North America has become one of the industry’s largest R&D departments when it comes to developing unconventional reserves. Given the vast shale deposits and the availability of crews, the continent has been ripe for rapid technology development.

In a presentation during the North American Prospect Expo’s Business Conference, Jeff Meisenhelder, vice president, unconventional at Schlumberger, said that his “geek panel” would tell the story of how technology created the shale boom. “We’ve been progressing extremely quickly,” Meisenhelder said.

This progression has focused in large part on improving economics through efficiency, he said. Average well costs have dropped from US $7.5 million to $4 million.

Efficiency has been enabled by several technologies, including better metallurgy and modeling techniques for designing drill bits, more efficient motors, and rotary steerable systems. Drilling automation also will be a key enabler, although it is in its early stages of deployment.

Completions technology also has improved with the development of a rupture disk valve, allowing operators to perforate all the way to the toe of the well. The use of this valve saved Cabot Oil and Gas $100,000 per well.

However, Meisenhelder said, the industry needs to concentrate on effectiveness as well as efficiency. He showed a graph of the Barnett shale that clearly indicates when horizontal drilling and multistage fracturing were introduced to the field – productivity skyrocketed. However, there are still wells that are underperforming in these fields, even when the newest technology is applied.

Part of this variation can be attributed to the fact that shales still have their share of challenges. For one thing, they are extremely heterogeneous, with vertical and lateral variations as well as variations in thermal maturity and burial history. These heterogeneities lead to mixed production results, he said.

What is needed, he said, is to use all of the available data – seismic, cores, geochemistry, maturity history, and total organic carbon – and develop a stress model that integrates data and optimizes operations. Otherwise the industry will continue to produce most of its unconventional hydrocarbons from only 70% of the perforated stages.

“You want to engineer your completions to perforate similar types of rocks to get a higher percentage of your perforations producing,” he said, adding that when this integrated approach was used on 50 wells, the operator saw a 33% increase in production over the first three months.

Unconventional plays may be the biggest thing to hit the oil patch in decades, but we are still in experiment mode. Best to accumulate all of the data we can.

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