Horizontal drilling has effectively replaced conventional vertical drilling

From an Article by Kallanish Energy News, June 7, 2019

Wells drilled horizontally into tight oil and shale gas plays continue to account for an increasing share of crude oil and natural gas production in the U.S., the Energy Information Administration said Thursday.

In 2004, horizontal wells accounted for roughly 15% of U.S. crude oil production in tight oil formations. By the end of 2018, that percentage had skyrocketed to 96%.

Similarly, horizontal wells comprised roughly 14% of U.S. natural gas production in shale plays in 2004, and jumped to 97% last year.

There were more vertical than horizontal wells until 2017!

Although horizontal wells have been the dominant source of production from U.S. shale gas and tight oil plays since 2008 and 2010, respectively, the number of horizontal wells did not surpass the number of vertical wells drilled in these plays until 2017.

Roughly 88,000 vertical wells in tight oil and shale gas plays in the U.S. still produced crude oil or natural gas at the end of 2018, but the volume produced by these wells was minor compared with the volume produced by horizontal wells, acording to EIA.

Many of these remaining vertical wells are considered marginal, or stripper, wells, which will continue to produce small volumes until they become uneconomic.

Drilling horizontally allows producers to access more of the oil- and natural gas-bearing rock than drilling vertically. This increased exposure allows additional hydraulic fracturing with greater water volumes and pounds of proppant.

The lateral length of horizontal wells has also increased, allowing for more exposure to oil- and natural gas-producing rock from a single well.

The production history of horizontal vs. vertical wells varies by play, EIA said. For example, some tight formations in the Permian Basin have a long history of vertical well production. In 2004, vertical wells generated nearly all (96%) crude oil production from these formations.

As late as 2014, vertical wells accounted for as much as half of Permian production, but by 2018, vertical wells accounted for only 7% of that production. By contrast, modern production in the Marcellus Shale play in the Appalachian Basin is almost entirely from horizontal drilling.

While some of the first natural gas wells in the U.S. were drilled in Appalachia, production shifted to more economic areas and only resumed upon the development of horizontal drilling and hydraulic fracturing techniques.

Presently, essentially all (99%) hydrocarbon production from the Marcellus has been from horizontally drilled wells.

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See Also: Super Laterals: Going Really, Really Long In Appalachia | Hart Energy, July 2, 2018 ·

One horizontal well had an extended lateral length of 18,500 ft with a total depth of 27,048 feet. It was completed with 124 stages of fracturing. After the first 24 hours of flowback into sales, the well was producing approximately 5 MMcf of 1,300 Btu gas, with 1,200 bbl of condensate per day. To date, the company has drilled 15 super laterals with an average lateral length of 18,375 ft. Its longest lateral was 20,803 ft—Purple Hayes, which was drilled in 13 days.

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See Also: JPT — Drilling for Miles in the Marcellus: Laterals Reach New Lengths, August 8, 2018

Drilling costs per foot have fallen dramatically

Purple Hayes Gas Well in Eastern Ohio

Ohio Drillers Setting Utica Shale Production Records — Amount of Utica Shale Acreage  Increasing

From an Article by Casey Junkins, Wetzel Chronicle, May 17, 2017

St. Clairsville, Ohio — Eclipse Resources officials left a “Purple Hayes” with their 3.5-mile-long horizontal well last year, but their “Great Scott” operation now stretches almost 1,000 feet farther into the Utica Shale beneath in Guernsey County in eastern Ohio.

As Eclipse drills deeper and farther into the shale, fellow operators Gulfport Energy and Rice Energy continue increasing production and adding new acreage for future fracking.

“In the Utica condensate area, I am extremely happy to announce that we successfully drilled what we believe is the world’s longest onshore lateral ever drilled with a total measured depth of 27,400 feet and completable lateral extension of 19,300 feet, almost 1,000 feet longer than the previous record held by our ‘Purple Hayes’ well,” Eclipse Chairman, President and CEO Benjamin W. Hulburt said.

According to the Ohio Department of Natural Resources, the Great Scott well is located in Guernsey County, west of Barnesville and south of Cambridge. Industry leaders consider condensate as light form of crude oil.

Eclipse, which also has operations in Belmont and Monroe counties, is benefiting from the recovery in the industry. The company posted net income of $26.8 million for the first three months of this year, which compares to a net loss of $45.5 million during the same time period in 2016.

“This was another tremendous quarter for us as we continued our track record of exceeding production expectations, while expanding our operating margin by keeping our per unit operating expenses and our general and administrative expenses low,” Hulburt added.

Gulfport Energy, meanwhile, grew production to 849.6 million cubic feet per day in the first three months of this year, a 23 percent increase from the first quarter of 2016. The company maintains substantial operations in Belmont, Monroe and Harrison counties.

“We are extremely pleased with the results from these new wells and would expect both of the wells to rank among the top wells completed in the play to date,” Gulfport CEO and President Michael Moore said of the company’s new operations.

Rice Energy, featuring numerous wells in Belmont County, recently set a new company-best mark by drilling 6,170 feet during a 24-hour period, a 15 percent improvement from its previous mark.

The firm averaged 1.27 billion cubic feet of natural gas production in the first three months of this year, which is an 11 percent increase from the 2016 period. The company hopes to reach 2 Bcf per day by 2019.

“Looking ahead, we are focused on generating best-in-class exploration and production results to achieve our three-year exploration and production targeted growth outlook,” Rice CEO Daniel Rice IV said.

Data provided by ODNR show Buckeye State drillers and frackers pumped 1.37 trillion cubic feet of natural gas in 2016, a new record that shatters the previous year’s mark of 955.6 billion cubic feet. One billion cubic feet of gas is enough to provide power to about 24,315 homes for one year.

See also: Eleven ‘Super-Lateral’ Wells for East Ohio