Going longer, not necessarily deeper, is paying off for U.S. shale players when it comes to hitting abundant hydrocarbon pay.
Experience in the oil patch has already illustrated the upsides of horizontal drilling, as many in the industry know. However, the benefits of horizontal drilling, which has been around for decades but strengthened in recent years by improved techniques and technology, were backed up in a report released recently by the U.S. Energy Information Administration (EIA).
Turing to 2015 data, the EIA said that nearly 77% of the highest-producing oil wells in the U.S.—those that produced more than 400 barrels of oil equivalent per day (boe/d)—were horizontally-drilled wells. Typically, the vertical thickness of geologic formations pales in comparison to horizontal thickness, which when targeted along with use of hydraulic fracturing can maximize production.
“For about 85,000 moderate rate wells producing in 2015, defined here as more than 15 boe/d and up to 400 boe/d, 42% were drilled horizontally,” the EIA said in its report. “Of the approximately 370,000 lowest-rate, marginal oil wells in 2015, also known as stripper wells, only about 2% were horizontal wells.”
As oil companies learn more about the geological conditions of the shale plays in which they work, some are opting to drill longer laterals in an effort to raise production.
Schlumberger (NYSE: SLB) is among the oilfield service companies actively pursuing longer laterals in North America. Schlumberger CEO Paal Kibsgaard called the longer horizontal laterals “super laterals” and pointed out their ability to increase reservoir contact in an effort to produce more oil and gas.
During the company’s third-quarter earnings call Oct. 21, Kibsgaard said the company drilled a well with a record lateral length of 18,500 ft for Eclipse Resources Corp. (NYSE: ECR). The Utica Shale well was drilled in less than 18 days using a combination of drilling technologies—including Schlumberger’s PowerDrive Orbit powered rotary steerable system for optimized directional drilling—in a one-bit run. The super lateral cut costs by lowering the number of required horizontal penetrations, Schlumberger said.
RELATED: Schlumberger Targets ‘Super Laterals,’ Subsea Tiebacks
Schlumberger and Eclipse are just two of many with their eyes on longer laterals.
Speaking during Hart Energy’s recent DUG Midcontinent conference, Scott Goodwin, vice president of operations for FourPoint Energy, spoke about advances in drilling technology.
“We’re really keen on longer laterals,” Goodwin said. “The indications from longer laterals are tremendous.” The company has plans to spend $3.2 billion in the Western Anadarko Basin, having already identified 700 well locations on its acreage.
RELATED: ‘Low-Hanging Fruit’ Awaits In The Western Anadarko
Now that techniques are improving and producing results, hopes are that oil prices and demand will catch up, so producers can turn those improved techniques into profits. The global oil glut remains, and oil prices have been unable to stay above $50 per barrel.
Velda Addison can be reached at vaddison@hartenergy.com.
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