1. Techniques and Technology in the Evaluation of Unconventional Shale Gas Resources Robert S. Kuchinski Weatherford Oil Tool Middle East 3rd India Unconventional Gas Forum (IUGF) - 2013 Mumbai, India January 18, 2013

2. 2 I would like to express my gratitude to the following organizations for making this presentation possible: –The organizers of the 3rd India Unconventional Gas Forum (IUGF) - 2013 –Weatherford India Acknowledgements

3. Not all shale reservoirs are alike Must understand core area of shale play Completion costs consume 50 to 60% of well costs…and rising Continuous learning thru data acquisition at every phase of well life is essential to maximize recovery from these reservoirs 3 Key Learning’s from North America

4. Unconventional: Satisfaction Survey Source: Welling & Company SHARE OF FRAC JOBS NOT MEETING PERFORMANCE EXPECTATIONS

5. Root Cause to Challenges in Unconventional Exploitation ROOT CAUSE OF FRAC JOBS NOT MEETING PERFORMANCE EXPECTATIONS Source: Welling & Company

6. Shale Fabric Analysis Ultra-Thin Sections 2D Nano-Scale Imaging Elemental Fabric Mapping “Shale Reservoirs have large variation”

7. 7 Evaluation of Unconventional Resources Gus Archie 1907-1978 Increasing Gamma Ray Increasing Intragranular Porosity Intergranular Porosity and disassociation between rock and fluid

8. 8 Evaluation of Unconventional Resources Clean Gas Sandstone Minimal Clay Higher Energy Depositional Environment Coarse grained -Well Sorted Favorable Porosity and Permeability Diagenesis can limit K Log evaluation based on the disassociation between fluid and rock Unconventional Clastic Gas Variable Clay Content Log evaluation not useful for fluid determination Rocks required to complete analysis Rocks and fluid associated Shaley Gas Sandstone Finer grain size and presence of clay reduce K Clay content disrupts Sw Calculation Sw equations modified to cope with clay Logs required for mechanical properties Hydraulic fracturing becomes be necessary Diagenesis can limit K and mineralogy

9. Critical to Understand the Resource Quality and to be able to grade it. –What is extent of the Core Area? The Arial sweet spot Highest concentration of gas Most productive Lowest cost to develop Most valuable –What other areas are productive? Gas concentration and Productivity vs. Core Area? –What is the extent of the fringe area? What is Gas concentration and Productivity? 9 The Core Area

10. 10 2011 Shale AFE Breakdown 10,500’ TVD 14,100’ MD 3,600’ Lateral 12 Stages

11. 11 10,500’ TVD 15,500’ MD 5,000’ Lateral 16 Stages 2012 Shale AFE Breakdown

12. Resource Play Formation Evaluation Uranium content  TOC Elemental analysis  Brittleness evaluation Detailed gas composition  Delineates top and bottom of reservoir DTS and DTC  Geomechanical Attributes Borehole image  Natural fracture network Rock Properties  Organic richness and Gas in place Hydraulic Frac extent  Productivity index Extensive core in labs and cutting evaluation in labs at wellsite while drilling Key Parameters Key downhole logging measurements

13. TOC Measures the present day organic richness of a rock Empirical relationship to Uranium content Maturation parameters are indicative of the maximum paleo- temperature that a source rock has reached The standard for maturity reporting is Vitrinite Reflectance (% Ro) QualityTOC (wt%) Poor<0.5 Fair0.5 to 1 Good1 to 2 Very good2 to 4 Excellent>4 Vitrinite Reflectance (Ro) Immature<0.6% Oil Window0.6-1.1% Wet Gas Window1.1-1.4% Dry Gas Window1.4-~3.2% Gas Destruction>~3.2% Shale As a Reservoir Rock Ro > 1.5%: This level avoids unfavorable relative permeability effects caused by oil blocking small pore throats and permeability TOC > 2.0%: This level allows for the generation of abundant gas GRI Devonian Study: Uranium vs. Kerogen (TOC)

14. 14 The Shale’s of India Source Oil & Maritine Journal by Dr. V.K. Rao

15. In addition to Knowledge of TOC and RO….favorable Reservoir Properties must be present: –Porosity > 3% –High reservoir pressure Pack in more gas Keep fractures open –Favorable In Situ Stress Influences the permeability and the response to hydraulic fracturing Understanding the mineralogy is essential to understand brittleness 15 Shale As a Reservoir Rock

16. Identification of Ductile Zones from Mineralogy 16 Initiation of a frac proved unsuccessful in this zone with >50% clays Clays 1 sample per 20’ MINERALOGY Quartz Carbonates Clays Others TPH / TOC (0-10) S1 S2 TOC

17. 17 Events located by horizontal and vertical arrays. Treatment Well 8- 12 Treatment and Observation Well 1-12 Treatment Well 16-1 Microseismic ……. to Improve Frac Program Design Understanding Fracture Growth…..

18. Second most important item next to establishing core area Need relentless pursuit of efficiencies and cost reductions Shale plays will require thousands of wells drilled over decades Must first establish the most efficient manufacturing design Early attention to best practices, appropriate to the specific shale play and emphasis on continuous learning are key Development of effective multidisciplinary teams 18 Continuous Learning

19. Summary Variability of shale is a fundamental controlling factor on weather a shale deposit will produce economic quantities of natural gas. Variations within a shale deposit will determine the core area of a shale play and thus the value assigned to different locations within a shale play. Following a process of “Good Science” allows for “Good Engineering” throughout the various stages of a shale project. Continuous learning and refinement is a must in order to maintain economic viability.

20. 20 Questions ???