Shale Coverage

The New Albany Shale







  
Oil and gas industry production history in this diverse play
February 3, 2012

No two shale plays are the same. Shale can differ from region to region and within the same play. The rock within the New Albany in the Illinois Basin varies throughout the basin. This shale has been drilled for decades, but with horizontal drilling and fracturing, production is now possible.

The New Albany Shale formed about 350 million years ago in a shallow sea that once covered the eastern half of the U.S. It has a 100-foot thick pay zone of shale covered by gray-green shale, which distinguishes it from other plays. Currently, wells are 250 to 2,000 feet deep, and the gas extracted is a mixture of biogenic and thermogenic in origin. It contains up to 160 trillion cubic feet of in-place gas.

This was one of the first unconventional plays produced in the U.S. The rock that makes up the New Albany has natural fractures that complicate the hydraulic fracturing process. Despite this difficulty, booms were experienced in Illinois, Indiana and Kentucky—the three states that contain the New Albany.

History

The New Albany Shale is located in the Illinois Basin, which is contained within Southwestern Indiana, Wes-tern Kentucky and Illinois (except the northern-most part).

Drilling in the shale dates back to the 1800s when oil was accidentally discovered during drilling for saltwater. The saltwater was important to early settlers for preserving food and was also critical to the agricultural industry in the area. Once operators began drilling for oil, they discovered that natural gas was within the reservoirs, as well.

Illinois

The first drilling in Illinois occurred in 1853 with two wells near Champaign. Modest oil was also recovered in Clark County, Ill., in the 1860s. In 1866, the Clark County Petroleum and Mining Company set its headquarters in Marshall, Ill., and began drilling.

At this time, casings were not used, and water seepage prevented the deeper oil from making its way to the surface. Production was poor.

At the beginning of the 1900s, well casings began to be used, solving the water issues. However, operators had no way to accurately know where to drill—hitting a reservoir was more a matter of luck.

In the 1930s, seismic exploration was used to locate reservoirs. One target became anticlines farther beneath the surface because of historic success of locating oil with these formations closer to the surface. This new technology made finding these easier, and an oil boom began in Illinois that lasted through the 1940s and 1950s. Production rose to 147.6 barrels in 1940, the greatest volume in the history of Illinois production.

After World War II, production rates fell because all the easily tapped resources had been depleted, given the abilities of the available technology. During its boom, Illinois was one of the U.S.’s leading oil producers.

Kentucky & Indiana

Since the early 1860s, more than 500 wells have been drilled in Indiana and Kentucky’s sections of the New Albany Shale. The majority of the whole state’s natural gas and oil production has come from the eastern part of the state.

In Western Kentucky, production has occurred, as well. Exploration and production in the western half began in earnest following the Civil War. The first natural gas wells in Western Kentucky were drilled in Meade County between 1863 and 1865.

Then in 1919, an oil discovery in Hancock County began a boom for the state. As in other New Albany Shale areas, renewed interest has increased drilling during recent years.

In Southwest Indiana, early settlers’ search for saltwater became a discovery of oil and natural gas. Initial drilling was in Vigo, Sullivan, Pike, and Gibson Counties. Production began in earnest in the 1920s.

Natural gas was critical to the growth of industry in Indiana and was often offered as a free incentive to companies deciding where to build. Production peaked in 1956. Since then, the number of wells drilled and produced has dropped. The initial drop was due to the lowering of gas prices. Later, it was because of depleted reservoirs.

Renewed interest in the New Albany Shale began in the mid 1990s. More than 500 wells have been drilled in the play since then. This new interest began in Indiana in Harrison County and has now moved to many other nearby counties.

The new wells will tap the deeper reserves that could not be reached during the boom years because of the available drilling and stimulation technology.

Current New Albany Completions and Production

Recent production in the New Albany peaked in the middle 1990s, but with experimentations with new drilling and completion techniques, production is increasing. Originally, vertical drilling was employed, and some gas was extracted because of the natural fractures within the rock.

Today, some vertical drilling is still employed in the play. However, horizontal drilling is dominant.  Frac-turing involving water was not a viable possibility because of the clay-rich rock that adsorbed the water, preventing it from freeing trapped oil and gas. For this reason, fracturing in the play predominantly uses 100 percent nitrogen. This process is described in detail in Upstream Pumping Solutions’ Editorial Advisory Board Member Doug Walser’s article available here.