Brisbane-based James Walker, chief operating officer of private company WellDog, which is seeking a partner to take its shale liquids and gas-hunting technology research to the next level, spoke to Energy News about its potentially implications for the hydrocarbon industry.

Technology that more accurately identifies different hydrocarbons in the shales – not the locations of the hydrocarbons – could not only assist international efforts to unlock their shale formations and reduce the industry’s environmental footprint, but could provide yet another step change in what has already been an incredible revolution in the US.

After proving its technology in the CSG space in Queensland over several years, WellDog recently completed an 18-month alpha trial developing a new technical service to better locate natural gas and gas liquids in shale formations.

Having used WellDog’s patented downhole Raman spectroscopy technology and Shell’s geochemical and petrophysical experience in shale gas evaluation in the alpha trial, Shell is now leading beta trials of the technical service, but in the field in US shales and in WellDog’s Wyoming laboratory.

However, WellDog won’t stop there. Walker said the company was seeking other partners to take beta trials forward, either in Australia or overseas.

Either way, such technology is badly needed given companies like New Standard Energy are farming down their Canning Basin assets in Western Australia as wells cost closer to $20 million per well, more than the $13 million they first thought it would cost when they struck the partnership with major ConocoPhillips.

The EIA said last year that tight oil and shale gas resources – quickly producible in large volumes at a relatively low cost – have revolutionised US oil and natural gas production, providing 29% of total US crude oil production and 40% of total US natural gas production in 2012.

The extent to which the US shale boom has taken the world by storm was detailed last year when the US Energy Information Administration’s last updated assessment of shale oil and gas resources in 2013 revealed a staggering increase of 48 basins in 32 countries in 2011 to 137 last year across 41 countries.

Wells drilled in Argentina, China, Mexico and Poland have helped clarify the geologic properties and productive potential of the shale formations, but they vary so wildly that the ability to recreate North America’s success is still unclear.

“However, given the variation across the world’s shale formations in both geology and above-the-ground conditions, the extent to which global technically recoverable shale resources will prove to be economically recoverable is not yet clear,” the EIA said in July last year.

“The market effect of shale resources outside the US will depend on their own production costs, volumes, and wellhead prices.”

While the oil world has shifted seismically since then, the general principal still applies.

Enter WellDog and its technology, which could next be applied to shale oil once its gas and gas liquids technology progresses further.

“The implications – and this is what we hear from operators who are also looking at this – are the benefits abroad,” Walker, a 30-year industry veteran, told Energy News.

“If we can identify the sweet spot areas of the natural gas liquid, which is where the operators take more value, then we can reduce the number of wells they drill, where they position the horizontal.

“The frac technology doesn’t open up all of the reservoir, so if we can identify where it has and where it hasn’t, and identify those sweet spots, then we can reduce frac costs and therefore make the whole thing more economic.

“And by reducing the number of wells we reduce the footprint on the environment, we can frac in specific places so we don’t need as much tankage, as much water.

“We’re now in the phase to demonstrate that we can do this.

“We already have this technology available in Queensland, operating in the CSG market for several years, so we have a service infrastructure here that can deliver the capability.”

He said the heterogeneity and variability of shales were significant because of their depositional history – so spending $20 million on shale wells, as majors are doing in the Canning Basin – “that’s a large investment in something that maybe doesn’t have enough science behind it”

“So this tool will measure the hydrocarbon, rather than an inference of where the hydrocarbon is.

“At the moment the application is the gas and the liquid gas, in the alpha trial, to differentiate between the two and even find where the gas is and where there are some shales in the US where they struggle to get the gas, with massive formations. Where do they put the horizontal section if they’re 150m thick?

“Really, they want the liquid gas, so applications into oil would be the next stage after this … but one step at a time as we start doing this. It takes the guess work out.”