23rd World Gas Conference, Amsterdam 2006

HORIZONTAL WELL
PERFORMANCE
IN THE MICHIGAN SIX LAKES
STORAGE FIELD
Edward Dereniewski
Michigan Consolidated Gas
A DTE Energy Company

June 2006

MichCon Peak Day Planned

Supply Profile
19%

Storage
Supplies

81%

Field Capacity - Bcf

Volume - BCF
90
80
70
60
50
40
30
20
10
0
Washington Belle River
10
Mills

Base Gas

Six Lakes

West
Columbus

Columbus Washington
28

Working Gas

Michigan
Facilities
Legend
El Paso

West Columbus

Great Lakes

Columbus

MichCon Lines
Belle River Mills
MichCon
Storage Fields

Six Lakes

Washington 10
Washington 28

Six Lakes Gas Storage Field

Storage Date
Minimum WHP
Maximum WHP
Field Capacity
Working Gas
Peak Delivery
Active I/W Wells
Horsepower

1953
200 psig
705 psig
68.6 Bcf
40.0 Bcf
700 MMcf/d
134
40,000

Well Flow Performance vs. Time

Six Lakes Vertical Wells
Well Flow Performance vs. Time
Six Lakes Field Wells
10,000

Flow rate - m cf/d

SL 6 Data
SL 6 Decline = 4.9%
SL 23 Data
1,000

SL 23 Decline = 17.7%
SL 183 Data
SL 183 Decline = 2.7%

100
Jan-64

Jan-66

Jan-68

Jan-70 Dec-71 Dec-73 Dec-75 Dec-77 Dec-79 Dec-81 Dec-83 Dec-85

Six Lakes Flowrate History

P re -1 9 8 0 V e rtic a l W e ll P e rfo rm a n c e
P o s t-1 9 8 0 V e rtic a l W ell P e rfo rm a n c e
5 .6 % p e r Y e a r D e c lin e
Flowrate - mmcf/d at 300 psig Field pressure
and 70 psi drawdown

1 ,0 0 0
900
800
700
600
500
400
300

200

100

1965

1970

1975

1980

1 9 85

1990

1995

2000

2005

Results Of Fresh Water Coiled

Tubing Wash

Before Wash

After Wash

New Technology Lowers Costs;

Reduces Risks

Former Design
Facility Well Count 281

Future Design
Facility Well Count

50

Miles of Pipelines

15

Miles of Road

Free Gas User

Miles of Pipelines

41

Miles of Road

53

Free Gas Users

93

Wells Scattered Across Two Counties

Typical Pad Location View

Field Flow Performance vs. Time

Six Lakes Vertical Wells
1 ,0 0 0
900
800
700
600

and 70 psi Drawdown

Flowrate - MMcf/d at 300 psig Field Pressure

P re -1 9 8 0 V e rtic a l W e ll P e rfo rm a n c e
P o s t-1 9 8 0 V e rtic a l W e ll P e rfo rm a n c e
5 .6 % p e r Y e a r D e c lin e
P o s t-1 9 9 2 S tim u la tio n s a n d H o riz o n ta l W e lls

500
400
300

200

100

1965

1970

1975

1980

1985

1990

1995

2000

2005

Vertical or Horizontal Wells?

Vertical vs. Horizontal Well Theoretical Performance

Delta P Squared

1,000,000

Vertical 40' pay, skin = 0

Vertical 40' pay, skin = 10

Horizontal 5,000', skin = 0

Horizontal 5,000', skin = 10

100,000

10,000

1,000
0.100

1.000

10.000

Flowrate - MMcfd

100.000

1000.000

Length of Horizontal Wells

5,000 foot vs. 2,500 foot Horizontal Well Theoretical Performance
44% Deliverability Increase

