Unconventional Gas - the "Shale Gale!"

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Tuesday, April 27, 2010, London, The Geological Society

It is impossible to ignore the absolutely stunning transformation that’s believed to be happening in the USA and, potentially, whole North American gas market. It has been suggested, based on authoritative studies that the US has huge unconventional ‘shale gas’ resources – hundreds of millions of Tcf, that can be developed with today’s drilling and completions technologies.

In our Forum, we posed the question as to whether something similar is possible in western Europe? Where could significant quantities of such gas be found; what lessons can be learned from the North American experiences; how would such a source of gas fit into the global flow of gas? Or whether is this all a ‘Shale Gale’ that will blow itself out?

We think we reached four main conclusions:

1. Accessing ‘shale gas’ depends on drilling & completions technology that is available today, whereby large numbers of multi-lateral horizontal wells are drilled into the target horizons and then complex, multi-stage hydraulic ‘fraccing’ is undertaken. In ideal circumstances, the target shale is naturally fractured but is bounded by more competent rocks that resist ‘fraccing’ – to some extent, such targets can be defined by adroit use of 3D seismic data.

2. Costs are quite high – a typical well in the Haynesville play may cost $7.5-10m, with operating costs of around $2.25/Mcf , leading to a production cost of circa $7.5-8/Mcf. Henry Hub prices have been more like $4/Mcf over the last 18 months. In addition, the process consumes large amounts of water: Chesapeake Energy have stated that “drilling a typical Chesapeake deep well requires between 65,000 and 600,000 gallons of water…..Hydraulically fracturing a typical Chesapeake horizontal deep shale gas well requires an average of 4.5 million gallons of water per well.” This water must firstly be made available and then kept clear of aquifers after use as it may be contaminated by acids and propants.

3. The progress of gas-in-place volumes from ‘prospective resource’ to ‘contingent resource’ to ‘reserves’ is much harder to achieve for unconventionals such as ‘shale gas’ than for conventional hydrocarbons, with the first step requiring extensive geological and petroleum engineering data, including convincing flow tests and the second requiring proof of commerciality on a well-by-well basis.

4. For a number of reasons, it is not easy to see a rapid availability of ‘shale gas’ in, or close to, Europe. First of all, the accumulations seem to be much less prolific in terms of Mcf/sq km than their gas-rich counterparts in North America, requiring therefore more wells and more ‘fraccing’. Secondly, suitable rigs and equipment and, most probably, people are an order of magnitude less available in Europe than they are in North America. Thirdly, it is not clear that the environmental issues – density of population, availability of water (and its disposal) can be easily solved. Fourthly, European gas prices are not yet high enough to make ‘shale gas’ economic.

Thus, in terms of investment in active companies, ‘shale gas’ in and around Europe should be seen as a very long-term game, just as ExxonMobil have clearly taken a similarly long-term view with their purchase of the North American unconventional gas player XTO.

Agenda

9:00 Arrivals and Registrations

9:30

David Bamford - Director - Finding Petroleum

Welcome and Introduction: The technologies behind the "Shale Gale"



David Bamford is well known around the oil & gas industry both as an explorer and a geophysicist. He holds a Physics degree from the University of Bristol and a Ph.D in Geological Sciences from the University of Birmingham.

Since 2004, he has been a non-executive director at Tullow Oil plc, being recruited for this position especially for his exploration knowledge. He serves on the Nominations and Remuneration Committees, and was chairman of the latter, and Senior Independent Director, for 3 years prior to his retire from the board at the end of April 2014.

He was on the board of Premier Oil from May 2014 to May 2016.

He retired from BP plc in 2003, his last four positions being Chief Geophysicist (1990-1995), Business Unit Leader (General Manager) for first West Africa and then Norway (1995-1999), and finally Head of Exploration until 2003.

He has served on the boards of Paras Ltd, a small exploration and IS/IT consulting company in which he held 22% equity, until its sale to RPS Energy in 2008 and Welltec a/s, a Danish well engineering company, as the nominee of the private equity investor Riverside.

From 2012 to 201 he was on the board of ASX-quoted Australia Oriental Energy as a non-executive director.

He was a founder of Richmond Energy Partners, a small oil & gas research house, and several media companies that focus on the oil & gas sector, and has served as an advisor to Alliance Bernstein, Opus Executive, the Parkmead Group plc, and Kimmeridge Energy LLP. Since retiring from BP, he has undertaken asset and company valuation projects for investment banks, hedge funds and small oil companies.

