[misterno]

Below is the chart that Texas RR commission has presented. If you look at the early 70s versus today, the amount of Natural gas produced is same but the number of wells are like 5 times more today.

Can anyone explain why? Due to the improved technology, shouldn't we have 1/5th instead of 5 times more wells?

http://www.rrc.state.tx.us/data/product ... counts.php

[Cloud9]

Peak Texas NG?

[rockdoc123]

In the past gas production was from conventional reservoirs which have high porosities and permeabilities. A single well was hence capable of 10 to 50 mmcf/d of production. Conventional reservoirs are now either petered out or of high cost due to their depth meaning that gas has to be extracted from tighter resevoirs. These reservoirs whether they be tight sands, siltstones or shales are generally capable of only producing gas in the several mcf/d range even when fraced. As a consequence you need many more of them to get the level of production previously supplied from conventional means.

[copious.abundance]

There are always going to be lots of stripper wells that producers keep running for years, and decades. The more time that passes, the more wells will have been drilled, and the more stripper wells you'll get. You'll notice in your time series that the number of producing gas wells in Texas has almost never declined, and in the occasional year it has, it only declined by a small amount and for a short period of time. That's simply the result of the accumulating numbers of wells that have been drilled. Some wells get retired after a while, but even if, say, only 1/4 of gas wells are still producing 20 years after being drilled, the numbers will still accumulate.

[copious.abundance]

Here's a better way to look at this.

To gage the performance of *new* wells nowadays compared to periods in the past, you need to look at the incremental production of new wells for each time period.

2008-2009:
4,595 new wells
265,608,436 Mcf incremental gas production
= 57,803 Mcf incremental gas production per new well

Then go back to the 70's, when Texas natural gas production was actually declining (even though well counts were increasing):

1976-1977:
3,408 new wells
-143,683,669 Mcf incremental gas production
= -42,160 Mcf incremental gas production per new well

So compared to the 70's, the wells being drilled recently are doing a much better job. Let's go back to the 60's when gas production was going up. 1965-66 seems to have seen a pretty good jump in production, so I'll choose that:

1965-1966:
146 new wells
243,419,420 Mcf incremental gas production
= 1,667,256 Mcf incremental gas production per new well

So it looks like the wells nowadays are accomplishing more compared to the ones drilled in the 70's, but not as much as the wells drilled in the 60's. However, you have to remember that the total incremental gas production number still includes production from stripper wells, and there are considerably more stripper wells nowadays compared to the 60's, so this comparison still isn't totally apples-to-apples. While this is an improvement over looking at gross numbers of wells and production, the proper way to do this would be to compare average EUR's of recently drilled wells (which isn't going to be known with certainty yet, since they're recently drilled) with the EUR's of wells drilled in the 60's and 70's (whose EUR's by now have a higher amount of certainty). I would presume that answering this latter question would be extremely complicated, and have no idea what the answer is. Maybe rockdoc, Maddog or someone else has estimates of those numbers.

[TheDude]

Also the fields in shale/CBM/tight formations have a higher decline rate, thus you need to drill more each year to maintain the same level of production:



Notice that the number of new producers is taking off. For some reason in TX they added 6900 in 1987, which was the previous record for a single year; the average 2006-2008 was 6664. The 3 year moving average topped any historic period starting in 2004; levels close to it were seen in the early 80s.

So compared to the 70's, the wells being drilled recently are doing a much better job.

You pick a single year from the past in which production declined and compare it to a recent one in which it increased and cite this as evidence that current methods are more productive?

Would be more pertinent to use the first column which is dry gas. Here's a chart:



From Energy in the United States: 1635-2000. With an obviously important topic like this someone's inevitably done some of the number crunching. Dunno how things have played out since then.

[copious.abundance]

^
That chart is making the same mistake misterno made: It includes stripper wells. This tells you nothing about the productivity of the new wells. You have to completely isolate the production of the new wells and completely isolate the production of the old wells to get an apples-to-apples comparison.

If you've got, say, 5,000 producing stripper wells in 1970, and 30,000 producing stripper wells in 2009, of course your per-well production in 2009 is going to be lower than in 1970. The low production of the huge number of stripper wells is going to completely overwhelm the production from the new wells, no matter how productive the new wells are.

The only way this would be a valid comparison is if old gas wells were consistently retired at the same rate as new wells were being drilled. Since that does not happen, you simply can't compare gross numbers of wells and production now to the same from 20, 30 and 40 years ago to make any inferences about the productivity of recent drilling. You're comparing apples-to-oranges that way.

[TheDude]

It doesn't include wells that have been P&A, either, as long as we're debating whether to conduct actual analysis, or whether exports are include in production, etc. About 40% of the total was drilled in the last decade; why hasn't current production vastly topped levels achieved with the heritage 23% drilled up to 1964-1974?

That graph originally was published by those amateurs at the EIA, btw.

[misterno]

One more question; since the number of wells increased 5 times, then the costs should have increased 5 times as well, right?

How come this is not reflected in the price of natural gas currently? It is even cheaper now if you adjust it with inflation.

Can someone explain?

[Pops]

Look up "Natural Gas Liquids".

[copious.abundance]

One more question; since the number of wells increased 5 times, then the costs should have increased 5 times as well, right?

Huh? That made no sense. By that logic the price of houses, cars and computers should be going through the roof because there are so many more of them now.



The older wells paid for themselves long ago.

[misterno]

Sorry for not being clear

I meant to ask; howcome we need 5 times more wells to extract the same amount of NG, but the price of NG stays the same or even lower?

Drilling wells is not cheap I assume

[dorlomin]

Because price is determined by supply and demand not cost plus profit. If you are meeting demand and there is scope via LNG to bring in more supply at a key price then you cant charge more for the product or the market will price you out in favour of LNG. The profitability of the tight gas has been hotly contest by some but those near the field seem content it is a profitable venture.

[Maddog78]

The profitability of the tight gas has been hotly contest by some but those near the field seem content it is a profitable venture.

Some who have never seen a n. gas drilling rig apart from the one in my avatar are labelled "experts" on peakoil.com.