Horizontal 5,000', skin = 0

Horizontal 2,500', skin = 0

Delta P Squared

1,000,000

100,000

10,000

1,000

0.100

1.000

10.000
Flowrate - MMcfd

100.000

1000.000

22,000

440

20,000

400

18,000

360

16,000

320

14,000

280

12,000

240

10,000

200

8,000

160

6,000

120

4,000

80

2,000

40

0
One Lateral
Flowrate

Two Lateral
Flowrate

One Lateral
Drainage Area

Two Lateral
Drainage Area

Drainage - acres

Flowrate - mcf/d

Well #429 Second Leg Results

Stimulation Results
Percent Deliverability Change

200%
180%
160%
140%
120%
100%
80%
60%
40%
20%
0%
434 Skin
Removal

435 Effective
Length
Increase

436 Skin
Removal

442 Effective
Length
Increase

444 Effective
Length
Increase

Openhole Footage

Openhole Footage - feet

100,000
90,000

Horizontal Wells

80,000

Vertical Wells

70,000
60,000
50,000
40,000
30,000
20,000
10,000
0
1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

Acres/1000 Effective Feet

180

160

140

120

100

80

60

40

20

(1

2
45
1
45
0
45
9
44
8
44
7
44
6
44
5
44
4
44
3
44
2
44
1
44
0
44
8
43
7
43
6
43
5
43
4
43
3
43
2
43
1
43
)
0
gs
43 Le
(2 )
g
Le
9
42

9
42
7
42

Drainage Area per 1,000 Effective Feet - acres

Acres Drained

Effective Wellbore Length

Through the 2004-05 Withdrawal Season

Percent of Drilled Openhole Utilized

100%
90%
80%
70%
60%
50%
40%
30%
20%
10%

No Wells
Drilled

No
Wells
Drilled

No
Wells
Drilled

1998

1997

0%
2004

2003

2002

2001

2000

1999

1996

1995

1994

Field Flow Performance vs. Time

Six Lakes Vertical Wells
1 ,0 0 0
900
800
700
600

and 70 psi Drawdown

Flowrate - MMcf/d at 300 psig Field Pressure

P re -1 9 8 0 V e rtic a l W e ll P e rfo rm a n c e
P o s t-1 9 8 0 V e rtic a l W e ll P e rfo rm a n c e
5 .6 % p e r Y e a r D e c lin e
P o s t-1 9 9 2 S tim u la tio n s a n d H o riz o n ta l W e lls

500
400
300

200

100

1965

1970

1975

1980

1985

1990

1995

2000

2005

Compressor Building Built in 195353 Years Old

Extra or Unused Slides

Safety and Security

Fewer Wells
Fewer Pipelines
Fewer Roads
Free Gas User Liability
Wells Grouped on Pads
Horizontal Wells on MichCon Land

Well Near Home and Crops

Well Near Home and Highway

Wells on Wellpad on MichCon Land

Meter Runs and Launcher and Receiver

Meter Runs with Ultrasonic

Measurement

Six Lakes Storage Field

MichCon DTE Energy Gas

Importance of Six Lakes
Geology
Deliverability Loss
Historical Improvement Initiatives
Horizontal Drilling Program
Current Performance
Conclusions

Six Lakes Storage Field

Mecosta and Montcalm Counties

N
Fee Acreage

Six Lakes Storage Field

2003

Six Lakes Storage Field

Mecosta and Montcalm Counties

Existing Wells
2003 Planned
Wells
Future Wells

Six Lakes Storage Field

Mecosta and Montcalm Counties

N
Fee Acreage
Completed Segments

Michigan
Basin
Geology

Bedrock
Aquifers
Bedrock
Aquifers
Saginaw
Formation
Saginaw
Formation
Marshall
Formation
Marshall
Formation
Silurian-Devonian rocks

Silurian-Devonian rocks

Cambrian-Ordovician rocks

Cambrian-Ordovician rocks

Precambrian Sandstone

Precambrian Sandstone

Six Lakes

A
A

A --------A Trace
ofSection
cross section
Trace
Cross
A
0

Lake Michigan
Lake Michigan

SeaSea
LevelLevel
-4,000
ft.
-4,000
ft.
-8,000
ft. Igneous and
-8,000
ft.
-12,000
ft.
-12,000
ft
.

