Pioneering shale gas producers and those following in their footsteps have come a long way in the technology and know-how department. Their growing wisdom has paid off in setting the country on a course for a new peak in gas production, according to Bentek Energy LLC CEO Porter Bennett.
"There are only three years in the country's history when we produced more natural gas than we are right now, 72, 73 and 74," he told attendees at his firm's Benposium in Houston. "If we continue producing at the rate we are now, we're going to set a new all-time level and the notion of peak production is toast. We are probably headed into an era where we're going to see production levels climb. We're going to establish a new peak production level some time in the future, but we have no idea when."
One consequence of the burgeoning efficiency of gas producers is the usual rules for predicting production levels no longer work. While the rig count used to be a proxy for production, it no longer fits the bill. "The models that have been used for years that predict production as a function of drilling rig count are broken and are going to stay broken until a new relationship is established that incorporates the impacts of horizontal drilling and some of the technological innovations that have occurred in the last several years," Bennett said.
Producers are drilling twice the distance they used to in half the time. Lateral lengths have increased by more than 100%. Additionally, producers have added hydraulic fracturing stages to their wells, increasing their ultimate recoveries, he said.
Further, multi-well pads have been an important innovation that allows for 15-20 wells per pad, increasing the ability of producers to ply shale plays while minimizing disruption to the land above.
Producers have been discovering new ways to control the drillbit, too. Technology that allows them to drill down and in an "S" curve allows them to curve their wellbores back to the edge of drilling boundary, allowing them to add frac stages to their laterals.
"That yields an extra several stages," Bennett said. "When you look at it using an average of about 250 MMcf per stage as the incremental production, obviously you've got significantly greater production, which yields a lot of money and increases the return on those wells significantly."
To better control the flow of gas -- and cash -- Bennett said producers are becoming more astute at controlling production from their wells, in some cases to the extent that their production operations look similar to natural gas storage.
"If you can shut in gas in response to prices and bring it back up without damaging your reserves, you've created a storage field, just a different form," he said. "To the degree that that becomes widespread, you end up having a vastly different value to storage around the country, as well as it gives producers a better opportunity to manage their revenues.
"This is not widespread, and I don't want to portray it as a widespread phenomenon; it's not. The point, though, as producers are starting to learn how to do this, they're starting to learn how to create storage in ways and use their volumes in ways that have not been apparent in the past."
Additionally, some producers have been learning how to choke back their wells in order to increase ultimate recoveries, Bennett noted.
"This is another manifestation of producers figuring out how to tweak their operating and development paradigms," he said. "It's also important to note that this really reflects the uncertainty in a sense of the operations. The notion that we know exactly what we're doing in these shales is probably not accurate."
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