2 wells on one pad in gonzales co
DESCRIPTION
2 Wells On One Pad in Gonzales Co. 3 Wells On One Pad in Gonzales Co. 4 Wells Just Drilled by EOG in Gonzales Co. (using FracFocus.org). 22 Wells On One Pad in Bakken. 2) Moving the Rigs. Rig Moving on Rails. Rig Moving on Rails. Piping Moves With Rig Movement. - PowerPoint PPT PresentationTRANSCRIPT
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2 Wells On One Pad in Gonzales Co.
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3 Wells On One Pad in Gonzales Co.
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4 Wells Just Drilled by EOG in Gonzales Co. (using FracFocus.org)
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22 Wells On One Pad in Bakken
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2) Moving the Rigs
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Rig Moving on Rails
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Rig Moving on Rails
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Piping Moves With Rig Movement
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Increasing Efficiency Begins to Show Up
Source: Baker Hughes Quarterly Well Count Report
Started 1 well every 24 days
Started 1 well every 18 days
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Seeing Well Costs Drop from $14 mil. to $6 mil.
Source: UTSA Economic Impact of the Eagle Ford Shale Study
Sept. 2010
Sept. 2013
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3) Well Spacing
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My Early Prediction of the Length of Eagle Ford Drilling Activity
The Dallas Federal Reserve reported that 5 mil. acres of the Eagle Ford are under lease.
So I assumed:– 4 mil. acres/200 acres drained per well = 20k total wells
– 250 rigs x 5 wells drilled per yr. = 1,250 wells per yr.
– 20k wells needed/1,250 wells per yr. = 16 years to drill
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EOG Downspacing Means More Wells
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Factors to Consider With Increased Downspacing
1) When laterals get close enough, they start to “communicate”
2) Marathon data shows two wells on 40-acre spacing will each have about 80% of the recovery as one well on 80-acre spacing.
Ex. 1 well @ 80 acres produces 1,000 bbls of oil (Total = 1,000 bbls)vs
2 wells @ 40 acres produce 800 bbls of oil each (Total = 1,600 bbls)
3) So increased production must be weighed against increased well cost (may only work on the best “sweet spots”).
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Rosetta Resources Map of Its Well Spacing Plan
Source: Rosetta Resources
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My Revised Guess of Future Eagle Ford Drilling Activity
The Dallas Federal Reserve reported that 5 mil. acres of the Eagle Ford are under lease.
So my latest guess is:– 4 mil. acres/80 acres drained per well = 50k total wells
– 200 rigs x 20 wells drilled per yr. = 4,000 wells per yr.
– 50k wells needed/4,000 wells per yr. = 12.5 years to drill
* However, consider a few other factors…………….
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4) Tapping Other Pay Zones in the Future
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Multiple Payzones Could Extend the Long-term Life of a Field
Eagle Ford
Austin Chalk
Pearsall
Buda
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Horizontal Wells Using Pad Drilling in Multiple Stacked Plays
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Also Experimenting With “Stacked Lateral” Development
Within the Eagle Ford Play
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Stacked Laterals Being Tested by Rosetta Resources in the Gates Ranch Field
Source: SeekingAlpha Article Nov. 18, 2013
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Finally, Don’t Forget the Possibility of “Secondary Recovery” (ex. Re-fracking)
Activity on Existing Wells
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What Could Derail This O&G “Boom”
• A major breakthrough in renewables (wind, solar, etc.)
• Water availability or contamination endangering aquifers or surface
• Govt. involvement becomes too onerous – (ex. EPA severely regulates: water disposal, air quality, frack fluids– (ex. 2. U.S. Fish & Wildlife: finds endangered species in area)
• The big one: A severe drop in price
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Unknowns that Could Affect Price
• How fast will technology improve?o “Decline rate” & “recovery rate” improvementso Drilling costs (drilling times; completion techniques; water usage, etc.)
• How much LNG will be exported from the US?o Pits Petrochems, Manufacturing, Elect. power against Producers
• Will restrictions on exporting crude be lifted?o Pits Refiners against Producers
• Will refiners retool to handle more light crude?o Would repeal of the Jones Act help distribution?
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A Couple of Final Points
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Remember: Undeveloped Countries Will Be Driving Future Oil Demand
Source: Oil & Gas Investor Magazine
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Consider: 6 of Top 10 Oil Companies Globally are “Government-controlled”
Saudi Arabia
Russia
Iran
China
Kuwait
Mexico
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http://recenter.tamu.edu
REAL ESTATE CENTER at TEXAS A&M UNIVERSITY
Mays School of Business