This study evaluates the impact of technology on potential tight gas reserves in the context of current pipeline capacity and project economics. This case study of the Dakota formation is part of a larger analysis of tight sand formations in the San Juan basin, the findings of which are available in a separate report.1 

This paper reports the result of a disaggregated appraisal of the remaining Dakota tight gas resource and estimates of gas in place, technical recovery and potential reserves. A location-specific resource database was constructed and typical well recoveries were modeled on a township-specific basis. Project costing and cash flow economics were analyzed to derive potential reserves for various technology specifications and wellhead prices. These data provide a foundation for operators and pipelines to more closely examine the Dakota for development in the near future.

Gas in place for the undeveloped tight portion of the Dakota was estimated at 11.1 Tcf. Potential recoverability with current technology is 4.3 Tcf. Potential reserve additions are 0.6 Tcf at $2.00/Mcf, 1.9 Tcf at $3.00/Mcf, and 3.2 Tcf at $5.00/Mcf. The availability of the Alternative Fuels Tax Credit for certain Dakota wells drilled in the next two years another two years could improve project economics by an equivalent of as much as <body_st>.88/Mcf at the wellhead.

As part of this study, depth, overburden and isopach maps were prepared and a resource database constructed. The database was analyzed using an integrated recovery and economics model for tight sands that has the capability to do rapid sensitivity analysis of geological, technology and economic assumptions. Although this study has identified the tight sands potential for various areas of the basin, more detailed geologic appraisal and reservoir engineering should be conducted before drilling.

You can access this article if you purchase or spend a download.