Engineers enhance value in a prolific gas/liquids province
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The American oil and gas story is filled with examples of remarkable resilience. For decades, industry leaders have found innovative ways to lead their companies through commodity cycles and past technological limitations. After every challenge, the industry has emerged in a position of strength.
Today's Appalachian producers are no exception. It only took them four years to unlock one of the world's largest natural gas reservoirs. Since 2010, Marcellus natural gas production has grown from 2 Bcf/d to more than 16.5 Bcf/d and Utica production has increased 12-fold. The region now accounts for almost 20% of the natural gas production in the lower 48 U.S. states. And in the face of declining natural gas prices, producers have slashed breakeven costs in half by constantly evolving the technologies and strategies behind drilling and completions.
Innovation and collaboration are key to remaining successful in the prolific Marcellus and Utica formations. At DUG East, you'll connect with over 3,100 oil and gas professionals, 20+ executive-level speakers and over 320 exhibitors for two days of in-depth discussions on how to continue to improve operational efficiencies. Click here to learn more about why you can't afford to miss this essential industry gathering.
Bakken Continues Decline While Operators Remain Strong The Bakken Shale is alive and still kicking, but production continues to slow.
While oil production and rigs continue to decline in the Williston Basin of North Dakota, some companies, such as QEP Resources Inc. (NYSE: QEP) have shown impressive results in the play. At the same time, the backlog of drilled, but uncompleted (DUC) wells in the state continues to loom—which could generate financial headaches at current commodity prices.
Oil production in North Dakota declined 1% in February by 14,100 barrels a day (bbl/d), to 1.18 MMbbl/d. That was the second month in a row that production fell, which is uncommon, said Lynn Helms, director of North Dakota’s Department of Mineral Resources (NDIC).
The last time production fell in consecutive months was four years ago, Helms said.
E&Ps Balance Innovation, Costs But Liquidity, Leverage Matter Most Recently, Pioneer Natural Resources Co. (NYSE: PXD) has been using dissolvable plugs in Permian Basin wells.
In the Eagle Ford, such plugs dissolve in about 17 hours, eliminating the need for coil tubing to drill them out.
The ground beneath the Permian, though, is about 150 degrees cooler and the plugs take significantly more time to dissolve. They will have to be modified before they represent a repeatable improvement.
In a $50 per barrel WTI world, E&P companies have set about making efficiency and expense-reduction initiatives a priority.
While such measure are worthwhile, for all the effort on innovation none trump the most meaningful value drivers: liquidity, leverage and hedging and growth prospects, said Eric Otto, analyst, CLSA.