Many of the world’s mature producing regions still contain sizable volumes of potentially recoverable hydrocarbons, although these resources typically are in less conventional types of reservoirs. For instance, a recent report from the Interstate Oil and Gas Compact Commission estimates that the 180,000 sq mile Appalachian and 53,000 sq mile Illinois basins still contain 4.8 billion bbl of oil and 79-96 tcf of gas that can be recovered, primarily from coalbeds, Devonian shales, and low-permeability gas sands, as well as deeper formations.
Additionally, the report says regions such as the Appalachian basin of Kentucky may have 3-4 billion bbl of recoverable bitumen resources, and the eastern US has 400 billion bbl of oil shale that could be recovered with the application and development of new technologies. Technologies such as steam-assisted gravity drainage (SAGD) already are producing successfully the bitumen from oil sands in Canada, while downhole heating elements have potential for extracting hydrocarbons from oil shale.
The report notes that even though these basins are mature in terms of production from shallow formations at depths less than 6,000 ft, they are young in terms of production from horizons deeper than 15,000 ft. It adds that the industry has tested only 10-15% of the possible hydrocarbon-producing formations in the Appalachian basin and drilled only 11 wells deeper than 15,000 ft.Long history
The basins were the birthplace of the modern petroleum industry. Their oil production peaked in 1910, and the gas production started to decline in about 1930. Exceptions to the decline, the report notes, are coalbed methane production in Virginia, which has increased every year since starting in 1990, and Kentucky’s gas production, which reached a new peak in 2004 after bottoming out in 1983.
In 2004, average gas production in these states was 235 MMcfd in Virginia and 258 MMcfd in Kentucky.
The IOGCC report says salt miners first discovered oil in the basins by accident when in 1814 they struck oil in Ohio. The report notes that the first intentional attempt to find gas was in 1821 near Fredonia, NY, with a well drilled to 70 ft. The gas produced from this well supplied nearby businesses and street lamps and led to a proliferation of gas discoveries in the 1800s: in Pennsylvania in 1860, Ohio in 1861, and Kentucky in 1863.
Drilling for oil started in 1859 with Drake’s successful 70-ft well near Titusville, Pa. Successful oil wells followed in West Virginia in 1859, New York in 1865, Kentucky in 1865, Ohio in 1884, Indiana in 1886, and Illinois in 1904.
Cumulative production from the basins is more than 5 billion bbl of oil and 50 tcf of gas.
In 2004, the area had 117,936 active oil wells and 148,766 active gas wells producing 75,000 bo/d and 1.9 bcfd of gas.
Appalachian basin asset ownership is spread among thousands of independent operators along with a few midsized public independents and several large pipeline and utility companies.
The newer plays include the Trenton-Black River formations in New York and West Virginia, the coalbed gas throughout the regions, the New Albany shale in southern Indiana and northern Kentucky, oil discoveries in pinnacle reef formations, and tight gas sands such as the Clinton-Medina play.
Technology has helped develop the remaining resources. The IOGCC notes that operators in growing numbers are using 3D seismic to define stratigraphic traps in complex reservoirs and identify deep targets and reef plays. Horizontal and lateral drilling are other technologies that enable operators to produce such formations as the Trenton-Black River.
In the future, carbon dioxide injection holds promise to enhance recovery of the remaining oil in the basins, according to the report.New entrants
Activity in the region is set to increase as new companies enter the area. For instance, Chesapeake Energy Corp. recently announced the acquisition of 4.1 million net acres in the Appalachian region through its planned purchase of Columbia Natural Resources LLC (OGJ Online, Oct. 4, 2005). It estimates that the acreage contains 1.1 tcfe of proved reserves and 1.4 tcfe of probable and possible reserves and has identified 9,435 undrilled locations, which amounts to a 15-year drilling inventory.
Although the basins have a long production history, indications are that much is left over to produce.✦