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Liquids Rich Unconventional Montney: The Geology and the Forecast

Frank Kuppe, Steve Haysom and Glen Nevokshonoff; Seven Generations Energy Ltd.
Copyright 2012, Society of Petroleum Engineers
This paper was prepared for presentation at the SPE Canadian Unconventional Resources Conference held in Calgary, Alberta, Canada, 30 October1 November 2012.
This paper was selected for presentation by an SPE program committee following review of information contained in an abstract submitted by the author(s). Contents of the paper
have not been reviewed by the Society of Petroleum Engineers and are subject to correction by the author(s). The material does not necessarily reflect any position of the Society
of Petroleum Engineers, its officers, or members. Electronic reproduction, distribution, or storage of any part of this paper without the written consent of the Society of Petroleum
Engineers is prohibited. Permission to reproduce in print is restricted to an abstract of not more than 300 words; illustrations may not be copied. The abstract must contain
conspicuous acknowledgment of SPE copyright.

Abstract:
The reservoir in the central part of the Alberta portion of the Deep Basin Montney Trend yields the promise of a
resource play that may be as extensive, productive and rich in liquids as the best portion of the Eagle Ford Shale in
southern Texas. Various geological and petro-physical parameters are compared, along with initial production
signatures to show the similarities with the liquids rich, Eagle Ford analog. Liquid and gas analyses are recombined
at various, observed, condensate/gas ratios and subsequently input into a compositional simulation model. The
extreme representations of these fluid characterizations, varying from rich gas to volatile oil, can be used to achieve
comparable history matches of producing wells.
The reservoir fluid grades from a rich gas (50 Bbl/MMcf condensate) to a light crude system (3,350 scf/Bbl), from
west to east, with a coincident rise in elevation of 100 m. There are no traps holding the fluid in place other than
the very low permeability of the reservoir. Large flow potential gradients exist from the westerly, down-dip, gas
rich portion of the reservoir, toward the easterly more liquids rich region. This dynamic liquid on top of gas
situation is upside down relative to conventional trapped hydrocarbon deposits. It is the result of dissipation of
hydrocarbons away from their point of source and the fact that the catagenesis process converts source materials
preferentially to methane with increased depth and temperature. This situation is known to occur in a number of
deep basin, over pressured, mixed hydrocarbon deposits in North America including the Montney, the Eagle Ford
and the Utica.
Reservoir modeling is complicated by the need to initialize a model with lower density fluid underlying more dense
fluid and with large potential gradients through the hydrocarbon column. This study illustrates a method used to
establish the initial, dynamic as to geologic time, state of fluid distribution. It goes on to illustrate why conventional
means of characterizing reservoir fluids are inappropriate due to the nature of the reservoir fluid distribution and,
possibly, misleading. Fluids sampled from a point source, be it from a surface location or the bottom of a horizontal
wells vertical section, is not representative of the phase distribution along the entire horizontal well lateral. The
2,430 meter long, Montney horizontal lateral, located at 9-12-64-4W6M, straddles a transition zone that penetrates
myriad hydrocarbon phases and compositions, the aggregate of which cannot be represented by a single phase
envelope. These types of wells could be classified as either Gas or Oil if using conventional criteria, depending
upon which liquid/gas ratio was used to recombine fluids. The usual, conventional, methods of classifying should
therefore be discontinued for wells producing from deep-basin, over-pressured, mixed-hydrocarbon-saturated
reservoirs.
Data from a detailed core analysis (61m core), and various re-combined fluid analyses, are used to achieve a history

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match of initial production data from the liquids rich Montney well producing within the Kakwa field. The
compositional simulation model is used to run sensitivities on 1) liquid yields and corresponding re-combined
reservoir fluid, 2) permeability modifications to the hydraulic fracture and stimulated reservoir volume (affecting
fracture conductivity), and 3) quantities of reservoir gas that has migrated up-structure from the source, if necessary,
to achieve comparable history matches.
The quantity of gas migration is controlled by invoking a miscible flood, 200 years prior to the beginning of well
production and varying the permeability within high permeability streaks, or fractures, to essentially replicate gas
migration from the high temperature source in this unconventional reservoir. The injector and producer used at
either end of the reservoir structure, in this model, are used to facilitate the movement of relatively small amounts of
gas. The model is initialized, for the purpose of history matching (and forecasting), with a model that not only has a
fingering distribution of phases and compositions, within the transition zone, but also represents the varying
pressure gradients observed along the reservoir dip. Up-dip the pressure gradient approaches 10.5 kPa/m while the
down-structure end of this reservoir yields gradients that exceed 13.5 kPa/m.
The ultimate purpose of this study is to show what geological conditions prevail within this particular area of the
Montney play and why they make this the ideal location for liquids rich gas production. It will show how much
detail is required (or not) to generate a representative forecast model or type curve. It will also attempt to quantify
error bars associated with parameters typically defined for this purpose, particularly those related to the range of
solution gas/oil ratios (or liquid yields) that generate comparable history matches. And finally, this study will show
what impact the characterization of reservoir fluids may have on well spacing and reservoir development plans.
Montney Formation Geological Overview:
The Montney Formation is a sedimentary wedge that was deposited on the western margin of the exposed North
American craton during earliest Triassic time, 232-245 MYA. The Montney depositional fairway stretches over
approximately 55,000 square miles from north-east British Columbia to north-west Alberta. To the west the
Montney formation is exposed and outcrops within the Rocky Mountain chain, while to the east it sub-crops where it
was eroded during the late Jurassic and early Cretaceous periods. The entire sedimentary wedge dips from the NE
to the SW, and reaches its lowest elevations in NW Alberta. The Montney unconformably overlies the Permian
Belloy formation and is unconformably overlain by Triassic to Cretaceous sediments (west to east). The formation
ranges from less than 1-meter in thickness at the easterly sub-crop, to over 350m to the west.
The Montney sequence can generally be divided into two main depositional systems, one dominated by proximal
shoreface deposits (to the east) and the other dominated by distal deposits (to the west). These depositional systems
are controlled by their relative position to the paleo-submarine shelf edge that runs through the middle of the
Montney fairway from the SE to the NW (Figure 1).
Proximal Montney deposits, east of the paleo-geographic shelf, are dominated by shoreface sandstones, dolomitized
coquinas, and lower shoreface siltstones (Figure 1). These lithologies form the porous and permeable conventional
Montney oil and gas reservoirs of Alberta and British Columbia, exploited since the early 1960s. Distal deposits, to
the west of the paleo-geographic shelf, consist of storm-dominated siltstones and shales (Figure 1). These
lithologies are commonly inter-bedded and disrupted by frequent turbidite deposits of coarser-grained siltstone and
minor sandstones sourced from shoreface-proximal deposits to the east, as described above.
In west central Alberta, the Montney Formation is characterized by proximal and distal storm dominated shore face
with southwesterly-dipping clinoform turbidite deposits within paleo-topographic
lows.

