We can all learn a lesson from independent Southwestern Energy Co. who has a formula for success and is busy working it for all it's worth.

In previous editorials, I have been beating the technology drum every chance I get. And not just to jump on a popular bandwagon. For the past 25 years or so, I have been intimately involved in evaluating innovative technology in the oil and gas industry, and I've developed a simple, yet effective, way to separate the passing fads from the real McCoy. It's no coincidence that it's the same way Hart's panel of experts evaluates the annual Meritorious Engineering Awards, and it consists of four simple criteria:
• Does the idea address a real oil industry problem?
• Does the idea contain innovative applications of technology?
• Does the idea enhance safety, reduce waste or improve the environment?
• Does implementation of the idea improve profitability by increasing revenue, cutting costs or a combination of both?
Accordingly, when I attend a technical conference, I do so in great anticipation that I will learn something new, particularly something that involves the application of technology. This year's SPE Annual Technical Conference and Exhibition didn't let me down.
In Dallas, I was privileged to learn from John Thaeler. John is senior vice president of Seeco, Inc., a wholly owned subsidiary of Southwestern Energy Company. His company conducts natural gas exploration and production activities in the Arkoma Basin, specifically in the Fayetteville Shale Play. This puts him in a small niche of producers who have bet the farm on unconventional gas. Today, unconventional gas can be found in three flavors: coalbed natural gas, tight gas and shale gas. The three plays are different, but share a common thread - all present tough drilling and production problems. That's what makes them unconventional.
Seeco has chosen to become involved in the toughest environment - shale gas. Found in reservoirs 1,000 times tighter than tight gas reservoirs, shale gas defies just about every attempt to produce it economically. However, it has one thing going for it. Experts reckon there's between
500 Tcf and 780 Tcf of the stuff, and it's right in America's back yard. Seeco decided the prize was worth more than a casual look.
Much valuable experience has been gained in shale gas production, chiefly from places like the Barnett Shale in the Fort Worth Basin. Producers there have learned that you'd better do your homework if you expect to be successful. And this means taking advantage of technology to help identify the best drilling locations and to reduce risk.
Thaeler's company has made a hefty investment in the Fayetteville Shale Play, acquiring almost 700,000 acres of undeveloped land together with 125,000 acres in the fairway area of the basin that is held by conventional production. Ranging from 1,500 ft to 6,500 ft (457.5 m to 1,982.5 m) in depth, the play is geologically equivalent to the Barnett. During the first half of 2005, the tab ran up to US $55.3 million just to secure leases and provide capital to drill 30 wells. By the end of July, 51 wells were down in eight separate pilot areas. Forty-one of the wells are already producing, six are in some stage of completion and four are shut-in. Nine of the wells were horizontally drilled.
In case you're wondering how his company is so successful, Thaeler will tell you. It's no secret, he says, "We team up with the right people, to do the right things to the right assets and that adds value." For Seeco, this means taking the time to thoroughly evaluate each pilot well using the latest technology, including dipole shear sonic; fullbore formation microimager; elemental capture spectroscopy; and fast, accurate formation pressure measurements. It means stimulating the pay zones with polymer-free fluids and ensuring uniform proppant distribution and carefully measuring hydraulic fracture geometry. And it means effective reservoir management using the latest simulators and integrated workflow tools
to manage the reservoir through its life cycle.
This technology is not cheap. Yet it provides the detailed information needed to make the right decisions. Using this technology, Seeco reckons to produce between 1.3 Bcf and 1.7 Bcf per well, and it will drill as many as 200 of them in 2006, most horizontal.
Nothing worthwhile is free. But in recognizing and applying the right technology, and employing people with plenty of vision and determination, Seeco is adding considerable value to its production base, proving the old saying, "You get what you pay for." Not a bad formula.

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