Developing Natural Gas From Shale Rock
Chevron is involved in every phase of natural gas development. We are leasing land and exploring for natural gas. We are conducting pilot projects to test technologies and evaluate gas shales for future projects. We are drilling and completing new wells. And we are producing, processing and distributing natural gas from shale rock.
Chevron produces natural gas from the Marcellus Shale, which underlies a large area of the eastern United States, and the company is drilling to substantially increase production there. In addition, we successfully tested gas wells in the Haynesville Shale in East Texas and are working on additional prospects in this area. Since 2009, Chevron has added shale gas leases covering about 7 million net acres around the world, including in the United States, Canada, Poland, Romania, Argentina and China.
With the acquisition of Atlas Energy in 2011, Chevron became a U.S. producer of natural gas from shale rock. Chevron is one of the largest leaseholders in Pennsylvania, with more than 700,000 net acres of leases in the Marcellus Shale. The Marcellus is one of North America's largest and richest shale gas resources. It runs beneath large swathes of New York, Pennsylvania, West Virginia and eastern Ohio and dips into neighboring states. The leases add 850 billion cubic feet of proved natural gas reserves to Chevron's portfolio and a potentially recoverable resource of 14 trillion cubic feet—enough to supply 100 percent of U.S. natural gas needs for about seven months.
Chevron plans a robust drilling program to grow its Marcellus production. In addition to the Marcellus opportunity, the Atlas acquisition gave Chevron a strong position in more than 600,000 net acres of the Utica Shale. This vast, undeveloped formation lies beneath the Marcellus.
We also are evaluating prospects in about 380,000 net acres of the Antrim Shale and other gas shales in Michigan that were included in the Atlas deal.
In 2010, Chevron completed a pilot drilling program in the Haynesville Shale that identified 2 trillion cubic feet of potentially recoverable natural gas. Chevron plans a second Texas pilot to evaluate another part of this formation. Chevron holds more than 70,000 net acres in the Haynesville Shale beneath mature conventional oil and gas fields. To further evaluate the Haynesville and other rock layers in the area, Chevron is participating with other companies in a large 3-D seismic survey, with results expected in 2012.
Chevron acquired about 250,000 net acres in western Alberta's Duvernay Shale in 2010 and has developed a three-year exploration program to evaluate the gas resource. Using the available seismic and well data from the area's long history of oil and gas production, we advanced our evaluation of the acreage and drilled an initial exploration well in 2011.
Chevron is exploring about 3 million acres under recent and pending agreements with the governments of Poland and Romania. In 2011, we conducted seismic programs in both countries and drilled our first exploration well in Poland. If commercial quantities of gas are confirmed in these shale formations, Chevron may seek permission to develop long-term production opportunities.
Chevron signed a joint study agreement to explore for natural gas from shale in China's Qiannan Basin, in the southwestern province of Guizhou. Seismic operations began in July 2011. Drilling on the initial well began in the first quarter of 2012.
Chevron expects to drill two exploratory wells in the Vaca Muerta formation in Argentina's El Trapial crude oil field. We have been producing oil at El Trapial for many years, but the concession now also has potential for shale gas production.
Updated: May 2012