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Figure 1: Montney Facies (Canadian Discovery & GDGC (2008), modified by 7G)

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SE

At Kakwa course grained

sediment is transported
from the shelf into large
depo-centres

NW

Middle Montney
Course grained reservoir with
enhanced porosity and
permeability (aerially extensive
sea floor fan shoreface)

Thicker Montney as
deposition of silts and sands
accommodated between
Devonian reefs

Within the Unconventional Deep Basin The Montney is dominantly a siltstone with interbedded shale
Figure 2: Montney Depositional Environment (website http://j-diddy.wikispaces.com/what+environment modified by 7G)

The Montney is a well-established producing horizon for both oil and gas throughout western Alberta and
northeastern British Columbia. In recent years horizontal drilling technology and multi-stage fracturing of
horizontal wells have allowed for significant additional development of the Montney Formation beyond the confines
of the conventionally trapped pools that were commercially exploitable with vertical wells. Initially, unconventional
Montney exploration and production from tighter Montney lithologies was confined to north-east British Columbia,
where it is shallower. Recent successful drilling for unconventional Montney reservoirs in Alberta shows that the
Montney production fairway follows the over-pressure edge and extends South and East from Dawson and Swan in
British Columbia, across into Alberta, down through the Elmworth, Wapiti, Karr, Kakwa and into Resthaven fields
(Figure 3).
Greater Kakwa Area Montney Geology:
In most of the greater Kakwa area the Montney formation is unconformably overlain by the Doig formation and
unconformably overlies the Belloy (Figure 4). In the region between the underlying Gold Creek and Simonette
Devonian highs the Montney is thicker than it is where it overlies the reefs. Between the reefs, the Montney
averages 200 meters in thickness and dips basin-ward from the NE to the SW. The top of the Montney ranges from
2800 to over 3500 meters in true vertical depth from surface. The 200-meter sequence is divided up into 2 main
Montney intervals, each of comparable ~100 meter thickness. These main intervals, the Lower and Upper Montney,
can be separated by a Middle Montney wedge that is not pervasive throughout the entire area (Figure 4). These
intervals consist of shale, siltstone and fine-grained sandstones that were deposited in deeper water environments off
of the main Montney shelf edge.

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Figure 3: Montney pressure regime with pool outlines (Canadian Discovery & GDGC (2008) modified by 7G)

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The Upper Montney: The Upper Montney is approximately 100 meters in thickness throughout the Greater Kakwa
area. This interval contains sediments dominated by fine-to-coarse-grained silts and fine-grained sands with minor
inter-bedded shale. These sediments are noticeably coarser-grained than those within the Lower Montney interval.
Sedimentation was dominated by massive sequences of storm deposits and turbidities, more proximal to the
Montney shelf edge than the more distal Lower Montney interval.
The Middle Montney: This unit is defined as a large submarine fan that trends from SE to NW. This interval is
interpreted as a sequence of stacked turbidite flows that were sourced by numerous feeder turbidites and associated
debris flows that cascaded off the Montney shelf (located to the east) and coalesced into a single depo-centre (Figure
2). This sequence ranges from 5 to 30 meters in thickness, and extends over 250 square miles. Where present it is
located stratigraphically within the bottom section (5-30 meters) of the Upper Montney (Figure 4). Where the
Middle Montney is not present this unit is fully replaced by sediments typical of the Upper Montney interval.
The Lower Montney: The Lower Montney interval is also approximately 100 meters thick but is dominated by
inter-bedded shales/mudstones and fine-grained siltstones. Generally this 100-meter sequence has higher clay and
total organic carbon content than the Upper Montney. A marker is located at the top of the Lower Montney that can
be regionally correlated. Over the broader region, turbidites, of up to 10-meters in thickness, can be found
throughout the Lower Montney interval.

Figure 4: Kakwa Area Type Log (Analysis by Ross Crain)

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Hydrocarbon Maturation & Migration History:

The Montney has a complex maturation and migration history in the greater Kakwa Area. Rock-Eval pyrolysis data
show that the Montney formation, underlying the Kakwa field, was within the oil window. This indicates that at one
time the reservoir temperature reached was suited to the generation of oil from resident organic material (kerogen).
Production and test data within the unconventional Montney system in Alberta show varying natural gas liquids and
condensate yields per MMcf of produced gas. Unconventional reservoirs in NEBC also show varying yields. These
trends can be mapped from NEBC into the Alberta deep basin Montney (Figure 5). Maps show different expected
liquid yields per MMcf that appear in bands. It should be noted that the migration of gas up through the oil as the
higher pressure gas emanates from the source is expected to be dominated by permeability distribution. Therefore,
while map bands show indicative trends, on a finer scale the variation is expected to be erratic in both the areal and
vertical sense leading to significant localized departures from the overall trend. The trends show that deeper
Montney reservoirs tend to be less rich in liquids, while shallower Montney reservoirs are liquids-rich and may be
oil saturated. Portions of the Montney reservoir, within the greater Kakwa area, may have natural gas liquids and
condensate yields in the 200 or even 300 barrels per MMcf range (Figure 6).
The Montney at Kakwa exhibits both over-pressuring and variable liquid/gas ratios. Variable liquid gas ratios and
over-pressuring are the result of the thermal cracking of oil from a variable heat flow through geological time,
thereby generating a mixed hydrocarbon system (Figure 7). This mixed hydrocarbon system is caused by a
continuous thermal cracking of oil in the deeper part of the Montney where they are subjected to higher temperature.
The thermal cracking of oil forms gas causing over-pressuring and forcing the gas to migrate up-dip, thus generating
a regional pressure gradient. The gas migrating up-dip favors higher permeability, perhaps associated with locally
occurring fractures.
Kakwa Montney lies within a lower than normal geothermal gradient which has preferentially preserved oil, gas
and condensate in some of the highest ratios within the unconventional Montney fairway (Figure 8).

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Figure 5: Montney Unconventional Liquid Gas Ratio Trends (Canadian Discovery & GDGC (2008); modified by 7G)

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Figure 6: Kakwa River Projected Stabilized Liquid Gas Ratio Contours with Recent Results

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Figure 7: Kakwa Montney Mix Hydrocarbon Schematic

Figure 8: Geothermal Gradient Map (Rakhit Petroleum Consulting Ltd (2006) modified by 7G)

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Eagle Ford Analogy:

The authors have noticed striking similarities to other over-pressured, mixed hydrocarbon reservoirs. The
correlation between depth and expected liquid gas ratio in the Eagle Ford is well established (Figure 9). The deepest
Eagle Ford reservoir is within the dry gas window and has the highest reservoir pressure. The shallowest light oil
window is normally pressured to under-pressured as the reservoir transitions from the basin-centered, over-pressured
mixed hydrocarbon system. In the Eagle Ford, moving up-dip from the dry gas window, through to the
gas/condensate window and then into the volatile oil window, the reservoir pressure continues to decrease but still
remains in the unconventional system. The Eagle Ford Rock-Eval pyrolysis analysis puts it within the oil window
(Edman, 2012). Over Geological time, and after hydrocarbon generation, the deeper part of the Eagle Ford was
subjected to higher temperatures, essentially cracking the oil, releasing gas and ultimately, creating an overpressured reservoir. The gas, subjected to increasing pressure, migrated up-dip through the oil-saturated interval.
Thus a regional pressure gradient was formed and the Eagle Ford reservoir segregated as depicted in Figure 9.
Various reservoir parameters in both the Kakwa and the Texas Eagle Ford play are tabulated below (Table 1). Of
note is the similarity in porosity, pressure gradient and depth within the condensate window.

Figure 9: Kakwa & Eagle Ford Liquid Gas Ratios (website http://www.eia.gov/oil_gas/rpd/shaleusa9.pdf; modified by 7G)

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Table 1: Geological comparison between Kakwa Montney and Texas Eagle Ford Plays

~25 miles

Figure 10: Eagle ford Mixed Hydrocarbon Schematic (Momentum Oil & Gas LLC (2011))

Phase Distribution in the Deep - Basin, Mixed Hydrocarbon, System:

The static distribution of phases in conventional reservoirs is dominated by the interplay between gravity and
capillary pressure and the flow is usually dominated by inter-granular flow as described by Darcys equation.
Sometimes natural fractures play an important role, and these influences can be modeled. The physics of dynamic
phase distribution and flow in unconventional reservoirs, like the Eagle Ford in southern Texas and Kakwa
Montney, are more complex.
We postulate that during the emanation of hydrocarbons from their source, through a tight rock such as the
Montney, especially where the rock is highly over-pressured and large gradients (well above hydrostatic head) exist
within continuous tight porous units, there is no clear definition of oil or gas zones and certainly not oil and gas
zones defined by gravity. It is more likely that the gas phase would be contiguous from its origin (i.e., deep source
rock) through to higher elevations where permeability is higher and oil might exist where cooler source conditions in
the reservoir and/or neighboring strata suited oil, as opposed to gas. In reservoirs like the Eagle Ford and the Kakwa
Montney, up-strata migrating gas has not yet displaced or vaporized all of the oil and inter-fingering of the gas is
likely to have occurred.

