Fracing, CSG, Water Management, Shale Gas information

Water Management

To date, Icon Energy's sole focus in ATP626P has been Coal Seam Gas (CSG) wells. Large amounts of water can be associated with the production of CSG, this fluid can range dramatically in water quality ranging from potable water, to water requiring treatment before usage or injection back into an aquifer. Water must be produced from the coal seam to lower the Hydrostatic pressures in the coals, the process of lowering the pressures to induce gas production from the Coals is referred to as de-watering. Water is typically only produced in the first stages of production and begins to abate with the onset of free gas production from the coals.

Currently the legislation in Queensland requires that any water produced from a CSG pilot must be treated, re-used or injected and must be within the quality standards for the particular usage that it is intended for. Additionally current legislation in Queensland requires that every wellbore within a one kilometer radius of an active CSG well must be surveyed and a chemical analysis done and then subsequently monitored for increases and decreases of water level and diminishment of water quality.

A water management plan involving potential usage for water produced must be written by the operator and approved by the DERM. Normally a hierarchy of usage for produced water is constructed where varying amounts of treatment from a CSG project may be utilized for individual purposes. For example CSG water may be utilized without any treatment as a source of drill water, water for cementing casing strings, dust suppression (assuming that certain minimal water standards are met) and no heavy metals are present in the produced water. Another tier of water usage which may require minimal treatment might be water for irrigation and stock water. While the third tier would consist of full treatment of water to drinking standards and suitable for re-injection into aquifers.

Shale Gas

Shale gas is unconventional gas recovered from formations which are classified as shales due to the particle size of the rock fabric. Normally these shales contain small fractions of clay, high total organic carbon (three to five percent content) but have very little native permeability (or flow conductivity) and are typically overpressured. These shale gas formations typically require horizontal drilling, and multiple stages of fracturing in the horizontal leg to produce at economic gas production rates. These formations until recently have been thought to be uneconomic to produce at commercial rates. However in North America economic shale gas production has become a reality over the past decade with additional shale gas prospects and trends in new basin areas continually being added to exploitable shale gas production. Improvements in horizontal drilling and the ability to fracture horizontal wells to induce economic production rates have contributed to the success of shale gas production in the United States. These unconventional shale gas targets contain very large amounts of gas in place, and continued new drilling to sustain gas deliverability is a requirement.

Fraccing

'Fraccing' is shortened terminology for “Hydraulic Fracture Stimulation” and is the process of inducing a fracture in vertical or horizontal wells and propping the fracture open with sand or another proppant to keep the fracture open and introduce a more permeable path to the wellbore. Unconventional shales or tight gas sands will almost always require this completion method to stimulate the rock so that economic production rates will result from the stimulation. Fracture of the formation is induced by pressurising fluids to the point at which the pressure will force open the formation rock. Then a proppant such as sand, boxite, or manmade beads are pumped to fill the fractures and keep them open countering the forces to close them such as overburden pressure. This proppant will form a permeability path into the wellbore to enable fluids to flow from the fracture created into the wellbore and up through the tubing to the surface. Care must be taken to ensure that the integrity of subsurface aquifers is not compromised during the fracturing procedure. To insure that the aquifer integrity is maintained operators must ensure that:

1. Vertical separation between the aquifer and any fluid induced fracture is sufficient to prevent cross flow between the hydrocarbons and the waters contained within the aquifer.

2. That cement integrity between the hydrocarbon zones and water bearing zones is sufficient to ensure zonal isolation which is accomplished by checking the integrity of the cement with Cement Bond Logs.

Icon Energy adopts similar methods employed in the United States where hydraulic fracturing and stimulating has been successfully performed there without risk to public drinking water for over 50 years. There has been much concern in the press regarding the use of fracturing fluids with BTEX or Benzene, Toluene, Elthylbenzene, and xylene. Icon Energy does not use these chemicals and instead uses “slick” water or water with no viscosifying additives thus eliminating this potential hazard from all Icon Energy operations.