Kemp: Why The Shale Revolution Is Not About To End

Productivity improvements can be traced to several factors. Shale producers are drilling and fracking longer laterals, increasing the amount of shale accessed by each well.

Through a combination of trial-and-error and better seismic work, drillers are increasingly able to target the highest-yielding parts of shale plays, improving average recovery factors and minimising the cost of drilling subpar wells.

Other productivity improvements are in the pipeline. In most sedimentary basins, including North Dakota's Bakken and west Texas's Permian, there are multiple oil- and gas-bearing formations, layered one on top of another like a stack of pancakes. The most advanced drillers are experimenting with wells that have several laterals at different depths to produce from different formations all from the same surface hole.

Well-spacing is another area where improvements are being tried. Minimum spacing is set to ensure two wells do not communicate with one another underground (drain the same part of the formation). But the minimum gap between wells is being reduced to cover the whole shale formation more completely as producers learn more about how big an area each well drains.

Individual shale wells are therefore becoming more productive, and plays are being exploited more efficiently and completely. And there are good reasons to think that the shale revolution is still in its infancy, with scope for further efficiency as current best practice is applied more widely.

There are also plenty of other shale plays in the United States, and internationally, with subtly different geology, which makes them harder to produce at present, but which might be brought into successful production with comparatively minor innovations.

For all these reasons, the shale boom is not about to bust any time soon. As long as the oil is needed, and prices remain fairly high, shale production is set to grow.

(Editing by Dale Hudson)


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