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Permeability and the continuity thereof, is probably a more reliable determinant of fluid type than gravity. In the
steeply dipping Montney formation, as the pressure gradient far exceeds the hydrostatic head, both gas and oil are
moving up-dip through the tight rock, obviously at very low velocity but most certainly up-dip and away from the
deep, hot, high pressure point of origin, where hydrocarbons are generated. Both fluids are migrating through the
tiny occluded pores toward the low pressure sink. Gas, having a viscosity that is one or two orders of magnitude
lower than the oil, is able to move faster so it would finger (as it does in a miscible flood) through oil, diffusing into
the oil, creating a compositional gradient. Darcy flow in tight rock is slow enough that diffusion may be significant.
Gas would find and preferentially migrate through the higher permeability streaks (i.e., fractures and higher perm
facies). This could, over millions of years, create an environment like the Kakwa Montney transition zone, where
lean gas, liquids rich gas and oil exist as a hodgepodge of saturations and compositions, all of which can be
encountered by a single horizontal well.
We now have abundant evidence that this type of phase distribution is occurring both in Texas Eagle Ford play and
in the Montney at Kakwa. The implications are that, while there is a central tendency for the hydrocarbon system to
get leaner with depth, the variation at any depth due to permeability variation, adverse mobility displacement,
viscous fingering and impaired diffusion mixing, along with the insignificance of gravity as a flood front stabilizer,
is possibly quite high. A single horizontal well may encounter lean gas, rich gas, volatile oil and light oil fingers.
The effluent from the well would be sourced from all of these diverse composition hydrocarbon systems. There
should be no expectation that the recombined production from the well represents the fluid system at any point along
the well. Since each point along the well is connected rock volumes of undetermined size or shape with similar
permeability to the point itself, there should also be no expectation that the effluent from the well at any time
represents an average fluid composition within a symmetrical well spacing unit of any shape or size.
One interesting observation is that there is no visual evidence of residual oil staining in the 61 metres of Montney
core cut in the 9-23-64-4W6 well. This well is quite near and at a similar elevation to a portion of the completed
interval at the 9-12-64-4W6 well (the well being modeled in this study), which is so rich in liquids that it is currently
deemed it to be an oil well. It would seem that, at least so far, any oil that has been encountered at that area of
Kakwa is volatile, able to completely vaporize at room temperature and pressure.
Despite these reservations, it is standard practice (arising from conventional reservoir engineering methods) to
recombine fluids in the ratios that they evolve from a well and to measure the amount of each component in each of
the liquid and the vapour phases and subsequently use them to anticipate the reservoir fluid composition over the
range of pressures expected during depletion of the reservoir. While not specifically valid, applying this
conventional engineering practice to unconventional reservoirs can provide a suggestion as to how the fluid might
behave as the reservoir depletes, recognizing that different portions of the reservoir will enter and depart the two
phase region at different points during the depletion of the reservoir. In the case of the Montney at Kakwa, the
generation of phase envelopes, achieved by recombining gas with produced oil, at measured rates, to reservoir
conditions (using an equation of state), shows that these fluids likely exist, from point to point, as either rich gas or
volatile oil in the reservoir. The subtle difference is that the former exists with reservoir conditions that are to the
right of the critical point (CP) and the latter is to the left of the CP. In both cases, however, the fluid exists as a
dense phase in the reservoir and is well above the cricondenbar (i.e., highest pressure) of the phase envelope, within
which a second phase condenses or bubbles out, after the pressure drops to this level.
Consistent with the over-pressured characteristic, associated with unconventional reservoirs, the Montney reservoir
pressures observed in the Kakwa field translate to gradients that range from 10.5 kPa/m to higher than 13.5 kPa/m.
This gradient difference of more than 3 kPa/m, prevails over a distance of 20 kilometers. When accounting for the
structural relief of about 100m, across this distance, the pressure difference is almost 12.0 MPa. This pressure
difference may well have existed for millions of years and caused the slow migration of gas (i.e., cooked
hydrocarbons) through the original oil continuum, eventually displacing oil towards the up-structure, low pressure
sink, where it exits out of the deep-basin and migrates into the up-dip conventionally trapped reservoirs.
Observed gas/liquid analyses and produced liquid yields, confirms that the hydrocarbon composition is quite
variable, within even a relatively small area. There seems to be insufficient diversity of the combined matrix and
natural fracture permeability to effectively disperse the hydrocarbon composition more uniformly. Consequently a
relatively smooth transition from gas to oil does not occur, as is often found in the more permeable conventional
oil and gas reservoirs.

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Gas has disseminated from the high pressure source in a relatively continuous phase until there was sufficient
dissipation and/or permeability to enable water to exist in continuous phase, as it had before any migration occurred.
In the down-structure, over-pressured, regions where the gas dominates, water saturation is often well below
irreducible saturation due to desiccation. This phenomenon is also confirmed by the observation that water used for
hydraulic fracture stimulation, when produced back, is often high in dissolved solids.
Although gravity is not important in the bulk phase distribution, it could play a significant role within permeable
lenses, where they exist in the reservoir. We also suspect that it is important in the vicinity of the connected fracture
network, where hydraulic fracturing increases effective permeability by many orders of magnitude and also creates a
storage volume that sometimes seems to act as an insitu separator.
Short-term shut-ins and/or temporary production rate reductions (due to increased surface line pressures, for
example), sometimes result in liquid yield increases that may take weeks to re-normalize to previous trends.
Decreasing rates result in decreasing draw-downs and increasing bottom hole flowing pressure (BHFP), often results
in immediate flow reductions of the high mobility gas, but a more delayed/muted response in the condensate rate. A
number of other factors are probably influencing this phenomenon and may include;
1) When pressure exceeds the bubble point of the aggregated phase envelopes (in the case of the volatile oil
well) less gas is produced as the volatile oil stays in single phase. When the pressure is reduced, dropping
it into the two phase region, gas bubbles out of solution and may impede the relative permeability of the
more liquids rich phase, resulting in decreasing liquid/gas ratios (LGRs).
2) The same LGR phenomenon may be observed for rich gas bearing regions, but possibly for different
reasons. Where the dense hydrocarbon system is comprised of a composition with aggregated critical
component properties yielding a critical temperature that is cooler than reservoir temperature, rich gas
characteristics prevail. In this case the decreasing production rate increases pressure to a level above the
dew point. Condensate is again produced with the Rich Gas, as a single phase and prevented from
dropping out in the near wellbore vicinity (as also observed in simulation modeling). Both the Volatile Oil
and Rich Gas systems may cause a reduction of liquid yields when pressure, in the near wellbore/hydraulic
fracture network, drops below the two-phase cricondenbar. Conversely, temporary shut-ins, or rate
reductions, causing an increase in bottom hole flowing pressure, may result in (temporary) increased liquid
yields.
3) In the case of well shut-ins, liquids are given the opportunity to accumulate within the wellbore and the
connected fracture network where the storage capacity is in the 100s of cubic meters in reservoir volume.
Lighter end hydrocarbons will have a greater tendency to be re-absorbed into any liquids that it may come
in contact with (particularly as pressure is rising), than will the heavier end hydrocarbons. This essentially
reduces the gas volume and increases liquid volume within this storage volume. Upon re-introducing a
pressure drawdown, higher liquid yield is realized until the heavier hydrocarbons, proximal to the wellbore,
are displaced with the lower average liquid yield in the immediate vicinity.
Given that we have no representative gas or oil sample because wells produce a mixture of fluids evolving from
each point along the well, intercepted by the frac, were presented with questions in regards to well type;

What is a gas well?

