Stealth Ventures Ltd

Technology

Shale Gas in Western Canada

Stealth has targeted the shale gas potential of the Cretaceous Colorado shales by pursuing a strategy of permeability optimization. Using detailed structural and stratigraphic models based on numerous cores and other testing, innovative and recently developed stimulation equipment designed by industry leaders has enabled optimization of these tight water-sensitive formations.

Cretaceous Colarado Shale Gas plays.

Grand Canyon technology.

Canyon

The Cretaceous Colorado group in the WCSB is represented almost continuously in a 1000km east-west profile. Of the over 250,000 well bores that penetrate the Colorado group, most have been drilled to target deeper horizons. While mud logs typically give good indications of gas potential in many Colorado group formations, response to conventional completions & stimulation practices have been inconsistent at best. Typical of “unconventional” reservoirs, the Colorado group exhibits high organic content shales, and high clay content sands. Combined with low reservoir pressure, and tight formation matrix permeability, the Colorado group exhibits high sensitivity to water, and this has been the Achilles’ heel in making the play economic.

The development of a unique fracture stimulation process now allows reservoirs of this nature to be effectively stimulated with proppant using 100% Nitrogen gas as the fracturing fluid. This process utilizes a proprietary proppant injected into the nitrogen stream with no potentially damaging carrier fluid or chemicals required. The combination of the 100% inert fracturing fluid, the physical properties of the proppant, allow the proppant to be placed as a partial monolayer while still providing enough strength & resistance to embedment to sufficiently prop the fracture network to retain high fracture conductivity.

Understanding is the key

Stealth maintains the same successful philosophy that has brought it to this point by continuing to push research and development to better optimize the operations at Wildmere. The Company plans to utilize a key piece of diagnostic equipment for understanding of the fracturing process, provided by Pinnacle Technologies.

Pinnacle Technologies is an energy industry engineering service, consulting and software firm specializing in the optimization of hydraulic fracturing. Pinnacle provides a unique combination of fracture and reservoir consulting services, award-winning fracture diagnostic and reservoir monitoring technologies along with the industry's leading fracture stimulation software, all recognized worldwide for enhancing production economics.

Pinnacle’s fracture monitoring array.

Pushing the boundaries

Stealth continues to look for bigger more effective ways to fracture stimulate the Colorado Group shales and as part of this R&D effort will try a pilot program using new propane fracturing technology. GASFRAC Energy Services Inc’s. proprietary LPG (Liquefied Petroleum Gas) Fracturing Process utilizes gelled LPG in place of conventional fracturing fluids. The unique properties of the LPG fracturing process result in significant savings on material expenses and fracture clean up, as well as increased well productivity.

The gelled LPG used in the fracturing process has the ability to both generate the necessary fracture system, carry the proppant through the wellbore and place into the oil and gas reservoir being stimulated.

The LPG used in the process is highly soluble in formation hydrocarbons. As a result, the LPG process results in less damage to formations than conventional hydraulic fracturing. And unlike conventional treatments where as much as 50% of the carrier remains in the reservoir and hinders well performance, virtually 100% of the LPG can be recovered.

Gasfrac’s LPG fracing technique.

Adapting to Change

A key component to the success of the Cretaceous Colorado Shale being a successful resource play is the ability to manage costs. As the global price for steel continues to climb inflationary pressures have mounted on the oilfield seeing the price of finished steel products (such as line-pipe and casing) more than double and in some cases not be available at all. Adapting to change, Stealth Ventures Ltd. has finished a pilot program implementing a composite pipe for construction of pipeline systems in the Wildmere area. The product which is just as durable as steel, installed quicker and less expensive.

Flexpipe Systems, a division of ShawCor Inc. is a Calgary based company that manufactures and sells a unique non-metallic, pipeline system marketed to oil and natural gas producers in Canada and the United States.

Flexpipe linepipe is manufactured using a patented combination of high density polyethylene and wound glass fibers, which results in a durable, corrosion-less, spoolable system with operating pressures up to 1500 psi (10,342 kPa). Applications include small diameter, oil & gas gathering, water disposal and injection pipelines, gas transmission pipelines and other applications where a corrosion resistant, high pressure pipeline is required.

Flexpipe’s flexible, spoolable design allows for faster installation with less equipment, man-power and logistics, consistently saving customers 30% to 50% on installation costs and with minimal environmental disruption.

Flexpipe has quickly established itself as a leading player in the spoolable composite pipe market having served over 200 customers in Canada and the United States. Flexpipe is focused on further expanding its product line and providing pipeline solutions to the global market.