Finding Petroleum
Finding Petroleum was established to help the oil and gas industry network, and stay up to date on the latest technological developments. It does this via hosting regular events and with an online social network of nearly 10,000 members.
9:50

Oswald Clint - Senior Analyst - Bernstein Research

How unconventional gas fits into the gas market


Dr Clint joined Sanford C. Bernstein in 2004 and was part of the Energy Team with Neil McMahon covering the Global Integrated Oil sector.

Currently he is the Senior Research Analyst covering the European E&P and Russian Oil & Gas sectors. The Bernstein Energy franchise has become well known due to both the provocative commentary on the commodities and oil stocks, as well as the innovative research that forms the core of their frequent publications. Previously, he worked as an accountant and consultant for KPMG covering energy, gas, and chemical sectors. Dr Clint received his PhD in Geophysics from University College London where he specialised in sub-surface rock physics and is also a Chartered Accountant.

Bernstein Research
Sanford C. Bernstein is widely recognized as Wall Street's premier sell-side research firm. Their research is sought out by leading investment managers around the world, and they are annually ranked at the very top of acknowledged arbiters. In independent surveys of major institutional clients, Bernstein's research is ranked #1 for overall quality, industry knowledge, most trusted, best detailed financial analysis, major company studies, most useful valuation frameworks, best original research, and most willing to challenge management. In Institutional Investor's 2008 annual client survey, the leading survey by which analysts in our industry are evaluated, 100% of our U.S. Analysts were recognized as among the best in their respective fields -- more than any other firm on Wall Street.
10:30 Coffee and Tea - Sponsored by Bernstein Research

11:00

Phil Clarke - Founder - Novas Consulting

US shale gas basins


Phil Clarke founded Novas Consulting in 2005, after a career with BP spanning more than twenty years. Phil completed his undergarduate and doctoral studies in Earth Sciences at Cambridge University before joining BP in 1983 where he trained as a petroleum geologist. He subsequently worked in a wide variety of international technical and managerial roles, acquiring considerable global E&P experience. His final position in BP was Exploration Manager for the Brazil business unit, where he led a substantial deepwater exploration programme. Phil has extensive experience across cultures and has worked on a diverse and challenging range of assignments. He is a Chartered Geologist, Fellow of the Geological Society and a Member of PESGB.

Novas Consulting
Novas Consulting is a technical consultancy serving the energy industry, specialising in integrated subsurface studies and due diligence support to E&P companies and investors. Our technical service is based on insightful subsurface analysis, integrated with expert input from other E&P disciplines. We specialise in delivering high impact, rapid turnaround projects which enable clients to make critical corporate decisions in a timely and effective manner. We have access to an extensive network of experienced industry associates, in addition to key corporate strategic alliances, which enable us to provide a full range of technical, economic, business and strategic advice to clients.
11:35

Jessica Hill & Stewart Whiteley - - Petrenel

The shale gas potential of selected countries in Europe, North Africa and the Near East


Petrenel
PETRENEL (The Petroleum and Renewable Energy Company Limited) is a privately owned, independent consulting firm specialising in providing professional advice to businesses and government organisations operating in the energy sector. The company started trading in 2000 and has rapidly grown to become a highly respected upstream energy consultancy renowned for the quality of its service and the integrity of its staff.
12:10

Paul Chernik - Business Development Manager and Senior Reservoir Engineer - ERC Equipoise

Estimating unconventional gas in place and reserves


ERC Equipoise
ERC Equipoise (ERCE) is the United Kingdom's leading employee-owned Oil and Gas Reservoir Evaluation firm. Headquartered in London and with an Asia-Pacific office based in Singapore, our in-house team comprises of Geoscience, Engineering, Petrophysics and Economics professionals
12:45 Prize draw and Lunch

Sponsors of this event

Opus Executive Partners
Opus Executive Partners is a specialist advisory firm serving the energy, mining and natural resources industries.

Opus Executive Partners act as a strategic advisor and provider of Board-level resourcing solutions to national and multi-national companies helping them overcome key business challenges by meeting critical leadership and governance needs.

Whether you are looking for advice, or to fill Board-level (Executive or Non-Executive) or Senior-level Management positions Opus can help you unlock new growth and value across your business.

New Eyes Exploration
New Eyes Exploration, founded by David Bamford, explores new ways to discover Oil and Gas.

