Over the past 50 years, technology across every sector has evolved exponentially. Computer processing power has doubled roughly every 18 months since the mid-1960s. The Internet has exploded, from a small research network into a sprawling system of more than 3 billion users, and computers that once filled rooms now fit into our pockets.
Technological transformation is rapidly changing our everyday lives. And while today’s most buzzed-about innovations—smart phones, self-driving cars, augmented reality—are largely in the consumer space, equally significant and impactful advancements are happening in the industrial space, and most certainly within the oil and gas industry. Technology’s biggest impact has been—and will continue to be—improved efficiency.
INNOVATION IN THE SHALE PATCH
Finding better and more efficient ways to operate has long been essential to thriving in the oil and gas industry, and the advancements in technology and tools—and the smarter application of each—have resulted in exponential increases in efficiencies, particularly during the last few years.
The impact of innovation and technological advancement has been especially important in shale fields. This seems appropriate, given that the shale boom of the 2010s was made possible by innovations from decades earlier, thanks to George Mitchell, the “father of fracing.” Considered by some to be this century’s greatest innovation to date, technology to extract oil from previously unyielding shale was not, in reality, a new technology. Rather, it resulted from advancements in two technologies, beginning in the late 1990s. This ushered in the shale era and the transformation of the U.S. oil and gas industry.
As the oil and gas industry faces the many challenges brought forth by the volatile price environment, achieving increased efficiencies, through the application of new technology and tools, can make the difference in surviving—or even thriving in—the downturn.
Understanding this necessity to evolve, operators have embraced smarter applications of technologies in new and different ways. For the shale patch, this approach allows producers to more effectively drill horizontal wells, to significantly reduce drilling costs, and to push the limits of lateral length to greater distances.
FORECAST FOR CONTINUED ADVANCEMENT
The U.S. Energy Information Administration (EIA) reported recently that the future of U.S. shale oil will largely be determined by how quickly drilling technology can evolve over the next 25 years. While the decline in U.S. shale oil production is likely to continue through next year, the EIA forecasts that rapid technological advancement and high oil prices could, eventually, push shale production up from a predicted 4.2 MMbopd in 2017, to 12.9 MMbopd by 2040. The EIA attributes most of this increase to “higher oil prices and the ongoing exploration and development programs that expand operator knowledge about producing reservoirs.”
As progress continues to accelerate, we must continue to innovate through experimentation, sharing of best practices, and thoughtful application of new and existing technologies.
Today, there are four key areas that shale producers must target, to maximize those efficiencies and create the most value to boost the bottom line: drill bits and cutter development; surface drilling equipment; directional drilling tools; and pad drilling.
In my estimation, operators have realized a more-than-35% increase in efficiencies through these methods over the past eight years, and there is potential for an additional 15%-to-20% jump over the next two years, based on the accelerated rate of innovation in the industry, born out of ingenuity, technological advancements and the simple desire to survive.
DRILL BITS AND CUTTER DEVELOPMENT
The drill bit has shaped the drilling industry more than any other tool or technology over the past 35 years. With continued improvements, it is a prime example of a technological advancement that is leading to a swift evolution in drilling techniques.
The combination of polycrystalline diamond compact (PDC) bit development, cutter placement in the bit, cut depth, range of cutter sizes incorporated into the bit, and the number and type of blades on the bit, have all contributed to the greater efficiency of the PDC bit.
Industry has evolved from crushing rock with tricone insert bits to shearing rock with PDC bits as a primary means of drilling a new hole. Of course, applications remain for tricone and tungsten carbide insert (TCI) bit drilling, but PDC cutter development has enhanced our ability to drill through rock that was previously thought to be too abrasive or too hard.
Three or four bits were once needed to drill a particular hole section. Today, drilling deeper with the surface casing drill-out bit—and being able to use larger, 13-mm PDC cutters in that bit—has allowed many operators to drill intermediate holes with just two bits, without having to sacrifice rate of penetration (ROP). Plus, today’s bits, used for drilling production holes, are designed to minimize reactive torque, thus allowing directional tool face to be maintained more easily while drilling the curve, as well as helping the bit to drill in zone.
Enhanced PDC bits can not only be controlled by directional drillers, without a significant loss in penetration rate, but they also can drill rock faster. Based on my experiences in drilling Haynesville shale horizontal wells in North Louisiana less than a decade ago, it required an average of 54 days to drill each 4,300-ft lateral well to approximately 16,800 ft, MD, from spud to releasing the drilling rig. Since then, the number of bits required to drill Haynesville shale wells has dropped, while the increased ROP has continued to climb for each type of bit being used in the well. As a result, by 2015, the same type of well could be drilled in approximately 34 days, Fig. 1.