A consortium consisting of Michigan Technological University, Western Michigan University, and Jordan Development Company, LLC of Traverse City, MI, is collaborating to develop and test a new horizontal drilling strategy for satisfying environmental restrictions that currently place large tracts of prospective Antrim Shale acreage in the Michigan Basin off-limits to exploration and production.

Michigan Technological University, Houghton, MI
Western Michigan University, Kalamazoo, MI
Jordan Development Company, LLC, Traverse City, MI

The Antrim Shale in Northern Michigan has been a very prolific unconventional gas producing horizon, having yielded 2.4 tcf to date. As the play has matured, efforts have been made by producers to extend the producing acreage into regions that are more challenging to gas development. A great deal of potentially productive shale lies within areas that are off-limits to gas development due to surface constraints such as topography, wetlands, or housing. Northern Michigan has become a desired area for vacation and retirement living, resulting in high-priced real estate that commingles with the fairway of the Antrim Shale play. In addition to the surface constraints on Antrim Shale development, the Michigan Department of Environmental Quality (MDEQ) requires that 100 ft of surface casing be set into bedrock below the surficial glacial drift for all drilling. This requirement is in effect to protect groundwater resources within the glacial drift. In addition to this requirement, fracture stimulation cannot be conducted within 50 ft of the base of the surface casing string. Fracture stimulation is a vital step in improving the deliverability of wells to a point that they are commercial producers. As a result of these regulations, a vast amount of productive Antrim shale can neither be accessed nor completed in a conventional manner. State casing statute Instruction 1-94 presently eliminates much rock that is virtually certain to be productive in the Antrim Formation. Less than 50 percent of the Antrim Formation has been drilled to date, with large areas to the north and northwest of the heavily drilled area void of wells. This is largely due to the restrictions in Instruction 1-94. The project performers’ proposed solution is to drill a horizontal well offset from the target, cement and case the vertical leg as required by the regulations, then penetrate the target with a lateral offset.

Results 
Work on this project is in the second stage, with it having started in October 2006. On December 14, 2006, permit number 58153 was issued by the State of Michigan Department of Environmental Quality to Jordan Development Company, LLC, to drill and operate the natural gas well, AG-A-Ming 4-12 HD and HD1 in the Antrim Formation (API numbers 21-009-58153-00-00 and 21-009-58153-01-00,Figure 1A). In December 2007, a request was sent to the DOE to substitute the State Colfax #3-28 HD in Benzie County (Figure 1B) for the AG-A-Ming 4-12 HD well since right-of-way problems precluded timely drilling of the AG-A Ming 4-12 HD. There were two main objectives for this project. One involved compliance with Michigan well site regulation embodied in Instruction 1-94 (Appendix 1) and a second involving using a new horizontal “J” well design (Figure 2) to recover gas from previously off-limit acreage in the Antrim Formation. Both objectives have essentially been achieved in this past year: the

Regulatory task has been completely resolved and the originally proposed design of the “J” well has been tested in the field, although not at the proposed demonstration site. Consequently, all that remains of the field tasks is to drill the demonstration well with a revised configuration. Substitution of the Colfax #3-28 HD for the AG-A-Ming 4-12 HD well will not affect the evaluation of the “J” well design.

Detailed Discussion

Problems with the original “J” well design

Jordan Energy had an opportunity to use the “J” well design proposed for this project in three recent wells drilled in the DeWard-Cleaver project in Antrim County. These wells did not produce as well as expected; in fact they performed worse than simple vertical wells drilled nearby. Figure 3A is an updated plot of production from the State Mancelona 2-12 and State Hayes 4-18 vertical wells compared with production from the State Mancelona #2-12 HD, #15-13 HD, and the #15-13A HD “J” wells. Figure 3B shows actual daily gas production from June 2007 through January 2008 for these same Antrim wells.

Earlier it was reported that the basic problem with the “J” well design appeared to be the development of blockages along the horizontal leg. Two possibilities had been put forward: one, fluids are trapped in undulations in the well bore, resulting in a fluid lock, and two, material sloughs off the well, eventually blocking the gas flow. We suggested it was possible that both mechanisms operated at the same time and reinforced flow restriction. Subsequently Jordan determined that cavings from the hole were really not an issue, but that accumulated debris within the perceived undulations of an open hole well bore was the most likely cause of poor production and that this could be alleviated through the use of a downward sloping cased hole. Subsequently, while wells were drilled at DeWard-Cleaver (State Mancelona #2-12 HD, #15-13 HD, and the #15-13A HD) with the “J” well approach, the State Colfax 2-28 HD and 3-28 HD have been drilled with a new design, a high- angle cased hole that will be perforated. These wells will be completed in mid February and production will begin shortly thereafter. Production data currently being collected from the DeWard-Cleaver wells will be compared to the State Colfax wells to quantify the conclusions. We are optimistic that this new configuration does will solve the production problem. Figure 2A shows the original configuration of the demonstration well, while Figure 2B shows the current modification. The well design is still being tested.

A Possible Solution

The DeWard-Cleaver wells appear to have solved the problem, and this design will be incorporated into the demonstration well, perhaps with minor modifications.

Task List
Data Collection (Task 1.0)

Project databases are being organized and documented for the Project Handbook. This includes incorporating updates from the MI DEQ and MPSC when new data is made available. Some details are documented below.

