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Water’s role in the great shale shut-in

Water may have been a key factor in determining which wells have been shut in, but it could have a greater impact on operations once production comes back online.

Shale producers have shut in thousands of wells in response to the oil price crash and, though some have already come back online, most will not be restarted until Q3 or Q4 2020. Unconventional shut-ins are nothing new, but this wave of well closures – unprecedented both in scale and duration – raises many questions about what the long-term operational impacts may be. 

Operators have years of data and research on conventional shut-ins to inform evaluations of which wells to take offline and expectations for rebooting production. However, the industry has a much foggier idea of how to approach these activities in shale plays, which have only really been exploited over the past decade. Even more uncertain is what will happen with unconventional oil shut-ins, as the well closures of 2008 and 2014/15 were briefer and tended to include more gas producers.

“The current body of literature on unconventional well shut-ins is simply not adequate,” Nur Wijaya, a reservoir engineer and research fellow at Texas Tech University, told WiO. “This ‘great shale shut-in’ is an opportunity for the oil & gas industry to really understand how shale reservoirs behave. We’re going to see answers in at least one or two years.”

Experts do have some ideas about what operators can expect once unconventional wells are restarted, notably that they will likely generate more water than they had been before shut-in. This bodes well for the water services providers that can survive long enough to see their clients turn the taps back on. 

“If you’ve got existing wells with production equipment there, that production equipment may not be sized in such a way to deal with a large volume of water all at once,” consulting engineer and EPG Solutions president Eric Gagen told WiO, referring to oil-water separators and tanks. “There will probably be situations where people have to get flowback crews back out to deal with the slug of water and fluid that comes back just from the initial start-up.”

Another common notion is that oil & gas production rates should also be higher upon restart, but subsurface dynamics will play a role in well performance. The very reasons that lead operators to take wells offline may also determine long-term production impacts. With produced water management accounting for a large chunk of lease operating expenses, some operators have closed wells with higher water-to-oil ratios. Others have opted to shut in their best oil producers while they rode out depressed commodity prices. 

“Wells that produce a lot of water tend not to come back as quickly and easily as those which produce mostly oil and gas,” Gagen said, adding that lower-pressure wells would also face difficulties in starting up again. This is significant, given that most Permian shut-ins have occurred in under-pressured areas of the Midland Basin that produce a lot of water.

If unconventional wells do not initially have higher hydrocarbons production rates, it may indicate reservoir damage in the form of a water block. In this situation, completion water or aquifer water has leaked into the shale matrix and is impeding hydrocarbons flow. However, if higher oil & gas output is sustained, imbibition may be occurring, wherein water intake into the matrix can help force hydrocarbons out. Which of these behaviors will have the most impact depends on reservoir wettability. 

“If the reservoir is water-wet [as opposed to oil-wet], the water will very likely imbibe into the shale matrix,” Wijaya explained. He added that it is becoming more apparent that shale reservoirs have mixed wettability and studies have shown a range of wettability within basins. 

While this range is partially due to the lack of standardized workflows at different laboratories that conduct core analysis, it can also be due to the fact that the net effects of additives in hydraulic fracturing fluids need to be better understood. For example, surfactants tend to make reservoirs more water-wet, but others (like corrosion inhibitors) make them more oil-wet.

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