Monday, April 10, 2017

Choking Back Wells -- A Bit Of Insight -- April 10, 2017

According to Bloomberg:
Natural gas drillers in America’s biggest shale play are getting more bang for their buck than ever before.
Thanks to new pipelines and technological advances, producers in the Northeast can now tailor their output to the rise and fall of gas prices. Production from the region’s Marcellus and Utica basins appears to lag price moves at key regional hub Dominion South by three days.
It was the technology that caught my attention because I've talked often about operators "choking back" production in the Bakken and noting significant changes in production month-over-month even among individual wells. From the article:
... remote-controlled well heads make it possible for explorers to fine-tune output. The developments may help producers prevent another supply glut.

Responsiveness to prices is “just one more lever that the market can pull to make sure things balance ...”
In a matter of weeks, producers “were able to swing from dropping overall production in that area by 1.5 billion cubic feet to bringing it all back online.”
Producers have perfected the art of choking wells, or restricting initial output ...
Computer control of wells has allowed producers to remotely expand or cut production, a practice that used to be done manually by adjusting a well’s diameter.
“Field technology has gotten a lot better and I think the companies have invested a lot in it” since last year’s energy price rout.

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