American Oil and Gas Reporter - January 2017 - 94

Tech Trends

High-resolution 3-D laser imaging provides comprehensive field surveys and detailed
models of subsea assets to support a variety of life-of-field and asset integrity applications, including subsea inspection, maintenance, repair and operations. Images courtesy
of 3D at Depth.

to evaluate, analyze and improve wellbore
construction processes from spud to total
depth. Horizontal sections of wells are
being drilled longer, faster, better and
cheaper almost by the day.
The U.S. Energy Information Administration says average U.S. horizontal
well drilling costs now range from $1.8
million to $2.6 million a well. This has
caused total onshore well construction
costs versus completion costs to flip in a
relatively short period, from 60-70 percent
to 30-40 percent. That is, before the expansion of horizontal drilling in unconventional plays, the drilling component
accounted for 60-70 percent of total well
cost. Today, completion costs averaging
between $2.9 million and $5.6 million a
well account for 60-70 percent, with
drilling representing 30-40 percent.
In deep water, EIA reports that drilling
continues to comprise 60 percent of total
well cost while completion activity makes
up 40 percent. Even so, costs related to
the rig (i.e., drilling and completion operations) account for 90-95 percent of
total deepwater well costs.
Per well productivities also have increased at an astonishing pace. New-well
oil production per rig jumped by 7.5
times in the Permian Basin between November 2013 and November 2016 (from
79 to 611 barrels a day) while new-well
94 THE AMERICAN OIL & GAS REPORTER

gas production per rig more than doubled
in the Marcellus (from 6.038 to 12.290
million cubic feet a day) over the same
three-year span, according to EIA data.
In the Niobrara, per-well production per
rig went from 317 bbl/d of oil and 995
Mcf/d of gas in November 2013 to 1,177
bbl/d and 3.794 MMcf/d, respectively,
by November 2016.
As these numbers illustrate, each well
drilled today is as productive as multiple
wells drilled and completed only three
years ago. Even with lateral lengths in-

creasing to almost 7,000 feet on average,
the industry has experienced a nearly
threefold increase in daily footage drilled.
This increased efficiency, in combination
with optimized completion techniques, is
leading to overall downward pressure on
drilling costs, and is allowing far fewer
rigs to drill much more productive wells.
Thanks largely to technological innovation, the industry was able to respond
to the severe drop in oil prices in late
2014 in a rather remarkable way. In many
onshore shale plays, operators have slashed
break-even prices by half. In fairness,
this was made possible in part by equipment and field service costs falling to
levels that likely are not sustainable.
Higher demand typically drives up
the costs of goods and services, which
would impact break-even costs as commodity prices recover, reinforcing the
need for R&D. Moreover, the dramatic
decline in break-even costs in shale plays
was not achieved to nearly the same level
in deep water and conventional reservoirs,
where additional R&D could provide
added benefits.
Reduced drilling costs, competitive
leasing pressures, and low commodity
prices have contributed to increased numbers of drilled but uncompleted (DUC)
wells. While there always is some inventory of DUCs, EIA estimated 4,117 uncompleted wells in the Bakken, Eagle
Ford, Niobrara and Permian, and another
914 DUCs in the Marcellus, Utica and
σhmin

Pore Pressure Distribution
Stress Reversal

In Situ
Stress State
σhmax

Vertical Well

Refracture

Well refracturing treatments in shales and tight sands can improve reservoir access, restore production, and increase reserves recovery. This ﬁgure depicts improved conductivity and extension of existing fracture length by refracturing a vertical producing well
to drain a new part of the reservoir.

American Oil and Gas Reporter - January 2017

Table of Contents for the Digital Edition of American Oil and Gas Reporter - January 2017