can actually be cooked to the point where all of its oil and gas are depleted.

Engelder said it’s possible that because the Upper Devonian is shallower, it could be in a liquid-rich window. Natural-gas liquids are more valuable at the moment. They can be used to make premium products such as plastics, and oil is priced far higher than natural gas.

Still, only about 20 horizontal wells have been drilled in the Upper Devonian in Pennsylvania, with most producing dry gas; more exploration will be required for the industry to gauge what exactly the formation can produce.

By comparison, thousands of wells have been drilled in the Marcellus and hundreds have been drilled in the Utica.

“The [Upper Devonian] seems like it could be prolific, but there doesn’t appear to be a ton of liquids,” said Will Green, an energy analyst at the investment bank Stephens. “It’s mostly dry gas from what I’ve seen. What’s nice about the Utica is you’re getting liquids and good margin wells. We’ll keep an eye on the Devonian, but we’re more concerned with the Marcellus and Utica.”

At a presentation last October, Jared M. VanMeter, a geologist at Range Resources, called the Upper Devonian a “viable play.”

Engelder said the formation consists of six rock layers that hold “shale gas potential.” At the time of VanMeter’s presentation, Range had identified three of those formations — the Burkett, the Rhinestreet and the Middlesex — as having the potential for exploration and production.

Consol drilled its Upper Devonian well into the Burkett, the deepest layer in the formation. The Burkett does not extend into Ohio, but the Rhinestreet and Middlesex could be a potential target for operators here.

Thomas Stewart, executive vice president of the Ohio Oil and Gas Association, said there hasn’t been nearly as much Upper Devonian activity in Ohio as there has been in Pennsylvania. It’s mostly just tests thus far, he said.

In the 1970s and ’80s, though, Stewart said “there was a frenzy of drilling into the Devonian.” In those days, operators drilled vertical wells straight down through multiple formations to extract oil and gas from each.

“Over time, oil and gas companies have drilled 30 different formations that have produced oil and gas from shallow wells at 50 feet, to those as deep as 9,000 feet,” Stewart said. “There are lots of opportunities here and multiple targets, but better technology is the key today.”


Comments

1glbtactivist(245 comments)posted 1 year ago

They lied to the local government and said they would only be going to the deep shale deposits. Our water would be perfectly safe. Well, now we know they can not be trusted. They will destroy our water supply, then move out of town. Taking their billions in profit from selling our gas supplies to foreign countries. Another rip off by the billionaire oil industry.

Suggest removal:

2Gman(46 comments)posted 1 year ago

@glbactivist,
"... They lied to the local government ..."
.
"... They will destroy our water supply ..."
.
You lie !

Suggest removal:


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