Horizontal Wells Increasing Canadian Production
New and improved drilling technology is turning out to be part
of the answer to the emerging natural gas supply squeeze, at least
in Canada. Horizontal wells, developed initially for oil, increase
the accessibility, raise the productivity and cut the overall costs
of tapping gas fields too, says a study by the National Energy
Board, the Oil and Gas Commission of British Columbia and the B.C.
Ministry of Energy.
A technical group came back with encouraging findings from a
review of 248 horizontal wells drilled sideways across B.C. gas
reservoirs that were difficult to tap because they lay in complex,
faulted geological formations.
Among the cases examined, a B.C. gas pool called Midwinter Jean
Marie C was successfully developed with 16 horizontal wells. It was
estimated that it would take 57 conventional, vertical wells to
achieve the same results. The technology effectively achieves
three- to four-fold increases in reserves made available per well.
In Canada, horizontal wells running at times more than 8,000 feet
across gas reservoirs also sharply increase productivity. In the
Midwinter Jean Marie C, seven horizontal wells have accounted for
83% of production while six vertical wells have yielded only 13%.
While each horizontal producer costs more separately, the ability
to improve drilling results with fewer wells that the new
technology makes possible is estimated to reduce overall production
costs by at least 10%.
The technical group also points to other new developments led by
"underbalanced" or "controlled-pressure" drilling. It improves
productivity by replacing the use of heavy fluids to counter
natural underground pressures with closed-loop systems that let gas
flow while wells are being drilled, reducing damage to delicate
geological formations and raising output. The new methods, which
also include coiled tubing systems that work like dentists' drills,
are in increasing use to re-enter reserves rendered uneconomic by
older, cruder methods.
Besides strong gas prices, there are growing pressures across
western Canada - known as "cultural" in the industry - to limit the
volume of wells whenever possible. This pressure front is
especially strong in Alberta, source of about four-fifths of
Canadian gas production. Formerly wide-open plains and foothills
of the Rocky Mountains are filling up with country-residential
districts, outdoor recreation operations, hobby ranches or farms
and touchy environmentalists. The trend is reflected in new,
toughened energy development application guidelines enacted by the
Alberta Energy and Utilities Board. The new rules center on "sour"
gas laced with hydrogen-sulphide, which smells like rotten eggs in
and can be lethal in concentrations of less than 1% of the
atmosphere. About 30% of Alberta gas production is sour, and the
proportion is expected to rise as drilling accelerates in deeper
and foothills regions where geological reservoirs are highly prone
to harbor the impurity. The toughened rules, which follow years of
mounting community pressure including high-profile feuds, do not
prohibit sour gas development. But applications to tap reserves
believed to be hazardous will be designated "non-routine," trigger
scrutiny in expanded detail, and set off "up-front" reviews of
development liable to follow drilling if it succeeds. The
requirements include expanded public consultation. Companies will
obliged to lay out their plans in full and seek agreements with
communities before they can put their cases before the AEUB.
The new system also includes a gas industry counterpart to
Miranda warnings. Companies' mandatory information packages for the
Alberta public must include detailed explanations of the rights of
landowners and other parties affected by projects to protest them
or seek changes before the AEUB, including instructions on how to
contact board personnel.
The Alberta board described the new rules as "the first step in
a staged review of, and improvement to, the facility application
process to balance stakeholder needs." A provincial advisory
committee on public safety and sour gas continues to review the
drilling, development and community relations scene. The EUB set a
target of mid-2001 for additional changes to its development
Gordon Jaremko, Calgary