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'Microhole' Rig Penetrates Dense Niobrara Gas Formation

A hybrid "microhole" coiled tubing rig used on 25 test wells has penetrated a particularly dense Niobrara natural gas chalk formation along the Kansas-Colorado border, delivering 25-35% in cost savings per well and about 1 Tcf of shallow gas that otherwise would have been bypassed by conventional drilling, the Department of Energy (DOE) announced Tuesday.

Coiled tubing rigs frequently are used to service or stimulate production in problematic oil and gas wells, but operators only recently have begun drilling more grassroots exploratory wells with them. Up to now, the effort was mostly limited to higher-cost areas that included Alaska and Canada.

"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 said in a statement.

The commercial Niobrara drilling program, in which 3,000-foot wells were drilled in about 19 hours (from rig move-in to move-out), followed a DOE-funded research project undertaken by Gas Technology Institute (GTI) of Des Plaines, IL. In that effort, GTI partnered with Advanced Drilling Technology LLC (ADT) of Yuma, CO, and Rosewood Resources Inc. of Dallas, to adapt a conventional coiled tubing rig for drilling exploratory wells with ultra-small diameters.

"The results far exceeded expectations, with drilling cost savings averaging 38%," DOE said of the GTI project.

The GTI project received funding from the DOE's Microhole Technology Initiative, which is managed by the Office of Fossil Energy's National Energy Technology Laboratory. The initiative seeks to develop the tools and techniques for drilling ultrasmall boreholes (generally, 1.75-4.5 inches in diameter) and related downhole micro-instrumentation, using coiled tubing drilling rigs that are small and easily transportable.

These rigs, some small enough to mount on a trailer pulled by a standard pickup truck, use solid tubing coiled around a spool on the trailer to drill boreholes with well casing diameters of less than four-and-a-half inches. Such rigs can drill shallow wells quickly, saving substantially on daily rig costs and dramatically improving the economics of drilling.

GTI's microhole project was meant to pioneer the use of an experimental, "built-for-purpose" coiled tubing rig to drill exploratory and development wells with ultrasmall diameters in the Lower 48. ADT and its predecessor Coiled Tubing Solutions Inc. designed and fabricated the rig specifically for microhole coiled tubing drilling to depths up to 5,000 feet. Earlier DOE research had proven this capability to only a few hundred feet.

The project's initial success and strong commercial follow-up also demonstrated the potential for coiled tubing drilling of exploration and development wells in the Lower 48.

For the first time, a Canadian coiled tubing drilling company, Xtreme Coil Drilling Corp. of Calgary, is drilling grassroots wells in the Lower 48 for Anadarko Petroleum Corp., using its patented coiled tubing design to drill wells in the aging, marginally economic, shallow oilfields of Colorado's Denver-Julesburg Basin.

By the end of this year, Xtreme Coil also is expected to deploy its coiled tubing drilling at depths between 10,000-12,000 feet in deep gas fields, including the Pinedale and Jonah in Colorado's Green River Basin, for EnCana Oil & Gas (USA) Inc.

If it also is demonstrated to work for oil recovery, the DOE estimated the volume of bypassed oil in U.S. oilfields at less than 5,000 feet subsurface at more than 218 billion bbl. "Recovering just 10% of this targeted untapped resource equates to an amount equal to 10 years of OPEC oil imports at current rates," the Energy Department stated.

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