What is an oil well?
Is the distinction technically or administratively important?
Should there be any differences in the way wells are operated based on oil or gas taxonomy?
Is it technically sound to define these wells as either gas or oil wells?
How can the conditions that determine whether a well be classified as either an oil or gas well, be
predicted?
What characteristics are used to define an oil well?

Adapting Technology to Find a Commercial Formula:

In conventional reservoirs, Darcy flow and flow within natural fractures, particularly where they are open and well
connected, are likely important. In unconventional reservoirs, however, where low overall effective permeability is

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a pre-condition to the existence of oil over gas, these two natural flow mechanisms are probably not sufficient to
enable commercial development. Hydraulic fracturing therefore becomes necessary to stimulate the well to produce
commercial volumes. While the classic bi-wing planar fractures might exist, branches and dilation of natural
fractures that can increase dissipation of fracture pressure probably also occur during the hydraulic fracturing
process. If the two horizontal stresses are similar the aspect ratio can reflect a more radial shape to the fracturebroken and dilated rock volume.
Generally, in Alberta, fracs and the offsetting stimulated reservoir volume tend to be oriented in a vertical plane,
more or less perpendicular to the Rockies, with a high horizontal aspect ratio reflecting large stress anisotropy in the
horizontal plane. There are local variations in the horizontal plane stress anisotropy. We believe that the Kakwa
area has significant variations from the regional pattern, due to the Montney depositional environment described
previously. We hypothesize that the tough limestone and dolomite features protrude into the over-draping strata and
act like tacks resisting the translation of lateral force (Laramide Orogeny residual force) to the overlying beds. The
result is that most of the Kakwa field lies in a stress shadow where we expect the anisotropy in the lateral forces to
be less pronounced than is typical for the Montney. This relative stress uniformity enhances two dimensional (i.e.,
in the horizontal plane) dilation of natural fractures, when opened by the hydraulic fracturing operations. We
postulate that this enhanced dilation of natural fractures further reduces the aspect ratio of the hydraulic fractures
(i.e., causing dendritic fractures) and increases the extent of stimulated reservoir volume (SRV).
A producing well can drain the high effective permeability fracture network very quickly. This results in a large
pressure gradient between the hydrocarbon in the inter-granular pore space and the fracture pore space. The spacial
pressure gradient (dP/dx) can readily exceed the rock strength and ability to contain the pressure over small
distances. Small cracks may initiate and propagate away from the fracture system so long as the pressure gradient is
sufficient to overcome the rock strength. A good analog is the Cold Production phenomenon, now well
understood in primary heavy oil production, yielding a similar propagation of rock failure from a rapidly depleted
wellbore into a low transmissibility hydrocarbon reservoir (see Tremblay et al, Modeling of Wormhole Growth in
Cold Production, Transport in Porous Media, Vol. 53, 197-214, 2003, and Swatzky et al, Tracking Cold
Production Footprints, SPE paper 2002-086).
Certainly the hydraulic fracture stimulation is important to the initial performance of wells in tight and shale
reservoirs. Over the life of the well, drawdown induced stimulation may or may not be significant to productivity or
the overall recovery. In the extreme, the combined anthropogenic alteration of the reservoir could be very
important. It is possible that conventional Darcy flow over significant distant is not a significant contributor to
recovery and there may exist a sharp contrast between recovery from portions of the reservoir affected by the
fracture or the drawdown induced cracking and the undisturbed reservoir.
Because of the added complexity of phase distribution and flow in unconventional systems like the Montney play in
Kakwa, and the Eagle Ford in Texas, mathematical models that can be calibrated to historical data and used to
reliably predict the flow of fluids from, and within, the reservoir, do not exist. Furthermore complexity of the
distribution of hydrocarbons in the reservoir and the flow mechanisms makes conventional volumetric prediction of
recovery difficult. Clearly higher recovery will be expected from the portions of the reservoir connected to the
wellbore by the anthropogenic fracture system but some recovery should also emanate from the un-stimulated
reservoir volume. That is not to say that modeling these reservoirs as if they are a Darcy flow dominated system is
not a useful exercise. We certainly feel, however, that these reservoir engineering methods are greatly impaired by
the complexity of the physics of flow in these newly exploited tight reservoirs and thus are best used as
reasonableness tests to decline analysis.
Modeling the Unconventional Kakwa Montney Reservoir:
A compositional simulation model was used to initialize a portion of the Upper Montney reservoir with oil over gas
and an increasing pressure gradient in the down-structure direction. A typical, or conventional, reservoir model can
be initialized with static, gravity stabilized, fluid contacts and pressure distribution. A dynamic, over-pressured,
tight, mixed hydrocarbon system model, however, requires a period of flux so as to create an initialized model
with varying pressure gradients and oil over gas. Replicating millions of years of history is obviously impractical
and would have to somehow be truncated into a reasonable time frame. To achieve this, an injector well (labeled
Kitchen well in the model) injects gas for ~200 years (beginning 1800-01-01) in the down-structure end of the

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reservoir model, predominantly along the lowest, 2 meter thick layer (of 27 layers) with permeability enhanced by
three orders of magnitude. Subsequent to this 200 year preamble the enhanced permeability is re-sealed, as high
permeability streaks may have actually done (to a lesser extent) and subsequent modifications are then affected to
facilitate a history match (i.e., post production start time for the 9-12-64-4W6M well that is being history matched).
Coincidental with gas influx, occurring at the kitchen end of our reservoir control volume, is an Efflux well,
producing from the up-structure end of the reservoir model. Note that both wells produce, from the bottom three
model layers, at approximately 70 Mcf/d gas. The Kitchen well injects a recycled portion of the model
composition (the lighter C1, C2 & C3 components), and therefore injects no oil. The Efflux well is assigned a
primary constraint of gas production but will produce whatever the compositional model proportions out as gas
and oil. For simulation runs used in this study, single phase oil and gas identities were based on fluid properties
using the following criteria;
a)

At supercritical conditions (i.e, grid block temperature and pressure are higher than mixture Tc & Pc),
fluid is defined as gas;

