Friday, January 25, 2019

Pad Drilling -- Update -- January 25, 2019

Re-posting. This is a must-read for those interested in the Bakken.

RBN Energy: part 2, will large-scale pad drilling buoy crude output?  An incredibly good article. I was surprised that the Bakken was not mentioned, unless I missed it.
When crude oil prices crashed in the second half of 2014 and 2015, producers survived by becoming leaner and more efficient. That transition included drastic reductions in the rates paid to services companies while wringing ever more oil and gas out of each well and, in the process, permanently altering the economics of drilling and completion. This year, producers are again facing a lower-price environment; since early October (2018), crude prices have dropped more than 30%. In the current, more conservative investment environment, can producers do it again? Can additional value be squeezed out with bigger well pads and longer laterals? Today, we continue a series exploring the benefits and risks of these highly concentrated and highly complicated operations. 
Earlier we explored the origins of pad drilling and the factors that catalyzed its widespread adoption across the oil patch. By splitting the substantial infrastructure, logistical, and rig-mobilization costs among multiple wells, pad drilling helped improve efficiency the last time crude prices dropped. That blog’s focus was on Northeast gas producers. Now we turn our attention to the crude-focused Permian. We’ll start with a look at a “mega-pad” with more than 60 wells and a couple of somewhat smaller pads, then conclude with a high-level analysis of the pros and cons of “going big.”
Archived. Episode 1 was also archived.
It seems the writer hints at the halo effect but not fully developed. 

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