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Wyoming's Oil & Gas Resources


Wyoming’s geologic past included a fortuitous overlap of biology, geology, and geography that resulted in large hydrocarbon resources. Wyoming was repeatedly covered in shallow seaways, especially during the Permian Period (~278–253 million years ago) and later during the Cretaceous Period (~124–65 million years ago). Large amounts of biological material (microscopic plants and animals) accumulated in these seaways. Subsequent burial, with increased pressures and temperatures, allowed the organic material to mature into hydrocarbons. The hydrocarbons migrated in the subsurface through fractures and porous sandstones and were ultimately trapped underground throughout Wyoming’s basins.

An important role of the Wyoming State Geological Survey is to investigate the Earth’s geologic record to provide responsible energy development in the future. WSGS geologists work to identify oil and gas fields in the state’s basins, document and characterize the producing formations, and provide a wide array of audiences with current and relevant information on Wyoming’s oil and gas resources.





Schematic diagram depicting oil and gas generationHow are oil & gas formed?

Crude oil and natural gas are formed when large amounts of algae and zooplankton settle to the bottom of a sea. This biological material is then incorporated into the mud, and subsequently buried by thick layers of sediment. The weight of the overlying sediment increases the temperature and pressure of the organic-rich mud. If these temperatures and pressures are sustained for long periods of time (~10 million years), the organic material is converted into kerogen and bitumen. As temperatures continue to increase, the kerogen undergoes a process called catagenesis (also called “thermal cracking”) in which it is converted into crude oil. The temperatures that are ideal for crude oil formation are called the “oil window,” and are approximately between 150° and 300°F (65° and 150°C). Natural gas begins to form at temperatures higher than approximately 300°F (150°C). Click to enlarge image at right.






Oil & Gas Explorationschematic diagram of 2D seismic data collection

 

Exploration geologists and engineers use a variety of techniques to determine where oil and natural gas are located underground. Data from nearby wells, regional geology, computer models, satellite imagery, and mapped surface oil seeps are some of the tools that can help predict where a productive oil well might be located.

Geophysical (seismic) surveying is one of the best methods of finding oil and gas, because it enables geologists to map underground formations and structures. A noise source – typically either a vibrating/thumping truck or an explosive discharge – directs sound waves through the subsurface. The waves reflect off the different rock layers and structures. Geophones record the time it takes for the waves to return to the surface. The raw seismic data are then processed and interpreted to determine the possibility of oil and/or gas. Three-dimensional (3D) seismic surveys allow geologists to make even more accurate interpretations and predictions of oil and gas deposits.

Ultimately, drilling test wells confirms whether oil and/or gas exists in a suspected area or formation. While some test wells lead to the successful discovery of hydrocarbons, others turn out to be “dry holes.” On occasion, test wells help locate hydrocarbons in rock layers other than the original target formation.






Oil & Gas Traps

common oil & gas trapsThe high pressures under which hydrocarbons are formed also force or “squeeze” oil and gas out of their original source shale deposit. Oil and natural gas will migrate vertically and laterally through porous rock formations, such as sandstone and limestone, as well as through faults and natural fractures until an impermeable barrier stops their movement. These barriers to hydrocarbon movement are commonly called traps. Oil and/or natural gas accumulate in these traps to form large hydrocarbon deposits. The rock layer in which the hydrocarbons are trapped is called the reservoir.

There are two main categories of conventional oil/gas traps: structural and stratigraphic. Structural traps form when rock layers are deformed and the resulting geometry prohibits the hydrocarbons from migrating any further. Common structural traps include anticlinal folds and faults. Salt Creek, Wyoming’s most productive (and nearly oldest) oil field is an anticlinal trap.

Unconventional Reservoirs

Conventional and unconventional oil and gas resources are defined based on relative ease of development, cost, and recovery techniques. Conventional oil and gas resources generally consist of relatively high permeability reservoir rocks, defined hydrocarbon pools, and can be targeted with vertical wells. Unconventional reservoirs typically have lower porosity and permeability, and rather than hydrocarbons collecting in pools as is the case in conventional reservoirs, they are distributed throughout pore spaces, making them more challenging to extract. With technological advancements, these previously uneconomical resources are becoming the focus of new oil and gas exploration and development. Techniques such as horizontal drilling and hydraulic fracturing are necessary to release the hydrocarbons from these unconventional reservoirs. In general, exploration geologists and engineers attempt to locate hydrocarbon reservoirs that will be productive and profitable enough to outweigh the high costs associated with drilling a well. A single horizontal well can cost from $9 to $25 million.