b) At sub-critical conditions, fluid is defined as oil when its molar volume is less than critical molar
volume. Mixture critical properties are determined using the Peng Robinson equation of state (EOS).
The single porosity model is based on a detailed core analysis (meter-by-meter porosity/permeability definition from
61 meters of core), obtained from the Upper Montney interval in the well located at 9-23-64-4W6M. An arithmetic
average permeability of about 0.0015 mD (or 1.5 micro-Darcies) was determined from previous (non-compositional)
simulation models, used to achieve a history match of the same horizontal well modeled in this study (located at 912-64-4W6M). This average permeability represents an effective permeability, distributed over a drainage area that
extends about 55 hectares. In other words, the drainage area extends about 100m out from all sides, and ends, of this
2,430 m long horizontal lateral. If we were to normalize the well length to ~1500m laterals, this spacing would
translate to about seven wells per section, per ~50m of gross pay interval.
This compositional model covers an area of about 4.7 km by 2.4 km, is 52 meters thick and represents a portion of
the Upper Montney reservoir in the Kakwa field. Development plans for this field include three layers of
development wells to access and drain the entire 200 meter thick Upper, Middle and Lower Montney intervals, not
necessarily of comparable pay thickness. The modeled pay interval, used in this study, represents what we think can
be readily accessed, and drained, when placing hydraulic fractures that typically extend to about 40 m, vertically,
(extending 20 m up, and 20 m down, from the horizontal lateral elevation), and may extend as far as 60 meters,
based on independent fracture models.
The 9-12-64-4W6 horizontal well is completed orthogonal to the fingering gas/oil transition zone (i.e., in NW SE
direction), on strike with the prevailing structure and parallel to the minimum stress direction. The 24 fractures were
modeled as planar fracs with a half length (Xf) of 73.75m, where permeability was set at a scale of 10s of milliDarcies, during initialization, along a 0.4 m thick row of gridblocks. Previous modeling efforts, using noncompositional models, yields excellent history matches with fracture lengths that correlated to the applied fracture
tonnage. For each tonne of displaced fracture proppant, the matched fracture half length ranged from about 1.0m to
1.4m, while also modeling a fracture height of about 45m. The fracture height in this model was assumed to
penetrate the modeled thickness (i.e., 52 m, likely a conservative estimate of effective pay for a single layer,
accessed by horizontal laterals). Note that the modeled fracture width is wider than reality to ensure numerical
stability however still honors real dimensionless fracture conductivities (i.e., Fcd = (kf x w)/(km x Xf)). In other
words, to be consistent with the real fracture conductivity, any widening of the fracture width (in the model) is
compensated for by reduced fracture permeability.
No anisotropy is included (i.e., kx = ky) in the model and the vertical to horizontal permeability ratio (kv/kh) was set
equal to 0.1. Various studies of stress regimes from well rock strength logs, frac data and cores, helped us narrow
down the error bars on both these assumptions and therefore eliminate them as potential history match variables.
Relative permeability curves were initialized for a three phase system using Corey correlations and linear isoperms
within the model. Porosity varies and is defined for each model layer, averaging about 5%. Connate water
saturation, as defined in the relative permeability end points, is 16%.

SPE 162824

17

Eight (8) components were used to define (via viscosity, molecular weight, critical properties and the PengRobinson equation of state) both the rich gas (R.G.) and volatile oil (V.O.) hydrocarbon fluids for the two respective
cases modeled in this study. A history match of the 9-12-64-4W6 well, which began production on 2011-07-13, was
achieved with both hydrocarbon systems, and then forecast to 2050-01-01 to predict EUR and drainage area.
Figure 11 shows the pressure distribution throughout the initialized model. Note that the 200 years of history,
modeled to achieve the appropriate phase, and pressure, distribution, was initialized (at 1800-01-01) with a reservoir
pressure of 37 MPa, equivalent to a gradient of 12.5 kPa/m. Thus we are able to save time by not having to
pressure up the reservoir. Rather, we are maintaining a consistent pressure at the model centroid, approximately
where the horizontal well is completed, and changing pressure (and phase distribution) at respective down-structure
and up-structure ends of the model. As influx (at the Kitchen injector) is more or less equal to efflux (at the
Efflux producer), the average model pressure remains the same while the influx end of the model sees an increase
in pressure (> 13.5 kPa/m) and pressure in the efflux end of the model decreases (to < 10.5 kPa/m).

Horizontal Monty 1 well

completed here.
Gridblocks narrow when
approaching lateral and
orthogonal hydraulic fracs,
for numerical stability.

K
i
J
i

I
i

Figure 11: Initializing Simulation Model Gas Under Oil and Pressure Gradient

Weve replicated a fingering transition zone by enhancing permeability (by three orders of magnitude), along a
row of gridblocks, creating a preferential flow path for gas emanating from the Kitchen injector in the model. The
single gas finger, shown in Figure 12, is an example of how the heterogeneous distribution of fracture and matrix
permeability can readily yield inter-fingered transition zones. Figure 13 shows the phase distribution, at the same
time, viewed from the side (J direction, layer 93) where the oil phase (green) over-rides the gas phase (orange), 2)
the structural relief in the model (more or less emulating structural changes on either side of the 9-12 well), and the
location of Monty (model well name assigned to the 9-12 well), completed in/out of the page.

18

SPE 162824

Horizontal well
completion spans the
width of the model
with 24 orthogonal
hydraulic fractures.

Figure 12: Plan View of Gas Saturation Showing Fingering Transition Zone

Horizontal lateral,
completed in/out of
page, could intersect
gas finger at well or
via fractures.

Figure 13: Side View of Initialized Model with Oil over Gas

SPE 162824

19

Compositional Model Objectives:

The primary objective of the compositional modeling exercise is to show how a history match using two different
re-combined gas/liquid analyses can be achieved. Achieving this objective demonstrates that other phenomenon may
be responsible for exhibited production characteristics. Also, if a comparable history match, and ultimate recovery,
can be achieved with either of the conventional definitions of an oil or gas well (as defined by the phase
envelope of the recombined well effluent and myriad other parameters, including mole fractions of certain heavy
end hydrocarbons and fluid API gravities), then couldnt a similar development plan, of either type of resource, be
readily justified? We propose they should be as the recovery of this unconventional resource can only be optimized
with reduced well and fracture spacing that requires consistent regulations. Note that both history matches, and
forecasts, are applying the same number of hydraulic fractures, fracture lengths, fracture spacing and well drainage
area (i.e., modeled area).
Within the area of our model study (i.e., the Rich Gas Volatile Oil transition zone) the aggregated volumes of the
various compositions that come in contact with a producing well, will still be in single phase. The development of
this resource is relatively insensitive to whether this single dense phase acts, in aggregate, as a hydrocarbon system
that is slightly to the left, or to the right, of the representative phase envelope critical point. We appreciate that this
is an academic discussion as we cannot support these claims with any fluid analyses that have any basis in reality.
We have no means of mapping the composition profile of the real well at the wellbore, much less any distance away
from it in any direction. We can safely conclude, because of the potential gradients that the dynamic system, as we
encounter it today, has extremely low overall permeability but the prevalence of natural fractures suggests that there
are likely to be regions of higher permeability, more conductive of the highly mobile gas, than the surrounding
matrix material. We do not know the shape of these permeable patches but think of them as giraffe spots, in a
continuum of extremely low permeability rock. Perhaps, given the linear finger shaped gas intrusions, as modeled
in this study, zebra stripes of gassier fluid, might serve as a better analog (or animalog). Whatever the shape of
the permeability features that provide mobility for the gas phase diffusion, they tend to smear the
phases/compositions across the various permeability interfaces.
We can, however, model the extreme interpretations of observed gas/liquid rates, recombined at measured
compositions. If these extremes still yield comparable production characteristics and ultimate recovery, then a valid
argument can be made for a consistent development plan, regardless of the more conventional well classification.
Ultimately, the conventional definitions of wells and the resulting development implications should be discarded
completely for any given unconventional hydrocarbon system. In their place, it seems to make more sense to deploy
a development plan suited to the unconventional reservoir that is probably not suited to either a conventional gas or
a conventional oil reservoir of similar dimensions with a similar total inventory of hydrocarbon species.
Liquid Yield:
Forecasting the liquid yield from the Kakwa Montney reservoir is challenging. The modeled 9-12 well has
produced at liquid yields that exceeded 600 Bbls/MMcf and dropped below 130 Bbls/MMcf of wellhead condensate
(excluding the shallow cut refrigeration plant liquid recoveries). Currently (July 30, 2012) the well is producing 1.8
MMcf/d and 240 B/d condensate at a tubing pressure of 4,000 kPa (choked). An additional 30 Bbls/MMcf liquids
(NGLs) are recovered at the plant. For simulation modeling purposes, however, only raw wellhead volumes are
tracked in history files.
The erratic nature of the actual liquid/gas ratio suggests any constant value used in a recombined analysis is more
likely to inaccurately reflect the composition of the aggregate effluent from the well from time to time. Further,
before entering the well it is likely that the majority of the reservoir effluent passes through an open or very high
permeability volume of space that will affect the ratio of liquid and gas entering the well itself. Since the
interconnected hydraulic fracture volume, as initially created, is very large (estimated at more than 15,000 m3) and
may increase with drawdown induced cracking, or be reduced by fracture closure (including proppant crushing and
imbedment), we have very little confidence that the effluent from the well, at any moment, represents the effluent
from the reservoir rock. Also, as previously discussed, we have no confidence that even a stabilized rate would be
representative of all the various hodgepodge compositions along the wellbore, particularly as fluids are drawn
from further in the reservoir over the producing life of the well. Be that as it may, we can show that when
recombining the same gas and liquid composition at two different LGRs (both justifiable), in keeping with
conventional means of establishing phase envelopes, we can arrive at two different, conventional, well types. As
this field is producing from the Volatile Oil Rich Gas transition zone, other techniques often used to define the