Formation Tops. Measured depths (MD) and true vertical depths (TVD) of formation tops (glacial drift base) are stored in a table by API number, formation code, and method obtained. There are multiple records for some formation tops because top picks from multiple sources are stored in the database. When creating structure and isopach maps, gridding algorithms should be used with one value for each x-y coordinate. A set of instructions and database queries will be included in the Project Handbook that will explain how the formation tops are chosen from the database. For example, when a TVD depth is present in a slanted well, it is chosen over MD. Also, we have developed a sequence of choices for the method obtained.

Data Category Source

Well Locations Michigan DEQ

Formation Tops Michigan DEQ

Production Data

• Michigan DEQ (Oil-Gas-Water, 1982 – present)
• Michigan Public Service Commission (Gas and CO2, 1990 – present)
• Michigan Tech Historic Production (Oil-Gas-Water, Annual by Field 1925-1986)

Gravity Data Jordan Development Company, LLC

Michigan Bouguer Anomaly data (University of Texas at El Paso website for GeoNet – United States Gravity Data Repository System, accessed Oct. 2007)

Digital Well Logs LAS files – MTU

Raster Logs Michigan DEQ

Mapping (Task 2.0)
Structure and isopach maps for the Lachine, Paxton, and Norwood formations have been created for the Northern Michigan Antrim production region, the original project area of Antrim County, and for the new demonstration area in Benzie County. Gravity Anomaly maps have also been created for these regions and a series of 5-year production maps has been created. All of these figures have been inserted into the project handbook.

Regulatory (Task 3.0)
This task was satisfactorily resolved when the Michigan DNR decided to permit the AG-A-MING demonstration well without modification of the instruction 1-94. The permit was issued on December 14, 2006 for the AG-A-MING well (see map, Figure 1). Under this Permit (58153) the Michigan DNR, accepted the concept of the “J” well (Figure 2).

Synthesis (Task 5.0 Year 1 and Year 2)
The Antrim Play Handbook has been outlined and materials have been gathered for inclusion into the handbook. The Well Schematics section has been updated to include original plans for the AG-A-MING well site, and schematics for the DeWard-Cleaver wells in Antrim County and the Colfax wells in Benzie County.

Demonstration Wells (Task 6.0)
As mentioned earlier, a demonstration well planned for the project at the AG-A-MING site has been held up by right-of-way negotiations, but two “J” wells that incorporated the project design were drilled at other nearby Antrim sites, the State Mancelona #2-12 HD, the State Mancelona #15-13 HD, and the State Mancelona #15-13A HD. A request has been sent to DOE to substitute the State Colfax #3-28 HD for the AG-A-Ming 4-12 HD for the demonstration well. The State Colfax #3-28 has been spudded and successfully completed in January 2008. Production lines are currently being installed and we expect to have in hand at least 9 months of production data from the demonstration well. These data can be combined with the DeWard-Cleaver wellsto demonstrate the effect of the changes in the “J” well design on actual production. We feel that this will greatly enhance the case history we propose for the project handbook.

Benefits
Significant portions of Antrim Shale acreage in Northern Michigan is currently off-limits due to State regulations requiring that wells be cased within 100 ft of the surface. This requirement is intended to reduce or eliminate contamination of groundwater and aquifers and to prevent gas leakage to the surface. The impact of such contamination on the subsurface is evident, while the impact to the atmosphere from these operations is less obvious but potentially more damaging. This project addresses both of these concerns. The proposed horizontal drilling effort will be much more efficient in producing the Antrim Shale, thus requiring far fewer wells than would be needed to drain an equivalent amount of acreage using conventionally drilled vertical wells. As a result, the environment will be less impacted and more resource will be developed.

Summary
Recent wells drilled in DeWard-Cleaver and now at Colfax in Benzie County have provided production data showing the effect of the project well on production. As a result we have cased the horizontal leg of the production wells and production has improved. We have a positive result for the resolution of the regulatory task; the Michigan DNR accepted the “J” well design as compliant with Instruction 1-94. This will open the way for exploration and production in areas of the Antrim that drillers previously avoided. We applied the unfavorable results from the DeWard-Cleaver horizontal wells to “lessons learned” category and proceeded to redesign the “J” well to a new configuration that did overcome the problems with the original design. The lessons learned have been written up in Appendix 2, and will be included in the project reports and handbook. In a way the delay in spudding the demonstration well has benefited the project by allowing us to test the proposed well design in additional wells before committing it to the project well. We thus had the opportunity to correct problems uncovered. We are including these results and the details of the DeWard-Cleaver wells into the project reports and the project handbook.

We have a detailed map (Figure 4) of the additional Antrim acreage that will become available for exploration and production as a result of the interpretation of the 1-94 Instruction for this project. Also, we can begin to monitor CO2 production from the new DeWard-Cleaver wells (both vertical and horizontal) as well as continue with our efforts to obtain historical production records.

(February 2009)
This project has been completed. The final report is available below under "Additional Information".

Funding
This project was selected under solicitation, DE-PS26-06NT15570, Low Impact Natural Gas and Oil (LINGO).

$499,672

$635,171 (77% of total)

NETL – Jesse Garcia (jesse.garcia@netl.doe.gov or 918-699-2036)
MTU – James R. Wood (jrw@mtu.edu or 906-487-2894

Final Project Report [PDF-28.4MB]