American Oil and Gas Reporter - March 2016 - 55

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SpecialReport: Gas Industry Strategies
eight rigs would be needed to drill 101
wells to cover demand from Gulf Coast
LNG facilities.
The Eagle Ford would be the largest
gas supplier in this model, with 40 rigs
at startup drilling 939 laterals. After 10
years, a dozen rigs would be required to
drill 271 wells to maintain supply. In this
model, the Woodford supplies the least
amount of gas to Gulf Coast terminals,
with only 16 rigs drilling 431 wells during
the first year and five rigs drilling 116
wells during year 10.
The Fayetteville is the last basin utilized
in the Gulf Coast LNG supply model. It
would require 17 rigs to drill 906 wells
during the first year of LNG shipments,
dropping to four to drill 205 horizontals
after 10 years.
Improvements in drilling efficiencies
may lower the number of rigs required in
the modeling forecast, and productivity
improvements could reduce the number
of wells needed. On the other hand, if
more new drills produce a multiphase
mix of oil, gas and condensate as opposed

to only dry gas, incrementally more wells
and rigs may be needed.
If all the LNG trains were to come on
line at the same time, it would create a
spike in drilling rig demand. However,
with the phased startup of the permitted
Gulf Coast plants over four years, a minimum of 30-50 rigs working continuously
should be able to keep up with demand.
This may be impacted by U.S. gas storage
and demand levels.
To predict future drilling hot spots,
the study looked at the ratio of EUR
versus well cost for the plays, admittedly
ignoring other factors that may influence
drilling decisions. The Fayetteville yields
the greatest EURs for the lowest well
cost, followed by the Haynesville, Barnett,
Eagle Ford and Woodford (Table 2).
Assuming that the Marcellus would
supply 100 percent of the 820 MMcf/d
of input gas for Cove Point, 12 rigs would
be required to drill 253 horizontals during
the first year of exports, but after eight
years, only three rigs could maintain production. Analyzing well cost per EUR

shows the Marcellus is fairly cost competitive with shale plays fueling Gulf
Coast LNG facilities, ranking about the
same as the Barnett and ahead of both
the Eagle Ford and Woodford.
With up to 3,400 shale wells needed to
supply a single LNG train, the total well
count necessary to supply the LNG plants
already under construction and beginning
to enter service would be at least 38,000
over 30 years, if shale plays exclusively
were to supply all the demand. For perspective, that would represent more than
twice the number of producing wells in
the nation's oldest and most developed
gas shale play-the Barnett-and nearly 14
times the number of wells drilled in the
Haynesville since its discovery in 2007.
The best news for the industry is that
those LNG supply wells will be needed
above and beyond the wells required to
service domestic natural gas consumption,
which has grown by 5 Tcf annually over
the past decade and which EIA forecasts
will continue expanding gradually in
coming decades.
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American Oil and Gas Reporter - March 2016

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