20

SPE 162824

hydrocarbon system (e.g., condensate API gravity, color, gas mole fraction composition, etc.) are equally
interpretive as they fall on either side of the oil/gas definition for wells located within a small proximity and often
at the same structural elevation.
th

Table 2: Recombined Samples from July 26 , 2011 and Model Compositions

Volatile Oil Reservoir Model

Recombined Sampled Gas/Liquid @ 220 Bbls/MMcf

Reservoir
Separator
Separator
Separator
fluid Mole frc.
oil
Mole frc. WTG Mole frc.
gas
Mole frc.

Component
-----------------------------------------------------------------------------------------------------------------C1
70.3632 0.7036
0.5165
C2
8.5685
0.0857
0.3471
C3
4.6371
0.0464
0.6966
C4
2.7218
0.0272
1.3173
C5
1.5121
0.0151
2.2423
C6
1.1089
0.0111
4.1835
C7-C8
2.7218
0.0272 20.5429
C9-C10
8.3669
0.0837 70.1538
-------------------- ------------ ------------ -----------Mol frc of well
1.0000
1.0000
0.0847
Mol wt, lb/gmol
0.0663
0.2726
Density, gmol/cuft
132.5927
Density, lb/cuft
36.1398

0.0052 70.3632 0.7036

0.0035
8.5685
0.0857
0.0070
4.6371
0.0464
0.0132
2.7218
0.0272
0.0224
1.5121
0.0151
0.0418
1.1089
0.0111
0.2054
2.7218
0.0272
0.7015
8.3669
0.0837
------------ ------------ -----------1.0000
1.0000
1.0000
0.0663
1.1952
0.0793

Rich Gas Reservoir Model

norm
Shallow Cut Recombined

Simulation

RF

Samples

Model Comp

50
75
95
95
95
95

15.1
15.2
12.5
10.4
29.4
137.4
220.0

15.2
15.5
12.4
10.3
30.0
138.0
221.4

model composition from mid-year,

2011 and is very similar to
recombined sample.

Recombined Sampled Gas/Liquid @ 153 Bbls/MMcf

Component
-----------------------------------------------------------------------------------------------------------------0.0052 73.8648 0.7386
0.0034
8.7790
0.0878
0.0066
4.5409
0.0454
0.0120
2.5227
0.0252
0.0198
1.3118
0.0131
0.0384
0.9082
0.0091
0.2040
2.0182
0.0202
0.7106
6.0545
0.0605
------------ ------------ -----------1.0000
1.0000
1.0000
0.0663
1.1952
0.0793

recomb

----------------------------------------------------------------------

C1
79.8042 0.7980
0.0582
0.0583
0.8139
0.8311
0.6983
0.7050
C2
9.6797
0.0968
0.0370
0.0370
0.0931
0.0951
0.0849
0.0857
C3
5.1697
0.0517
0.0537
0.0537
0.0438
0.0447
0.0458
0.0462
C4
2.9116
0.0291
0.0639
0.0640
0.0191
0.0195
0.0265
0.0268
C5
1.4134
0.0141
0.0622
0.0623
0.0060
0.0061
0.0151
0.0152
C6
0.6933
0.0069
0.0591
0.0592
0.0018
0.0018
0.0111
0.0112
C7 - C8
0.3129
0.0031
0.1560
0.1561
0.0014
0.0014
0.0264
0.0267
C9 + C10 0.5090
0.0153
0.0002
0.5095
0.0002
0.0002
0.0825
0.0833
------------ ------------ ------------------------------- ------------ ------------ ------------ ------------ -----------0.9153
1.0000
0.9991
1.0000
0.9793
1.0000
0.9905
1.0000
0.0472
1.2004
0.0567

Reservoir
Separator
Separator
Separator
fluid Mole frc.
oil
Mole frc. WTG Mole frc.
gas
Mole frc.

C1
73.8648 0.7386
0.5223
C2
8.7790
0.0878
0.3428
C3
4.5409
0.0454
0.6600
C4
2.5227
0.0252
1.1963
C5
1.3118
0.0131
1.9809
C6
0.9082
0.0091
3.8355
C7-C8
2.0182
0.0202 20.3974
C9-C10
6.0545
0.0605 71.0648
-------------------- ------------ ------------ -----------Mol frc of well
1.0000
1.0000
0.0847
Mol wt, lb/gmol
0.0663
0.2726
Density, gmol/cuft
132.5927
Density, lb/cuft
36.1398

Normalized Mole fraction of sampled liq/gas

Comp
liq
Norm
gas
norm

Normalized Mole fraction of sampled liq/gas

Comp
liq
Norm
gas
norm

recomb

norm

----------------------------------------------------------------------

C1
80.6778 0.8068
0.0582
0.0583
0.8139
0.8311
0.7315
0.7388
C2
9.5627
0.0956
0.0370
0.0370
0.0931
0.0951
0.0873
0.0882
C3
4.9014
0.0490
0.0537
0.0537
0.0438
0.0447
0.0454
0.0458
C4
2.6459
0.0265
0.0639
0.0640
0.0191
0.0195
0.0246
0.0248
C5
1.2497
0.0125
0.0622
0.0623
0.0060
0.0061
0.0127
0.0128
C6
0.6362
0.0064
0.0591
0.0592
0.0018
0.0018
0.0086
0.0087
C7 - C8
0.3109
0.0031
0.1560
0.1561
0.0014
0.0014
0.0197
0.0199
C9 + C10 0.5090
0.0154
0.0002
0.5095
0.0002
0.0002
0.0604
0.0610
------------ ------------ ------------------------------- ------------ ------------ ------------ ------------ -----------0.9153
1.0000
0.9991
1.0000
0.9793
1.0000
0.9901
1.0000
0.0472
1.2004
0.0567

Shallow Cut Recombined

Simulation

RF

Samples

Model Comp

50
75
95
95
95
95

15.0
14.1
10.5
8.1
21.9
83.4
153.0

14.9
14.4
10.8
8.4
22.2
82.7
153.4

model composition from mid-year,

2011 and is very similar to
recombined sample.

For this study, and for our example, we take the oil and gas composition as sampled on July 26th, 2011 (shown in red
in Table 2) and recombine them first at 220 Bbls/MMcf and then at 153 Bbls/MMcf. These two values represent
different periods used to average LGR on or about the July 26th sampling date. The Montney reservoir temperature,
used in the model, is 95 degrees Celsius (203 degrees Fahrenheit) and critical temperature of our mixture is
coincidental with reservoir temperature when recombining these fluids at about 185 Bbls/MMcf (using the Peng
Robinson EOS). Consequently, when recombining fluids at the higher yield, the Kakwa Montney reservoir
conditions are within the Volatile Oil side of the generated phase envelope, to the left of the critical point and above
the cricondenbar (3,334 psia, or 22.99 MPa) as shown in Figure 14.
On the other hand, when recombining fluids at the lower yield (153 Bbls/MMcf), the entire phase envelope,
including the critical point, moves to the left (i.e., to lower temperatures) and the reservoir conditions fall within the
Rich Gas side of the phase envelope, to the right of the critical point, as shown in Figure 15.
Phase envelopes were generated (with Peng Robinson equation of state) using recombined compositions that honor
each component up to decane (C10). For easier, and faster, simulation run times the number of components were
reduced (as is typically done for compositional modeling) to eight. Also, inert gases were removed, and the eight
hydrocarbon components were normalized to yield a total mole fraction of 1.0 in the simulation model. The
modeled components (or pseudo components) have combined the properties of C7 + C8, C9 + C10, as well as iC4
+ nC4 and iC5 + nC5, as shown in Table 2.
Also shown in Table 2 is the mole fraction of each component produced from Monty (the modeled horizontal
well) from the same point in time. Both the volatile oil and rich gas cases yield comparable compositions, and
liquid yields, as the real, re-combined, fluid samples. The three smaller columns of figures, on the right hand side
of Table 2, compare liquid yields based on typical shallow cut recoveries and given mole fractions, for both
recombined and modeled fluids.

