Predicting the future is far from an exact science, but it is possible to see trends by looking to the past. With a fresh slate of 365 days to work with in 2018, it is 2017 and the few preceding years that are top of mind. In that time we have witnessed laterals stretch 1.6 km to 4.8 km (1 mile to 3 miles) into shale and tight rock formations. While drillpipe and bits are pushed to the limit, the impact of that push is felt long after the well is completed.
Spears & Associates, a Tulsa-based oilfield equipment and services market research firm, recently released a snapshot report on the impact of longer laterals on artificial lift systems. In the “Drill, Produce, Abandon, Repeat” report, the authors applied a little scientific analysis to the unscientific observations made by industry insiders.
Lift sales are the first clue about how E&P companies are approaching shale field developments, according to the report.
“By this point in the cycle artificial lift systems should be flying off the shelves. Sales in 2017 should be up 20% over 2016, but they aren’t. The market [in 2017] is up only an anemic 5% over last year,” the authors stated.
The lower-than-expected numbers indicate that the focus on developing a shale field is on “getting the crazy long laterals drilled fast and cheap [and] getting them fractured for the lowest possible cost and onstream as quickly as possible. The idea is to produce the well as hard as possible,” the report said.
“Most of our customers are saying, ‘drill the well cheap and fast, frack it hard, produce it as long as it will flow [and] shut it in,’” a directional driller said in the report. “They are willing to give up the last 50 years of a well’s life.”
With all of the technology advances made to date and future ones to come, is giving up that kind of production potential the best and highest use of the reservoir?
A production technology manager noted in the report, “We incentivized our drilling engineers to drill feet of hole as quickly as possible. In every drilling meeting I would tell them, ‘I don’t care if you can drill a tight curve, I need a long, smooth path so I can get my artificial lift equipment into the well,’” he said. “They would leave the meeting and go right back to drilling fast and with a lot of doglegs. We’ve always had a hard time getting the drilling team to think about the needs of the production department, but this problem may be worse now, and the impact might be harsher.”
How can that impact be lessened? There’s been much said over the preceding years about the need to increase collaboration, to break down silo walls and communicate across departments. Perhaps one way to lessen that impact is to reward feet of well drilled the fastest and smoothest?
The report noted that there may not be as much oil recovered from these wells with long laterals as being advertised and that the prize is huge for the company that can develop a low-cost lift technology that works in long horizontal wells.
“Long laterals are fairly shortsighted,” the report stated. What do you think? Drop me a note in my inbox.
Jennifer Presley’s Drilling Technologies column originally appeared in the January 2018 issue of E&P.