Pad Drilling: Innovation in the Oil and Gas Industry

INNOVATION IN THE OIL AND GAS INDUSTRY PAD DRILLING The oil and gas industry has witnessed extensive innovations in recent decades. One of the most valuable innovations has been pad drilling-horizontal, multi-well sites-versus the traditional, vertical, one-well sites. Pad drilling is becoming the new status quo in drilling technique. SETTING THE STAGE Pad drilling originated offshore but first gained prominence onshore in the Rockies in 2004 as a way to drill more wells in a region where regulatory issues restricted the number of surface locations. In the Eagle Ford Shale, pad drilling moved from a niche application to an industry-wide technique to maximize economic efficiencies. GROWTH IN % OF PAD DILLING OF HORIZONTAL WELLS 2012 20% 4TH QTR. 2014 70% 1ST QTR. 20 40 80 100 GAINING MOMENTUM In 2013 pad drilling increased rapidly and became an integral component of the onshore oil and gas industry. Pad drilling reduces cycle time, well costs, well site processes and surface footprint, benefitting the industry environment, oil and gas operators, and investors. AS RIG COUNT FELL, WELL COUNT AND PRODUCTION ROSE IN 2013 24% -13% 27% -11% BAKKEN MARCELLUS EAGLE FORD WELL COUNT RIG COUNT REDUCING PRODUCTION TIME AND COSTS Consolidating several surface locations on a single pad can mean savings for the operator: Enables operators to drill in batches and shortens cycle time by dividing wells into vertical and horizontal Cuts down on trucks needed to move rigs, saving an estimated 10-15% in well costs (Some rig moves involved more than Lessens the time needed to move the rig between wells segments, eliminating duplicative processes. 40 truckloads!) EFFICIENCY GAINS FROM PAD DRILLING Frac Completion To Start Of Production Rig Release To Start Of Completion Drilling Frac Rig Move Four-Well Individual Program 208 DAYS Four-Well Pad 170 DAYS 40 DAY EFFICIENCY GAIN MAKING MOBILITY POSSIBLE Moving rigs used to be a long and tedious process but now contractors are using skid and walking systems, which make pad drilling possible WALKING SYSTEMS - Allows a rig to move over existing well equipment - Costs approximately $1 million - Eleven weeks to retrofit an existing rig - Better automation, self-leveling and greater versatility SKID SYSTEMS - More widely used by operators - Costs approximately $700,000 Eight weeks to retrofit 40% NEARLY 40% OF DRILLING RIGS WILL HAVE EITHER A SKID OR WALKING SYSTEM BY THE END OF 2014 REDUCING ENVIRONMENTAL IMPACT Concentrating well development saves surface area FEWER ACCESS ROADS FEWER PAD SITES LESS SURFACE IMPACT FLEXIBILITY IN LOCATION OF PAOS LOOKING AT FUTURE ADVANCEMENTS PAD DRILLING HAD A PRODUCTIVE Improving efficiencies in horizontal completions YEAR AND WILL Extending lateral lengths ONLY CONTINUE Stacking laterals to maximize multiple formations TO EVOLVE: Increasing the number of wells per pad to accommodate downspacing and exploitation of multiple stacked reservoirs SOURCES: https://www.ugcenter.com/Bakken/The-Bakken-Moves-Pad-Drilling_19679 http://www.oilandgasinvestor.com/OGI-Magazine/Oils-Launching-Pad_1286547chamore-title http://www.oilandgasinvestor.com/OGI-Magazine/A-Pad-Primer 128664?chamore-title http://www.eia.gov/todayinenergy/detail.cfm?id=7910 http://www.epmag.com/item/Walking-tal-Pad-drilling-prompts-rig-design-evolution_129611 HARTENERGY