SPE 162824

21

Pres = 37 MPa (5370 psi)

Tres = 203 deg F

Pressure, psia

Volatile Oil Phase Envelope

Temperature, degree F

Figure 14: Phase Envelope emulates Volatile Oil when LGR = 220 Bbls/MMcf

Pressure, psia

Rich Gas Phase Envelope

Temperature, degree F

Figure 15: Phase Envelope emulates Rich Gas when LGR = 153 Bbls/MMcf

Pres = 37 MPa (5370 psi)

Tres = 203 deg F

22

SPE 162824

Critical properties (Tc, Pc, Vc), accentric factors, molecular weights and viscosities, were entered into the model for
each component. When combining components, properties were averaged to represent the pseudo-component.
The only difference in composition, between initialized V.O. and R.G. models, are the mole fractions assigned to the
eight components, as determined from gas/liquid recombinations. Component properties or EOS parameters have
not been altered to facilitate a history match.
Achieving a History Match:
The detailed characterization of the hydrocarbon fluid system is not possible due to the myriad compositions/phases,
and it may also be secondary in its relevant impact as a history match variable. The primary premise of this history
matching exercise is not to suggest that fluid characterization, and variations of the Equation of State (EOS) arent
relevant but when so much uncertainty is introduced by the wide variations of liquid yield, is it possible that
comparable history matches can be achieved at bookend extremes of the liquid yield, by varying other variables?
The answer turns out to be yes, quite readily.
Observed GOR (or LGR) trends can be matched with either a Volatile Oil or Rich Gas reservoir. This does not
negate the relative importance of fluid characterizations but it does show it shouldnt be used as definitive
demarcation lines or distinctions between hydrocarbon systems, particularly in unconventional reservoirs. Other
alternatives exist to facilitate a history match, and probably with variables that have a much larger impact on the
match.
The primary variables affecting the history match, for either the Volatile Oil or the Rich Gas models, include;
1) Order of magnitude permeability changes within, and proximal to, the hydraulic fractures. Changing
fracture conductivity, extent (laterally and vertically) and thickness, affecting the extent of stimulated
reservoir volume (SRV), probably has one of the greatest impacts on the history match.
2) Component viscosity coefficients particularly the one affecting the viscosity of the heaviest (of eight)
components (C9 - C10). Note that this coefficient can be tuned just as readily in the model as in the lab,
but must be kept consistent (and was) between V.O. and R.G. model components.
3) Increasing fracture permeability accelerates oil production decline subsequent to reaching bubble point (in
the case of the V.O. model) but then prolongs low production rate in the forecast.
4) A history match can be affected by biasing the implementation of high perm streaks (to oil dominated grid
blocks, for example), mimicking dendritic fractures that originate from primary hydraulic fractures.
5) Oil rate can be reduced by increasing permeability in layers where higher gas saturation prevails (usually
above the horizontal lateral) and/or vise versa. Note that these conventional gas/oil separation conditions
prevail only in 1) a high conductivity fracture and 2) after gas has boiled out of the oil (i.e., after pressure is
reduced below the bubble point in the V.O. model).
6) As bottom hole flowing pressure drops below the bubble point gas breaks out of the dense phase volatile oil
solution, enhancing the preferential flow of gas and resulting in rapidly declining oil production.
Increasing or decreasing fracture conductivity prolongs or shortens, respectively, single phase production.
7) Upon reaching dew point (in R.G. model) condensate forms and begins accumulating in the stimulated
reservoir volume (SRV). This entrained volume grows as the pressure is reduced further into the reservoir,
resulting in declining LGR.
The primary constraint, used in both the V.O. and R.G. models was gas rate. Upon violation of the primary
constraint (i.e., if gas rates could not be achieved with given well specifications), a bottom hole flowing pressure
(the secondary constraint) was used, where upon the model yields whatever rate, and phase, is possible at the
specified bottom hole flowing pressure (BHFP).

SPE 162824

23

Table 3: Cumulative Oil and Gas Production

Historical

Volatile Oil

Volatile Oil

Volatile Oil

Rich Gas

Rich Gas

Rich Gas

(2012-06-18)*

(2012-06-18)

(2020-01-01)

(2050-01-01)

(2012-06-18)

(2020-01-01)

(2050-01-01)

Oil (MBbls)

119.9

120.6

345.2

621.5

123.2

378.0

643.3

Gas (Bcf)

0.579

0.625

2.540

5.060

0.705

2.516

4.498

Oil (B/d)

239

250

51

24

250

58

18

Avg. LGR

207

193

136

123

175

150

143

(Bbls/MMcf)

* Note: Historical data is up to July 30, 2012 but is compressed to 2012-06-18 to remove down-time.

An excellent match on the oil production history was achieved, with a less than 3% difference between real
cumulative production and modeled cumulative production for either the Volatile Oil or Rich Gas model cases.
Also, both cases, when forecast to 2050-01-01, yield comparable recoveries of oil (622 643 MBbls) and gas (4.5
5.0 Bcf). Cumulative gas production, in the Rich Gas case, is about 22% higher than actual production, by the end
of the history match period. Additional work is required to improve this gas match and will focus primarily on;
1) Modeling the effects of the various stops and starts. Huge draw-downs with periodic shut-in periods
(required to allow for facility construction) may have resulted in condensation (in the case of a R.G.
hydrocarbon system) in the near wellbore vicinity. This pooled liquid could have been subsequently
cycled out of the wellbore at reduced (choked) gas rates. Lower drawdowns (i.e., higher BHFPs) in the
model will not capture this brief but high LGR if producing above the two phase region of the phase
envelope during the initial ~ 6 months.
2) Reducing critical liquid saturations (i.e., the saturation level above which liquid is mobilized), increasing
oil rates. This would have to be implemented with cases that include higher drawdowns and down-time.
3) Applying imbibition and hysteresis curves to retain liquids, in SRV, during periods of cyclic drawdowns.
Aside from the higher gas rates, during the early months of production in the R.G. model, the gas and oil trends, are
matched and forecast with a reasonable trajectory. Beyond the transient flow period, the R.G. model seems to
behave as it should, and was therefore used to forecast and compare EURs with the V.O. model.
History matches, for both the V.O. and R.G. models, were achieved by modifying permeability in the stimulated
reservoir volume (SRV) and hydraulic fractures. Many of the usual suspect variables, including fluid component
properties (i.e., viscosity, critical properties or molar weights), relative permeability, capillary pressure (assumed
zero, for our purposes, between all phases, for all cases), remained relatively consistent between models. The
primary changes included alterations to absolute permeability within the hydraulic fractures and the SRV (i.e., the
row of gridblocks bordering the hydraulic fracture grid blocks).
We postulate that a match can be readily achieved by just modifying absolute permeability in the vicinity of the
wellbore/hydraulic fracture network. Isotropic conditions are maintained (i.e., kx = ky) and the kv/kh ratio is also
held constant (kv/kh = 0.1). So whether reservoir fluid is characterized as volatile oil or rich gas, the two
compositions coincidental with these characterizations, could yield very comparable history matches by just altering
permeability in the SRV. The type of permeability modifications implemented, to achieve a match, is readily
justified, and one to two orders of magnitude permeability changes, applied to one or three layers, in a 27 layer
model, can still yield comparable arithmetic average permeabilities (between the altered and non-altered, or the V.O.
and R.G. models).

