Eagle Ford EOR: the big squeeze

3 July 2017
03 July 2017, Week 25, Issue 464

EOG Resources is pioneering the use of EOR in the Eagle Ford shale, and while results are favourable, other operators hoping to harness such techniques in shale plays will face considerable challenges, writes Sam Wright

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Eagle Ford

What: EOG Resources is stepping up the use of EOR methods in the Eagle Ford.

Why: Shale drillers are looking at different ways to boost recoveries, which remain comparatively low in unconventional plays.

What next: EOG is implementing a 100-well EOR plan across six different areas of its Eastern Eagle Ford acreage this year.

 

US independent EOG Resources, one of the country’s most prolific shale drillers, is ramping up its enhanced oilfield recovery (EOR) project in the Eagle Ford shale. The company is at the forefront of efforts to employ EOR techniques in shale. As encouraging as results have been, though, producers hoping to roll out similar technology across other shale places will face considerable challenges.  

Slow recovery

Against the backdrop of depressed oil prices over the past three years and increased competition, the US shale industry has remained resilient thanks to a combination of cost-cutting and improved technology. While recovery rates have improved as a result of such efforts, they remain relatively low for shale wells compared with their conventional counterparts.

Though shale drillers are continuing to pursue efforts to boost recoveries, this is proving to be a challenging process. EOG is leading the way in using EOR techniques at its acreage in the Eagle Ford to deliver exceptional recovery rates from its wells. 

“On a typical well, we expect to produce 30-70% more oil with EOR than with primary recovery,” EOG spokesman John Wagner told NewsBase Intelligence (NBI). 

Previously, EOG has said that its costs for EOR in the region are roughly US$6 per barrel, or around US$1 million per well. This number, said Wagner, “includes readily available natural gas, which we produce, and not much else”. Government tax credits for EOR projects, which include those in shale plays, help to relieve the financial burden even further.

Historically, conventional EOR processes typically involve separate injector and producer wells with floods of gas, carbon dioxide (CO2), water or steam. Conventional formations are more permeable than shale formations, allowing the fluids to flow more efficiently through the rock from the injector wells to the producer wells, displacing oil along the way.

Unusual environment

Conventional EOR methods are not well-suited to use in shale formations. The Eagle Ford play is unique, though, because it has strong pressure containment both horizontally and vertically, noted Wagner. Low permeability provides strong horizontal containment, while the formations above and below the Eagle Ford provide strong vertical containment. For EOG, this has made the play an ideal testing ground for its methods. 

This year, the company is implementing a 100-well plan across six different areas of its Eastern Eagle Ford acreage. No details of plans for 2018 have been provided, although given the low costs involved and the fact that each successive pilot has grown in size, a further ramp-up in EOR activity could be on the cards for the company. 

As for the technology itself, EOG’s system is proprietary, and the firm has therefore been cautious about revealing its methods, especially as the system is believed to be the first successful shale EOR pilot in the country. However, Wagner did confirm that natural gas is used to re-pressurise the fields rather than the traditional injector-producer model of EOR.

“We have not revealed a lot of details, but we have said that we are using readily available field gas in a miscible process, where gas dissolves in oil downhole forming a homogenous mixture, that the infrastructure and facilities put in place during primary development are key to executing EOR, and that production responds to the process quickly – within 2-3 months,” he said.

Taking risks 

This kind of innovation has been one of the US shale industry’s defining characteristics over the past decade. In part, this has been achieved with government backing, both in the form of tax breaks and support in research and development. However, the latter is now under threat, with the US Department of Energy’s (DoE) Office of Fossil Energy (OFE) facing heavy funding cuts under US President Donald Trump’s proposed budget plan.

The OFE has invested US$137 million into shale drilling research over the past 20 years. While this may seem a relatively small sum, all of its data and technology have been free to use for any company, resulting in a resource that has done much to help grow the industry. Its current projects include ongoing studies into subsurface analysis, aimed at improving recovery rates while lessening any possible environmental impact. 

For many smaller drillers without their own R&D budgets, cuts to OFE funding could be a major blow. But in the case of EOR in shale plays, even larger operators with higher R&D budgets have struggled to get their projects off the ground.

“[Majors] have an advantage in the sheer amount of capital they can internally deploy to the basins to get their programmes to scale, but this comes with some trade-offs,” said Wagner.

Organisationally, these firms are less nimble and centrally run, leading to slower decisions and higher development costs. Also, new movers in any basin need to organise their supply chains to operate cost-effectively. In the Permian, this involves water and sand sourcing, as well as product marketing and takeaway. It can be difficult for any new mover to overcome the existing entrants to achieve profitable agreements with suppliers and purchasers.

EOG, however, seems to be thriving in the middle ground. “We have a culture that encourages experimentation and intelligent risk-taking,” Wagner said. “As we have realised success with EOR, we have followed with larger pilots and continued to improve the process.”

Despite this positivity, for now it seems though that the process is limited to the Eagle Ford because of its superior pressure containment. Wagner said that while it was too early to quantify scale across the entire Eagle Ford, EOG could say that all of its pilots, which have been performed across different geographic and geologic settings, have been successful. While progress is still at a very early stage, the company’s results suggest that EOR can be a viable concept for the shale industry, and one that could make a major difference to recovery rates if it is harnessed effectively.

 

Edited by

Anna Kachkova

Editor

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