The Energy Industry’s Most Profitable Resource
After decades of flat-to-declining production, oil and gas production in the United States is soaring, thanks to shale fields – such as the Bakken, Eagle Ford and the Marcellus.
We owe this all to the marriage of two technologies – hydraulic fracturing and horizontal drilling.
With its Marcellus Shale formation, Pennsylvania had produced about three trillion cubic feet (tcf) of natural gas in 2013. Of that amount, 1.7 tcf was captured in the second half of 2013 – a rise of 47% from the previous year.
Indeed, half of the state’s most productive wells were brought online in the second half of the year – all using the new technology…
New Innovations Give Drillers An Edge
At the dawn of the shale revolution about a decade ago, horizontal wells a quarter-mile long were considered a technological marvel.
Today, drillers in Pennsylvania are regularly producing horizontal wells between 6,000 and 7,000 feet. And the wells are drilled in a much shorter timeframe.
Just think of how many old-fashioned vertical wells would be needed to access the same gas that one horizontal well does today.
So what are some of the latest advancements in drilling technologies being used in the Marcellus Shale?
One innovation is a sensor that detects particularly promising rock intervals within formations. Drillers can then steer the drill string (a column of drill pipe connected to the bit) up and down to target the interval accordingly.
Last year, CONSOL Energy Inc. (CNX) used the technology to drill a well more than 18,500 feet long, 8,000 feet deep, and 10,684 feet side to side.
Another advancement is the use of pad drilling. A drilling pad may contain five or 10 wells, which are horizontally drilled in different directions, spaced closed together at the surface. Once one well is drilled, the fully constructed rig can be lifted and moved a few yards over to the next well location using a hydraulic walking system.
This is in sharp contrast to past practices, where an entire drilling rig would have to be taken apart and re-assembled (even if it was only a few feet away) to drill another hole. Or another rig would have to be used.
Both options were costly, to say the least.
The idea is to make more cracks at closer intervals throughout the drill hole. Using advanced fracking techniques, Chesapeake is blasting cracks into rocks at 10 times the rate it was a few years ago.
More Profits to Come
Not surprisingly, these new technologies are also driving down the cost of drilling.
For example, Chesapeake Energy says the cost of drilling a well in Ohio’s Utica Shale fell from $8.5 million to $5.9 million.
Most Marcellus wells today are in the $5-million-plus range, too.
Bottom line: The shale revolution has already come a long way thanks to technology. And as companies develop new technologies to pursue even greater profits, we’ll be on the lookout for the latest and greatest.
And “the chase” continues,