Unconventional” natural gas plays are no longer unconventional. The exploitation of gas resource plays in North America has developed to the extent that 50% of U.S. gas production comes from coalbed gas, tight-sands gas, and shale gas. Of these, shale gas is the fastest-growing.

In the five-year period from 2004 to 2008, U.S. shale-gas production almost tripled, from 1.88 billion cubic feet per day to 5.52 billion daily. In 2008, U.S. shale-gas production exceeded coalbed gas production for the first time. Over the same five years, fractured shale oil production from the Bakken formation in Montana, North Dakota, and Saskatchewan rose from 23,600 to 153,000 barrels per day.

What lies behind this dramatic growth in gas and oil production from shale resource plays? In part, it reflects declining production from traditional reservoirs and a desire to increase national energy security by producing from indigenous sources. The principal drivers, however, are technological advances in drilling and completion. With little exploration risk, the development of resource plays has become much like a manufacturing process. And now, the shale-gas frenzy has spread to Europe.

Shale gas in Europe

Europe is particularly well suited to gas resource-play exploitation. It offers a large market, established pipeline infrastructure, increasing demand, and widespread sentiment that current dependence on gas imports should be reduced. Relatively high natural gas prices add to the attraction.

Shale-gas exploration in Europe is in its infancy. The first exploratory well was spudded in Germany in 2008, and shale-gas drilling began in Sweden this past November. As a consequence, little is known about Europe’s ultimate potential.

In 1997, Hans-Holger Rogner, head of the Planning and Economic Studies Section of the International Atomic Energy Agency, estimated the in-place resource of Europe (including Turkey) at 550 trillion cubic feet (Tcf). He extrapolated from estimated U.S. resources of gas per ton of shale and applied this to the worldwide distribution of oil shale, admitting in an article in the “Annual Review of Energy and the Environment” that this approach was “quite speculative.”

More recent studies indicate significantly larger in-place resources. OMV has suggested a potential recoverable shale-gas resource of 15 Tcf in Austria’s Vienna Basin, from an in-place resource of 200 to 300 Tcf. The Netherlands Organization for Applied Scientific Research (TNO) reports its best estimate for producible gas in place in high-potential areas of the Netherlands is 198 Tcf from an estimated in-place resource of 3,950 Tcf.

Given the potential size of the in-place resource, it is not surprising that investigations are under way in at least 10 countries. Companies interested in shale-gas potential range from super-majors such as ExxonMobil and Shell to major independents, to small niche players and coalbed gas explorers that may have some shale-gas potential on their acreage.

European Shales

Major shale-gas plays

Europe hosts three potentially major regional shale-gas plays, plus a number of others with local potential.

The oldest is a Lower Paleozoic play in northwest Europe that runs from eastern Denmark through southern Sweden to north and east Poland. The organic-rich shales with shale-gas potential lie on the southwestern margin of the Baltica palaeocontinent and thicken in toward the bounding Trans-European Suture Zone.

In Denmark and Sweden, the principal target is the kerogenous Alum shale of Middle Cambrian to Early Ordovician (Tremadoc) age. No drilling has taken place in the Fennoscandian Border Zone and Norwegian-Danish Basin in Denmark, but this past November, Shell spudded the Lövestad A3-1, the first in a three-well test program, in the Colonussänkan permit (Fennoscandian Border Zone). The well has a planned total depth of about 3,300 feet.

Further southeast, in Poland, the main Lower Paleozoic target is Silurian-age graptolitic shale, with the Upper Ordovician a secondary target. The Silurian in particular thickens towards the southwest in the area of the Gdansk Depression (Baltic Depression) and the Danish-Polish Marginal Trough, which defines the southwest margin of the Baltic Depression. In parts of the trough, such as the Warsaw Trough and Lublin Trough, more than 10,000 feet of Silurian section may be present.

To date, this play has been the most sought-after in Europe. Some 15 concessions have been awarded in the Gdansk Depression, seven in the Danish-Polish Marginal Trough, and seven on the East European Platform Margin northeast of the Marginal Trough.

A number of small niche players are active in the Gdansk Depression, but of the 14 concessions on the Platform Margin and Marginal Trough, 12 are held by ExxonMobil, Chevron, or Marathon.

The first test of the Polish Lower Paleozoic was scheduled for this month, when Lane Energy (a subsidiary of 3Legs Resources Plc) planned to spud a well, probably in the Lebork concession (Gdansk Depression). Lane’s initial seismic and drilling program on its six Gdansk Depression concessions is being funded by ConocoPhillips, giving the latter the option to earn up to a 70% interest in the concessions.