Unspooling - Flexpipe on a Spool Trailer

UCG Technology

UCG is an industrial technique which enables un-mined coal to be converted in-situ into product gas "syngas" which is bought to the surface via a separate production well. The conversion of the coal to syngas is achieved through a controlled underground gasification process initiated by the injection and ignition of oxidants into the coal seam. The coal seam is ignited and gasified, generating carbon dioxide (CO2), hydrogen (H2), carbon monoxide (CO) and small quantities of methane (CH4) and hydrogen sulphide (H2S) at high pressure. As the coal face burns the immediate area becomes depleted, the oxidants injected are controlled by the operator with the objective of guiding the burn along the coal seam. The controlled nature of the burn allows complete seams of coal to be gasified.

The traditional UCG technology allows the exploitation of coal seams by vertical boreholes, which necessitates creating a physical connection by drilling a connecting borehole or fracturing the coal. Vertical drilling usually means boreholes are close together, so that accessing deeper seams is expensive. The more advanced Controlled Retraction Injection Point System "CRIP", a moveable injection point system adapted and developed from existing oil and gas drilling technologies. It is more flexible allowing the creation of inseam boreholes which allow the exploitation horizontally of seams. This allows deeper coal seams – to at least 1000m – to be exploited and reduces the number of injection boreholes required to exploit a coal seam and thus significantly reduces the costs and timeline for exploitation of the coal seam.

A complete UCG installation will include multiple injection and production bore holes together with a surface mounted gas separation plant and CO2 separation unit. These are linked to a power generation plant either a) directly on site as shown in the diagram below, or b) through an existing / specifically built pipeline network, to transport the syngas to a remote power generation plant or to a gas to liquids plant for onward transportation.

CRIP Technology

With the recent improvements in drilling, modern UCG is now principally based on directional drilling that allows a better control of the well configuration and the gas quality. From the first UCG trials that used the Linked Vertical Well (LVW) technique, there was strong evidence that maintaining the injection point at a low position in the coal seam is essential for obtaining good gas quality and high resource recovery. The tendency to develop the gasifier towards the top of the coal seam (by gravity effect) was characterized as "the overriding effect". Maintaining a low injection point is very difficult with a vertical injection well, and the desire to establish this more constant burn geometry and to control a seam-bottom injection led to the concept of Controlled Retracting Injection Point (CRIP).

CCL's UCG technology it will use is primarily based on the CRIP module concept that uses a deviated in-seam well for the gasifying agents' injection and a vertical well for the recovery of the produced syngas. Each module composed of one pair of wells can be controlled independently.

It is usual to use oxygen as the primary accelerant – it is possible to use air, which is cheaper, but the resultant syngas is of a lower quality. Although there may be occasions when the use of air makes sense, it is anticipated that oxygen firing will normally be CCL's process of choice.

Schematic representation of the CRIP module concept

This CRIP module concept is the starting point of the process calculation. For each two-well module, the module is defined as the volume of coal confined within a parallelipedic volume having dimensions equal to the coal seam thickness, the in-seam length and the inter-module distance. In a commercial-scale UCG operation using these two-well CRIP modules, continuous operations are achieved by relaying different gasification modules in parallel. The figure below represents the well field and module layout of modules run in parallel.

Layout of modules run in parallel

Each module will be controlled basically by four parameters: (1) the rate of oxygen /air injected, (2) the water/oxygen ratio, (3) the reactor counter-pressure and (4) the position of the injection point in the in-seam section of the deviated injection well.

1. The rate of oxygen injected. The oxygen rate is controlling principally the gasification rate and the power developed underground. Experiences of previous UCG trials indicate that approx. 1.5 to 2 MW are developed underground for 100 m3 (STP) of oxygen injected per hour (or 143 kg/h) and approx. 2 to 3 kg of coal are gasified per kg of oxygen injected.
2. The water/oxygen ratio. By controlling the water/oxygen ratio, the gasification efficiency can be optimized. In practice, the action from surface on this parameter is limited due to the fact that an important part of water may come from the underground system. Depending on the importance of the underground water influx and the coal moisture, the variation of the water injected from surface will more or less control the gasification efficiency. Experience has shown that the optimum is ranging from 2 to 3 (ratio of the total water reacting underground to the oxygen injected).
3. The reactor counter-pressure. The control of the reactor counter-pressure is very important in UCG. The reason is that the underground reactor is opened to the underground system. The pressure of the underground reactor will control indirectly (i) the free water influx coming from the underground system and (ii) the gas losses to the underground system. To minimize contamination to the underground system, the counter-pressure of the underground reactor will be controlled significantly less than the average water pressure existing in the underground system (surrounding strata of the underground reactor), creating all the time a positive pressure gradient towards each gasifying module. The counter-pressure of the underground reactor is controlled from the production wellhead.
4. The position of the injection point. During underground reactor growth, efficiency of gasification will decrease in function of two main factors:
   • The increased distance from injection point to gasification zones (coal faces).
   • The increased contact surface between underground reactor and surrounding strata (increase of heat losses and free water influx).
   To optimize efficiency, CRIP manoeuvres will be realized along the in-seam section of the deviated injection well.