The Rising Influence of Rising Affluence

[flatlander_60048]

Be careful of any reserve estimates made for shale formations. Downhole geophysics (think Schlumberger) usually plays a big role in the characterization of formations which allows the reserves (oil or gas)to be estimated. Porosity logs are based on clean formations (i.e., limestone and sandstone with little if any clay or shale). Geophysical logs (neutron, gamma density, sonic etc.) are not suited for characterization of shale formations.

Therefore the estimates are based on initial production or whatever estimates of porosity that can be made from core samples etc. The problem is that it can be difficult to collect good shale core samples for characterization. The rock tends to expand when the overburden rock pressures are removed. This can inflate the estimate of porosity. The best way of estimating the effective porosity is by examining the well hydraulics. This may be prompting some of the reserve revisions that the NYT is referring to.

These are some of the reasons I'm skeptical of some of the shale gas reserve estimates.

FL