A U.S. Department of Energy-funded technology that could change the way oil and gas wells are drilled has been successfully tested in the Midcontinent.

A hybrid "microhole" coiled-tubing rig recently drilled 25 test wells to penetrate the Niobrara gas formation in western Kansas and eastern Colorado. Cost savings were 25% to 35% per well drilled, compared with the cost of using conventional drilling equipment, the DOE reports.

As a result, about 1 trillion cubic feet of shallow gas that had been bypassed by conventional drilling has now been made economic, according to the DOE. The figure is 5% of annual U.S. natural gas consumption.

"While coiled-tubing rigs are used frequently to service or stimulate production in problematic oil and natural gas wells, operators have only recently begun drilling more 'grassroots' exploratory and development wells with them," the DOE reports. "And that effort has largely been limited to higher-cost operating areas such as Alaska and Canada."

The commercial Niobrara drilling program, in which 3,000-foot wells were drilled in as few as 19 hours from rig move-in to move-out, followed a DOE-funded research project by Gas Technology Institute. In that, GTI and two small firms-Yuma, Colorado-based Advanced Drilling Technology LLC and Dallas-based Rosewood Resources Inc.-adapted a conventional coiled-tubing rig for exploratory and development wells with ultra-small diameters.

"Microhole coiled tubing drilling technology has the kind of game-changing potential that could be applied to bypassed resources in thousands of oil and natural gas reservoirs across the nation, particularly for shallow reservoirs in mature or even apparently depleted fields," the DOE concludes.

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