Unconventional resources that have contributed to Wyoming’s oil and gas industry include shale gas, tight gas and oil sands, shale oil, and coalbed natural gas. The recent increase in Wyoming’s oil production can largely be attributed to the exploration and development of unconventional reservoirs in the Powder River Basin (Sussex, Shannon, Turner, Parkman, Frontier, etc.).

types of reservoirsShale gas is natural gas locked in shale formations. In these reservoirs, the shale is both the source and the reservoir rock. An example of shale gas in Wyoming is the Hillard-Baxter play in the Greater Green River Basin.

Tight gas and oil reservoirs contain natural gas and oil trapped in the pores of siltstones and sandstones with very low permeability (<0.1 millidarcy) and very low porosity (<10%). The prolific Jonah, Pinedale, and Wamsutter fields are Wyoming’s largest tight gas reservoirs.

Shale oil is oil locked in shales and associated tight siltstones or carbonates – all of which have low permeability and porosity. Examples from Wyoming include the Niobrara Shale and Green River Formation. ***Please note that shale oil should not be confused with oil shale. Oil shales are shales that contain kerogen. Generally, hydrocarbons cannot be produced from oil shale using wells. Mining or in-situ heating processes are necessary to extract and convert the kerogen.***

Coalbed natural gas (CBNG), commonly called coalbed methane, is natural gas stored in coal beds. Wyoming’s Powder River Basin has produced large volumes of CBNG over the past 15 years, although production is currently declining. More information on CBNG in Wyoming can be found in the Coalbed Natural Gas section.

Wyoming coalbed methane map Coalbed Natural Gas

Coalbed natural gas (CBNG), also called coalbed methane, development in Wyoming first occurred in the late 1970s, but did not boom until the 1990s.The Powder River Basin hosts the majority of Wyoming's CBNG wells. Because of competition from unconventional gas reservoirs and lower natural gas prices, Wyoming CBNG production is on the decline.

How is Coalbed Natural Gas Formed?

Environments rich in plant material such as swamps, estuaries, and marshes, were prolific in Wyoming during the Eocene Epoch (54–33 million years ago) and the Paleocene Epoch (65–54 million years ago). Time, heat, and pressure converted this organic material to coal. Coalbed natural gas formed in these coal seams by either biogenic or thermogenic processes.

Biogenic: CBM well diagramDuring the earliest stage of coalification (the process that turns plant detritus into coal), biogenic methane is generated as a byproduct of bacterial respiration. Aerobic bacteria (those that use oxygen in respiration) first metabolize any free oxygen left in the plant detritus and the surrounding sediments. In fresh water environments, methane production begins immediately after the oxygen is depleted. Species of anaerobic bacteria (those that do not use oxygen) then reduce carbon dioxide and produce methane through anaerobic respiration. When the temperature of coal underground reaches approximately 122°F (50°C), and after a sufficient amount of time, most of the biogenic methane is fully generated. Also at this time nearly two-thirds of the moisture is expelled from the coal and it reaches a rank of subbituminous.

Thermogenic: After the temperature of a coal exceeds 122°F (50°C), due to the geothermal gradient and excessive burial, thermogenic processes begin to generate additional carbon dioxide, nitrogen, methane, and water. At this point the amount of hydrocarbons or volatile matter has increased and the coal reaches a rank of bituminous. When the temperature of the coal reaches 302°F (150°C), thermogenic production of methane is maximized.


Coalbed Natural Gas Extraction

In the Powder River Basin, most coalbed natural gas wells are completed open-hole. This method involves setting casing to the top of the target coalbed, under-reaming the underlying target zone, and cleaning the coal with a fresh-water flush. A down-hole submersible pump removes water from the coal and depressurizes the aquifer. The methane gas desorbs from the coal, flows up the annulus, and is piped to a metering facility where the gas and water production from each well is recorded. The methane then flows to a compressor station where the gas is compressed and shipped via pipeline. The produced water is either diverted to a central discharge point (called an outfall) and then into a drainage or impoundment, or is re-injected into nearby aquifers.








