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Friday, October 3, 2014

Everything's coming up roses

Earlier this year, as I wrote here, the US Energy Information Administration reported that a Marcellus Shale well completed by a rig in April 2014 can be expected to yield over 6 Mcfg per day more than a well completed by that rig in that formation in 2007 - a testament to the industry's resourcefulness in getting more gas out of every well.

This article from NaturalGasIntel.com is a must-read.  It describes some of the advances in drilling technology and operations that are driving down costs for Marcellus Shale drillers - and driving up profits.

Some excerpts:
The Marcellus Shale has for some time now been touted for its low finding and development costs, and even as natural gas volumes in the formation are expected to surpass 16 Bcf/d this month, exploration and production (E&P) companies are bent on getting more for less.
The technological and operational gains the play has witnessed in recent years have come not only at the drillbit, but above the surface as well.
Drilling efficiencies, better completions, cost reductions and streamlined operations have aligned behind the headlines of the nation's largest producing gasformation. But further innovations, representatives from two of the play's leading operators say, will continue to drive growth into the formation's marginal areas and help recreate the Pennsylvania story in developing horizons, such as the Upper Devonian and Utica shales....
Geosteering, fracture and completion design, cluster spacing and longer laterals are a few of the techniques that have reduced Chesapeake's well costs by $1 million in the last year...
...[Drilling and completion] techniques in the Marcellus will continue improving, while the same success is likely to occur in the Utica and Upper Devonian shales in Pennsylvania, albeit at a slower pace as development is only just beginning in those formations.
Cue Ethel Merman. 

Everything's coming up roses for Pennsylvania's shale gas producers, but consider the cumulative impacts of this rosy - perhaps seven decades-long future - on Pennsylvania's landscape, environment, and citizens if the environmental performance of the industry, regulatory oversight, and enforcement are all not drastically improved...


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