Bernstein Research
Sanford C. Bernstein is widely recognized as Wall Street's premier sell-side research firm. Their research is sought out by leading investment managers around the world, and they are annually ranked at the very top of acknowledged arbiters. In independent surveys of major institutional clients, Bernstein's research is ranked #1 for overall quality, industry knowledge, most trusted, best detailed financial analysis, major company studies, most useful valuation frameworks, best original research, and most willing to challenge management. In Institutional Investor's 2008 annual client survey, the leading survey by which analysts in our industry are evaluated, 100% of our U.S. Analysts were recognized as among the best in their respective fields -- more than any other firm on Wall Street.

Registered Delegates

Ron Daniel
Staff Geologist
-
United Kingdom
Simon McDonald
Managing Director
ERC Energy Resource Consultants.com
William Prendergast
Petroleum systems functional lead
Neftex Petroleum Consultants
United Kingdom
Billy Brady
Senior Specialist
3M UK
United Kingdom
Paul Barrett
Managing Director
Europa Oil & Gas
Kate Evans
Geoscientist
Neftex Petroleum Consultants
Hugh Ebbutt
Director
A T Kearney
United Kingdom
Gareth Smith
MD
Exprodat Consulting
Stephen Edwards
Business Development Manager
Nexen Petroleum UK
United Kingdom
Tony Grindrod
Trustee
AAPG Europe
United Kingdom
Andrea Gaielli
Equity Analyst
F&C Investments
Helen Turnell
Principal Consultant
NR Global Consulting Ltd
United Kingdom
Chris Hart
UK portfolio manager
Aerion Fund Management
United Kingdom
Adam Marmaras
Event Organiser
Finding Petroleum
United Kingdom
Keith Nunn
Managing Director
Nunngeo Consulting Ltd
United Kingdom
Paul Murphy
Key Account Manager, Oil and Gas Division
Airbus Defence and Space
United Kingdom
Adam Marmaras
Event Organiser
Finding Petroleum
United Kingdom
tony renton
Founder
Oil and Gas London
United Kingdom
DOUG EVANS
Staff Geophysicist
Atlantic Petroleum
Karl Jeffery
Editor
Finding Petroleum
United Kingdom
Tom Taylor
Fund Manager
Oldfield Partners
Christian Richards
Sales Manager
AustinBridgeporth
United Kingdom
Adam Marmaras
Event Organiser
Finding Petroleum
United Kingdom
John Simmons
Director
ON Communication
United Kingdom
Peter Jackson
Manager
Bain & Company
United Kingdom
Alec Egan
Sponsorship Manager
Finding Petroleum
florence geny
Senior Commercial analyst
Ophir Energy
United Kingdom
Tuikku Alaviitala
Director
Barclays Capital
Adam Marmaras
Event Organiser
Finding Petroleum
United Kingdom
Amy Williams-Allden
Account Manager
Palantir
GARETH BEAMISH
Consultant Geophysicist
BG GROUP
United Kingdom
Adam Marmaras
Event Organiser
Finding Petroleum
United Kingdom
Santosh Singh
Buisness Consultant
Palantir Economic Solution
Richard Ember
Business Development Manager, Europe and Central Asia
BG Group
United Kingdom
mark cottrell
Senior Geomechanics Consultant
FracMan Technology Group - Golder Associates
Gosia Rawdanowicz
Geologist
PDF Limited
Peter Goddard
Geologist
BG Group
gayle meikle
Managing Director
Frontier Communications
United Kingdom
Owain Shave
Geologist
PDF Ltd
John Alderton
Manager Shale Gas
BG Group
United Kingdom
Martin Li
Writer
FT (Investors Chronicle)
David Bamford

Petromall Ltd
John Argent
Global New Ventures Geologist
BG Group
United Kingdom
Martin Carney
sales and Marketing Director
Gas Fuelling Technolgy Ltd
Philip Nelson
Owner
PHiLMS International
Ben Dutton
Geoscience Applications Developer
Blueback Reservoir
Barry S Evans
ManGing Director
Gas Fuelling Technology Limitted
Michael Rimell
Portfolio Manager
PineBridge Investments
Peter Bryant
Exploration Manager
Celtic Oil / SK
United Kingdom
David Clitherow
BD Director
Gas Strategies
Philip Frank