Enhanced Oil Recovery

schematic diagram of enhanced oil recovery with CO2 and waterEnhanced oil recovery is used to recover stranded oil that remains in reservoirs after primary depletion.

Oil is first produced from reservoirs under primary recovery due to in-situ reservoir pressure aided by pumps. Secondary recovery generally occurs by a waterflood. Water is injected into the reservoir to physically displace the residual oil, which is subsequently recovered by adjacent production wells. The success of waterfloods depends on the permeability of the reservoir and the properties of the oil.

Tertiary recovery techniques are also referred to as enhanced oil recovery, or EOR. Primarily used in declining oil fields, EOR can occur as thermal recovery where heat injection reduces oil viscosity, chemical recovery to lower the surface tension and enhance reservoir flow, or gas injection that displaces and mixes with oil. Gas injection of carbon dioxide (CO2) has become the most significant technique, commonly referred to as CO2-EOR, and is often used interchangeably with EOR.

CO2-EOR has been successful in a handful of fields around Wyoming, including Lost Soldier and Wertz fields and the Monell unit in the Patrick Draw field of the Greater Green River Basin, Salt Creek field in the Powder River Basin, and Beaver Creek field in the Wind River Basin. Grieve field, in the Wind River Basin, began CO2-EOR operations in early 2013. Most of these fields underwent secondary waterflooding prior to CO2-EOR.








For more information on enhanced oil recovery in Wyoming, please see the University of Wyoming’s Enhanced Oil Recovery Institute website.

Crude Oil Classifications

Crude oil is classified by its non-hydrocarbon content (especially sulfur), its API gravity, and pricing benchmarks. Crude oil containing low amounts of sulfur (<0.42 percent) and trace amounts of hydrogen sulfide and carbon dioxide is called sweet crude. Sweet crude oil is typically processed into gasoline. Sour crude oil has total sulfur amounts greater than 0.5 percent and higher hydrogen sulfide (>1 percent) and carbon dioxide concentrations. Because of the larger amounts of impurities in sour crude, larger portions of it are converted to heavy crude oil products, such as diesel and fuel oil.

The American Petroleum Institute (API) gravity of crude oil is an indicator of how heavy oil is compared to water. Oil with an API > 10° is lighter than water, while an API < 10° is heavier than water and will sink. In general, light crude oils have low viscosity, low wax content, and low density/high API gravity (>30° API). Medium crude oil has API gravity between approximately 20° API and 30° API. Heavy crude oil is more viscous, and has a higher density/lower API gravity (10–20° API). Extra heavy crude oil (also called bitumen) has an API gravity less than 10° API.

Because a large proportion of light sweet crude oil can be directly processed into gasoline and other petroleum products, it typically commands the highest prices on commodity markets. An example of light sweet crude is West Texas Intermediate (WTI) Crude from the Texas Permian Basin. It has an API gravity of ~ 39.6° and sulfur content of ~0.24 percent. WTI crude is used as a benchmark in crude oil prices and is usually priced several dollars higher per barrel than other common benchmarks such as the Organization of the Petroleum Exporting Countries (OPEC) Reference Basket and United Arab Emirates (UAE) - Dubai. Recently, however, North Sea Brent crude has been priced higher than WTI, even though North Sea Brent is less sweet (~0.37 percent sulfur).

Natural Gas Categories

Natural gas is often categorized based on its liquid content.

Dry natural gas is almost entirely methane and can be extracted from traditional reservoir rocks or from coal seams. It contains less than 0.1 gallon of liquid fractions per 1,000 ft3 of produced gas.

Wet natural gas contains a larger proportion of natural gas liquids than dry gas. Natural gas liquids (NGLs) are fractions of natural gas that are liquid at surface conditions, and are often separated from dry natural gas in processing facilities. NGLs with a low vapor pressure are called condensates, while NGLs with medium and high vapor pressures are called natural gasoline and liquefied petroleum gas, respectively. Examples of NGLs include propane, butane, isobutene, hexane, heptane, and pentane. Ethane is not typically considered an NGL because it needs to be refrigerated in order to maintain a liquid state. Wet gas typically sells at higher prices than dry gas.





Contact:
Ranie Lynds (307) 766-2286 Ext. 235
Rachel Toner (307) 766-2286 Ext. 248