Lake Superior

Lake Superior

Igneous and
Metamorphic
Rock
Metamorphic
rock

100 Miles
50 50 100 Miles

AA

Lake Erie
Lake Erie

Six Lakes Horizontal Well Profile

Michigan Geology
0 Feet

Pleistocene

Glacial Drift
Parma Sandstone

Pennsylvanian-Mississippian

Stray B Sandstone
Antrim Shale
Traverse Limestone
Dundee Limestone
Detroit River Group

Devonian

Silurian

Salina A-1 Carbonate

Clinton

Niagaran Reef

Trenton-Black River
Glenwood
Prairie du Chien
Foster

Ordovician
Cambrian

14,000+ Feet

Salt

Gas

Oil

Six Lakes
Depositional
Environment

Offshore
Sand Bars

Field Capacity - Bcf

Field
Belle River Mills
Columbus
West Columbus
Six Lakes
Washington 28
Washington 10
Total
.

Base Working Total

29.2
46.9
76.1
4.6
15.0
19.6
3.4
22.5
25.9
28.6
40.0
68.6
1.9
9.7
11.6
8.5
42.5
51.0
76.2
176.6 252.8

January Peak Day

Deliverability -- MMcf/d
Field
Belle River Mills
Columbus
West Columbus
Six Lakes
Washington 28
Washington 10
Total
.

Rate
1,350
170
610
280
50
240
2,700

MichCon DTE Energy Gas

1.2 Million Customers
4.8 Bcf Peak Day System Demand
170 Bcf Direct Sales
40 Bcf Customer Choice Transportation
160 Bcf End-User Transportation
470 Bcf System Transportation
840 Bcf Annual Throughput

Facilities
177 Bcf of Underground Storage
18,900 Miles of Natural Gas Pipelines

5- 42
42 7
9H HD
D -1
-1
43 & 2
0H
43 D-1
1
6- HD
43 2H 1
43 D-1
3
7- HD
7- 434 -1
43 H
5H DD 1
7- -1
&
7- 436 2
43 H
7 D
8- HD -1
44 -1
0H &
D 2
8- -1
&
8- 441 2
44 H
12 2H D-1
-4 D43 1
H &2
12 D-4 1&
6- 44 2
44 H
5 D
5- HD -1
44 6 1&
5- HD 2
44 -1
7H &
D 2
-1
&
2

Feet of Openhole

Six Lakes Gas Storage Field

Horizontal Wells Lengths vs. Costs

6,000

5,000
$600

Drilled Openhole
Cost

0
$500

4,000
$400

3,000
$300

2,000
$200

1,000
$100

$0

Six Lakes Gas Storage Field

Production
Discovery Date
Rock Type
Areal Extent
Discovery WHP
Original Production
Gas Wells
Abandonment WHP

1934
Sandstone
12,000 acres
513 psig
51.6 BCF
224
25 psig

Daily Flowrate - MMcfd

1,600

January Peak Day

Deliverability - MMcfd

1,400
1,200
1,000
800
600
400
200
0
Belle River
Mills

West
Columbus

Six Lakes

Washington
10

Columbus

Washington
28

Historical Peak Day Sendout

Storage

Supply
81%

63%
37%

65%
35%

70%

30%
19%

1970s

1980s

1990s

Current

Coiled
Tubing
Unit
COILED TUBING UNIT

SL #301
1278 ft
Undisturbed
kaolinite
platelets
No evidence
of fines
migration
after 40+
years of
storage
operations

SL #419
1288 ft.

Salt Scale

Rotary
sidewall
core.
A 1/4 thick
salt
deposit
covers the
sandface.

Sandface
Reservoir Rock

SL #419
1294 ft.
6 1/4
openhole
completion
Salt
deposits are
totally
covering the
sandface

SL #328
1246.1 FT
Openhole
completion
after a fresh
water coiled
tubing wash
and
9 spf
perforations

Openhole Perforations

SL 423 After
1300.1 to 1301.7 feet

Propellant
Exploded
Perforations
Fractures

Six Lakes #423

3.0%

% Flowrate

Linear (% Flowrate)

2.5%

%Flowrate

2.0%

1.5%

1.0%

0.5%

Post Frac Results

0.0%

9/19/91

1/31/93

6/15/94

10/28/95

3/11/97

7/24/98

12/6/99