By now, most Pennsylvanians have heard of the overlapping Marcellus and Utica shale formations. But there’s a third layer of shales sitting atop both of them in Southwestern Pennsylvania that has the oil and gas industry, and by extension the legal industry, buzzing.
It’s known as the Upper Devonian shale formation and some in the industry have deemed it the next frontier for horizontal drilling and hydraulic fracturing.
But is the hype warranted?
The energy lawyers the Law Weekly spoke to all agreed that the Upper Devonian formation is still in the relatively early stages of being “proved up”—the process in which test wells are drilled to determine a shale’s production potential—but the consensus among them was that it’s likely to further cement the natural gas industry’s presence in Pennsylvania.
Michael P. Joy, a partner in Reed Smith’s energy and natural resources group, said the Upper Devonian is more proof that the Marcellus Shale was only the beginning of unconventional gas production in Pennsylvania.
“That means the industry has an even longer shelf life in the region and, for consumers and the economy, it means there are even more of the raw materials to drive an energy sector economy,” Joy said.
Joy said that while the Upper Devonian formation itself is by no means a new discovery, the ability to explore its gas-producing potential is the product of technological advances in hydraulic fracturing and horizontal drilling.
The term “Upper Devonian” is a designation used to denote the geologic age of the formation.
Perhaps the simplest way to think of the shale located within the Upper Devonian formation in relation to the Marcellus and Utica shales is to imagine a column below the earth’s surface made up of several different layers.
Of the three, the Utica Shale is located the deepest and is considered part of the Upper Ordovician layer. Above that lies the Middle Devonian layer, which includes the Marcellus Shale, and on top of that is the Upper Devonian layer.
“Like the Utica or the Marcellus, this is another geologic interval that can only be exploited using hydraulic fracturing and horizontal drilling,” Joy said. “As unconventional technology in the Appalachian Basin has evolved to make the Marcellus highly productive, that technology is now being deployed to explore other geologic columns to see if we have ‘stacked pays.’”
“Stacked pays” is an industry terms that means exactly what it sounds like: stacked formations capable of producing economically viable gas.
And so far, lawyers told the Law Weekly, the data coming out of the Upper Devonian wells indicates the potential to be highly lucrative.
To put it into perspective, Kenneth S. Komoroski, an oil and gas partner in Morgan, Lewis & Bockius’ Pittsburgh office, said that on a scale of 1 to 10, with 10 being the largest and most resource-rich shale formation, the Marcellus Shale would be a 10, the Utica Shale would be a 6 and the Upper Devonian would be an 8.
Even if the Marcellus and Utica shales didn’t exist, Komoroski said, data has thus far indicated that the Upper Devonian’s natural gas reserve alone would be enough to potentially keep the oil and gas industry active in Pennsylvania for 25 to 30 years.
“We’re talking about trillions and possibly hundreds of trillions of cubic feet of gas,” Komoroski said.
- Read more about it in an upcoming issue of Pennsylvania Law Weekly.