PLF Consulting
Edward Bassett
International BD
Centrica
Chris Levell
Manager
Gas Strategies
Ian Morgan
--------
Private
United Kingdom
Andrew Freear
Commercial Analyst
Centrica plc
Alastair Woodrow
Partner
Gemini Oil & Gas Advisors LLP
Elaine Hulse
Exhibition Director
Reed Exhibitions Ltd
Peter Kirk
Vice President
CH2M HILL
United Kingdom
Renu Gupta
Managing Director
Gupta Energy Ltd
Keith Myers
Partner
Richmond Energy
Will Gallacher
Technical Adviser
Citicorp
Caron Howard
Business Development Manager
Hannon Westwood
United Kingdom
Felicite Robertson

Robertson & Co - Translation & Interpreting
Colin David
Business Development
Consultant
United Kingdom
Zhi Cong Goh
Associate
Hawker Capital
David Sendra
Senior Manager
Rock Solid Images
United Kingdom
Roger Doery
Consultant
Consultant
United Kingdom
Galina Romanova
Awards Analyst
IHS
Robert Waterhouse
Director
Rosha Resources Ltd
United Kingdom
Peter Allen
consultant
consultant
United Kingdom
Kevin Chandler
Senior Product Manager - International Logs and Seismic
IHS
United Kingdom
John Packer
Project Coordinator
RPS Energy Limited
United Kingdom
Angus MacAskill

Consultant
steve hunt
VP EAME
ikon
Laraine Abbott
Senior Account Manager
Schlumberger
Micky Allen
consultant
consultant
United Kingdom
John Kerr
Senior Geophysicist
Ikon Science
Bill Senior
Consultant
Senior CCS Solutions Ltd
United Kingdom
Monish Sahni

CQS
Peter Dolan
Founding Non-Executive Director
Ikon Science Limited
United Kingdom
umang goswami
Senior Manager
SMBC
Pareejat Singhal
senior analyst
CQS (UK) LLP
Dick Selley
Senior Research Fellow
Imperial College
United Kingdom
nick carberry
portfolio manager
SMBC
David Mirzai
Analyst
Credit Suisse
Liz McBriar
Business Development Manager
IndigoPool, Schlumberger
United Kingdom
Chris Wheaton
Director
Stifel
United Kingdom
Graham Spencer
Consultant
Cripps Sears
ella wilbraham
researcher
Indyene
Jan Paul van Driel
Partner
StrategicFit
United Kingdom
Jonathan Tarris
North Africa Analyst
Deloitte Petroleum Services
United Kingdom
Yvonne Adriasola Munoz
Geologist
INEOS
Yolenis Cabello

Suelopetrol
Humphrey Douglas
partner
Dentons
United Kingdom
Ben Cooper
Consultant
International SOS
Philip Whittaker
Principal
The Boston Consulting Group
Iain Packham
Reporter
Dow Jones Newswires
United Kingdom
Frances Leon
General Manager, Africa Oil & Gas
ITE Group Plc
United Kingdom
Brian McBeth
Managing Partner
The Oxford Consultancy Group
United Kingdom
Angela Henshall
reporter
Dow Jones Newswires
Joe Staffurth
Director
JSI Services
United Kingdom
Andy Cooper
Sales Director
thyssenkrupp
United Kingdom
Tony Miller
Production Director
DPTS Ltd
Rod Makin
Consultant
LK Exploration
United Kingdom
Sunday Kumuyi
Research Associate
University of Salford
Chris Greenwell
Research Fellow
Durham University
Dr Julie Bell
Senior Lecturer
London South Bank University
Pete Brooke-Monti
Recruitment Manager
Upstream Technical Consultants Ltd
Julian Dawson
MD
Durler Consulting
Christian Coulter
Managing Director
Macquarie Bank Ltd.
United Kingdom
PABLO CIENFUEGOS
GEOLOGIST
VANCAST EXPLORACION
Martin Riddle
Technical Manager
Envoi
United Kingdom
David Dugdale
Analyst
Manulife Asset Management
United Kingdom
Terry Bond
Chairman
ViaLogy PLC
United Kingdom
Richard Bayes
Geophysicist
EOG Resources
United Kingdom
Vugar Aliyev
Oil and Gas Analyst
Matrix Corporate Capital
Adam Waterhouse

Waterhouse
David Griffiths
General Manager
EOG Resources UK Ltd
Robin French
Senior Advisor
Mitsubishi Corporation
United Kingdom
Dave Auger
Retired
WesternGeco