Horizontally drilled wells dominate U.S. O&G production

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.

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.

More access

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.

Vertical-well production in Permian plummets

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.

Related Links: Energy Information Administration

Source: Kallanish Energy