Shale Dreams in Hungary
No unconventional hits yet in Hungary
Speaking before an audience at the Global Unconventional and Shale Gas Plays Forum in Vienna, Austria, Chairman of the Board of Directors at Falcon Oil & Gas Ltd., Dr. Gyorgy Szabo showed a graph of Falcon’s wells in Hungary, all of which were vertical.
“It’s a dream - forget it. Horizontal extension and multistage are needed as soon as possible.”
“Falcon tried to adopt the Green River tight sand system to Europe,” he explained. “We hired the same guys that successfully introduced frack technology and had only minor production. It is clear that Barnett cannot be compared to Marcellus or Haynesville - shales are just as diverse as children,” he said.
Szabo continued, “We decided to compare our Hungarian shale to the US system and I think it can be similar to Haynesville, but I think there are some important factors to have: mineralogy, source richness, burial/uplift history, pressure history – these are important for a properly engineered frack.”
“I would like to produce unconventional gas,” he said, noting that it was recovery that could be the huge question mark when focusing on unconventionals, tight gas and shale gas.
Szabo stated that in south-eastern Hungary, there were candidates for unconventional gas production.
“We are unfortunately at the beginning,” he explained. “There are roughly 12 completed wells and with that unconventional gas system draining. Those wells are for unconventional. Compare these 12 to the 24,000 in the US.”
When asked about the future of the Hungary’s Mako Basin, where last year ExxonMobil exited its agreement with Falcon Energy and MOL Hungarian Oil and Gas Plc to perform exploratory drilling for unconventional gas, Szabo replied:
“We’re paying royalty on the basis of flare gas, but don’t understand the mechanism. We had an unsuccessful joint venture two years ago. The lesson is, there are vertical wells, but we have to continue the testing and the application of the examples given.”
He continued, “You don’t need US 100 million, just a step-by-step process to understand this system. And focus on the subsurface mechanisms. I’m optimistic that together with MOL a good plan for a frack job will be key.”
Szabo emphasized the importance of microseismic, saying Falcon had tried to use it three years ago.
He asked how it was possible to successfully produce shale gas in Europe if more than 5,000 wells were needed, contending, “It can be exported but we have to be prepared for that.”
“We do not understand them,” he said of the subsurface issues. “That’s a prime issue for transplanting the US success story to another continent.”
Szabo noted the changes in resource potential from 2001-2010.
“North America successfully increased it, while Europe is at the same level. Never forget that these are only estimates. How can we drain those systems? What about the recovery?” he asked.
He congratulated Talisman for having introduced a new success story in the Utica shale in Quebec.
“The producing wells there in the States have been on the increase dramatically,” noted Szabo, “but please, let’s have an idea about the data that those efforts produced, because for unconventional the data analysis is the tool in our hands to justify the technology.”
He mentioned brand new fracture diagnostics like a temperature distribution test, which he said was an excellent diagnostic tool. “You can save hundreds of wells with these.”
In terms of the drilling footprint, he said: “Europe won’t be able to complete numerous unconventional wells because of population density. But multi-fracturing may be possible on the basis of communication with landowners and municipalities.”
In terms of surface land ownership issues, Falcon’s Szabo said he believed individuals were interested in leasing their land and that there were tax advantages for them. For water quandaries, he contended it was necessary to work together carefully with authorities, that it could be done. “We used water and frack fluid and could successfully solve that.”