The second major play is a Carboniferous basinal marine shale play entending from the Cheshire Basin in northwest England across the Anglo-Dutch Basin and Northwest German Basin to the Fore-Sudetic Monocline (Northeast German-Polish Basin) in southwest Poland. The age of the most prospective shales appears to lessen moving westwards from the Visean (Middle Mississippian) Kulm facies of southwest Poland and northeast Germany to the Namurian (Upper Mississippian to Lower Pennsylvanian) area of northwest Germany, the Epen formation of the Netherlands, and the Bowland shale in northwest England.

Lane Energy has interests in southwest Poland, but unlike the Gdansk area, its activity there is not funded by ConocoPhillips. In Germany, the nature of E&P reporting is such that it can be difficult to determine activity taking place on long-held licenses. It is assumed that ExxonMobil, both directly and indirectly through the BEB ExxonMobil/Shell joint venture, will be examining the potential of Visean shale in eastern Germany and Namurian shale in the west.

In the Netherlands, Cuadrilla Resources Ltd. was recently awarded a license on the margin of the London-Brabant High and West Netherlands Sub-basin of the Anglo-Dutch Basin. The Epen formation shale (Namurian) is likely the primary target. Through its Bowland Resources subsidiary, Cuadrilla also has interests in the Cheshire Basin in northwest England. The company planned to spud in March of this year its Preese Hall 1 to test Namurian-age Bowland shale. The depth to top shale is estimated at 4,300 feet with a gross estimated shale thickness of some 4,000 feet. This well is the first known test of the Carboniferous shale-gas play in Europe.

The final major regional play comprises Liassic (Lower Jurassic) bituminous shales being targeted in the Weald Basin (southern England), the Paris Basin, the Netherlands, northern Germany and Switzerland’s Molasse Basin. In continental Europe, the principal target is the Lower Toarcian Posidonia shale. In eastern Germany and Poland, however, the Lower Toarcian grades into a terrestrial facies and loses its source potential. In southern England, the principal bituminous shales are older and occur in the Lower Lias.

These bituminous shales are clearly oil-prone. Therefore, the principal limitation regarding their shale-gas potential lies in finding locations in which they have been sufficiently deeply buried to have entered the gas window. Locations where this may have occurred include the flexural foreland basin of the Swiss Molasse, the Mesozoic depocenters of the Lower Saxony Sub-basin (Northwest German Basin), and the offshore Broad Fourteens Basin and Central Graben of the Netherlands. Whether the Liassic shales will be within the gas window in the Weald and Paris basins remains to be seen.
A number of companies are thought to be investigating Lower Jurassic shale-gas potential. These include EurEnergy Resources Corp. in the Weald and Paris basins, Cuadrilla Resources/A.J. Lucas in the Weald Basin, and Schuepbach Energy LLC in Switzerland’s Molasse Basin. In Germany, ExxonMobil began shale-gas exploratory drilling in 2008 in the Lower Saxony Basin, drilling Damme 2/2A and 3 in the Munsterland concession and Oppenwehe 1 in Minden. Niedernwöhren 1 was spudded in the Schaumburg permit in mid-October 2009. At least one of these wells is presumed to have targeted the Posidonia shale.

And finally, a “play” that probably isn’t: Secondary sources and press reports have suggested that the unconventional gas prospects being investigated in Hungary’s Makó Trough by Falcon Oil & Gas Ltd./ExxonMobil/MOL Group are a shale-gas play. The companies themselves, however, have not reported a shale-gas play, referring only to tight-gas sand or basin-centered gas prospects. Furthermore, it seems unlikely that the young Neogene shales of the trough will have achieved the requisite degree of brittleness to support a fractured shale-gas play.

As for fractured shale-oil potential, Toreador Resources is investigating in the Paris Basin the fractured shale-oil potential of a Liassic (Lower Jurassic) analog to the Williston Basin’s Bakken formation. The Liassic section is similar to the Bakken in that the bituminous shales also contain a middle calcareous member (Banc de Roc). Shows have previously been detected in 11 conventional exploration wells drilled from the 1950s onwards, and six wells have produced oil on test. The company hopes to commence a three-well pilot exploration program in third-quarter 2010.

Ken Chew, Ph.D, is a geologist with IHS Inc. Previously he was with Petroconsultants. He has presented papers and published on many aspects of worldwide hydrocarbon E&P, E&P databases, database standards and information management.