A new study from the University of Texas at Austin’s Bureau of Economic Geology says the Fayetteville Shale will continue its viability as a source for U.S. natural gas for years to come. The study finds the shale play holds economically recoverable reserves totaling 18 trillion cubic feet, enough for recovery through 2050.
The study is funded by the Alfred P. Sloan Foundation. It analyzed the basin’s production history from existing wells and reviewed areas that have not yet been drilled. The study found the Fayetteville Shale holds 38 trillion cubic feet of recoverable gas reserves, but 20 trillion cubic feet do not appear to be economically viable.
“The higher productivity tiers are, not surprisingly, more developed,” said co-principal investigator Svetlana Ikonnikova, an energy economist, “The lower tiers remain uneconomic at almost any foreseeable gas price.”
The study finds about 18 Tcf are economically recoverable at prices around $4/MMcf, an amount slightly above current prices. At that price, production would plateau sometime in the period of 2012-2015 and begin a gradual decline as the annual well count decreases.
The study found low-performing wells located next to high-performing wells, a trend common in conventional oil and gas basins. Study authors say this goes against the trend from some analysts to label entire shale basins as “economic” or “uneconomic,” which study data suggests is inaccurate.
The Fayetteville Shale assessment is part of a four-basin study of shale gas reserves.