24

SPE 162824

Grid blocks show oil saturation

increasing and subsequently
draining from insitu storage
volume related to extent of
stimulated reservoir volume, and
how much oil it can retain.

Figure 16: Matching 9-12 History with Volatile Oil Model

Fractures were modeled as planar fractures with a width of 0.4 m (for both models), to ensure numerical stability.
Also, absolute permeability in various layers (up to four) were enhanced by up to two orders of magnitude,
essentially emulating the dilation of natural fractures in select layers. These layers showed higher oil saturation
(upon entering 2-phase region of phase envelope) proximal to the wellbore and were targeted to increase oil
production (to achieve a match. Increasing permeability in these layers (for both the V.O. and R.G. models)
essentially increased the arithmetic average permeability up to 25% higher than the initial 0.0015 mD average. This
is a reasonable increase but may suggest effective permeability is more enhanced, closer to the hydraulic fracs, and
then diminishes towards the edge of the well DSU. Fracture permeability, used to achieve a history match, was 60
mD and 2 mD, for the V.O. and R.G. models, respectively, translating to a dimensionless fracture conductivity of
about 140 for the V.O. model and 15 for the R.G. model. The conductivity in the Rich Gas model is biased towards
a lower value to reduce the BHFP (i.e., increase drawdown) and condense more oil.
Figure 18 is a profile of oil saturation in the R.G. model and shows higher oil saturation resides in the higher
permeability intervals which are also more influenced by gravity. It poses the question; is there a way to take
advantage of the natural separation process (condensate under-riding gas) in the higher perm/porosity SRV volume?
Could completions bias the hydraulic fracturing process such that higher conductivity prevails in the lower portions
of the fracture?

SPE 162824

Figure 17: Matching Oil with Rich Gas Composition

Figure 18: Accumulation of Oil Saturation next to Hydraulic Fracture

25

26

SPE 162824

Conclusions:
A pre-condition for the high pressure in the Montney unconventional reservoir, is a pervasive low permeability. If
permeability were higher, there would be no dynamic flux and the reservoir pressure distribution would equalize (as
in conventional reservoirs). This extremely low permeability can be readily increased by elevating pore pressure,
and perhaps (re)connecting abundant natural fractures, essentially bringing the well to the reservoir. Any
permeability enhancement would be proximal to the connected well/hydraulic fracture network and would therefore
exclude any possibility of enhanced recovery schemes. Economic recovery is maximized only by optimizing the
primary recovery strategy, which may include the following;

Well orientation
Well position in the producing interval
Well length
Well spacing
Hydraulic fracture spacing
Hydraulic fracture size, fluid system and proppant schedule
Production / drawdown strategy

As to optimizing these parameters, there is no difference as to what a prudent operator would do regardless of which
side of the critical point the reservoir depletes. The reservoir is over-pressured with oil acting as a leaking barrier to
the dissipation of gas emanating from a deeper distal source. The migration of gas through the oil in the most
permeable pathways, and permeability inhibited diffusion along those pathways, has created a hodgepodge of
hydrocarbon compositions through the oil cap, or oil/gas transition zone, all the way to the deep basin edge where
water becomes the continuous phase. In this region it is impossible to reliably pick a well trajectory (vertical or
horizontal) that would connect only regions saturated with what would have been traditionally classified as oil or
liquids rich gas. These conventional classifications are neither valid nor useful in determining an optimal
development strategy.
This study confirms that even when adhering to conventional classifications, the estimated ultimate recovery of
either the Oil or Gas well is comparable. Identical well/fracture configurations were modeled with the two
different fluid characterizations to essentially recover oil and gas from comparable reservoir volumes. The
development strategy and associated well spacing would therefore be anticipated to also be identical. The more
specific conclusions from this study are tabulated in the following Geology and Simulation Model sub-titles.
Geology:
1) The Kakwa Montney reservoir produces liquid-yields ranging from 50 to more than 300 Bbls/ MMcf;
2) This area of the Montney trend benefits from higher liquids content due to the presence of;
-

A lower geothermal gradient.

Better reservoir quality due to the proximity to the paleo-submarine shelf.
Natural fractures that improve reservoir performance and recovery.
Observing and understanding offset activity to help us confirm and refine our development strategy.

3) Up-dip producing wells, in general, have higher liquid yields than down-dip wells. There are, however
exceptions to this rule, consistent with the variable, fingering, transition zone.
4) Factors affecting liquids content;
-

Rock-Eval pyrolysis; the Montney interval, underlying the Kakwa field, is within the oil maturity window.
Thermal cracking of oil from variable heat flow through time, increased reservoir pressure and resulted in variable
liquid-gas ratios.
A low geothermal gradient has preferentially preserved oil, condensate & natural gas liquids yielding highest ratios
observed within the unconventional Montney fairway. This is due to less thermal cracking over geologic time.
Various core and thin section analyses has provided ample evidence that this reservoir is extensively fractured and
could therefore readily enhance effective permeability when re-connecting with hydraulic fractures.

Simulation Model:
1) Comparable volumes, of oil and gas, were recovered from the history matched 9-12-64-4W6M well, from both
the Volatile Oil and Rich gas models.
2) The drilling spacing unit (DSU) and associated development plan should therefore be the same whether a well
is deemed to be producing Gas or Oil.
3) In the Rich Gas model, liquid begins accumulating in the reservoir, within and beyond the SRV, where reservoir
pressure has fallen below the dew point, occurring at about 6 months from start production. This liquid drop-

SPE 162824

27

out results in declining oil rates and the liquid/gas ratio (LGR).
4) In the Volatile Oil model, when pressure drops below the bubble point the single phase oil releases gas and
reduces the LGR as the high mobility gas phase begins occupying more volume and flows more freely, in the
wellbore/SRV vicinity.
5) Although oil over-rides gas in the reservoir, the more conventional segregation of gas over oil is observed
in the higher permeability fracture and SRV. Is it possible to produce more liquids by biasing fracture
stimulation towards the lower portions of the hydraulic fracture?
6) A history match is more readily achieved when applying permeability enhancements towards portions of the
hydraulic fracture interval (typically towards the bottom) where higher oil saturation can be accessed.
7) The tuning of EOS parameters would seem redundant given the uncertainties associated with the widely varying
liquid yields observed during the early stages of production (~6 months) in liquids rich Montney wells.
8) More modeling work is required to explore;
-

Effects of additional permeability enhancements in preferentially oil saturated gridblocks, proximal to the
wellbore/fracture network, as required to facilitate a history match.
Varying the composition (i.e., pseudo-component properties), particularly of the heavy end hydrocarbons, to achieve a
match of LGR.
Model permeability so that it is pressure sensitive (i.e., dP/dx) for some distance (another variable) away from the
wellbore.
Enhancement of inter-layer dP/dx.
Sensitivities on the postponement of high drawdown, which reduces the BHFP to levels below the bubble point or dew
point (as the case may be), to prolong single phase (dense phase VO) production.
Sensitivities on effects of maximum drawdown. After committing to inevitable entry into the 2-phase region,
maximize drawdown to mitigate accumulation of liquids (via imbibition & hysteresis) in wellbore vicinity.

Acknowledgments:
The authors would like to thank all contributors from the Seven Generations Energy Ltd. team that make this paper
possible. Particularly, we appreciate the contributions from Pat Carlson for not only reviewing this paper but for
contributing to the completions and reservoir fracture aspects of this study.

28

SPE 162824

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