E&P Emphasis Is Now on the P

Images courtesy of Todd Hoffman, Montana Tech University.
Flaring has changed the look of North Dakota and south Texas from space, adding bright spots where there was largely darkness in 2003. In 2012, 80 Bcf of gas was flared in North Dakota and 50 Bcf was flared in Texas, according to the US Energy Information Administration.

The focus in unconventional exploration and production is shifting to maximizing production. “The next big play is getting more out of what you have,” said Jay Ottoson, president and chief operating officer for SM Energy, at the recent Unconventional Resources Technology Conference in Denver.

The math is simple. Adding one percentage point to recoveries from the top unconventional formations for oil and gas in the United States will add billions of billions of barrels of oil production and tens of trillions of cubic feet of gas, he said.

There is plenty of room for improvement. The examples offered by Ottoson would increase the ultimate recovery rate in the biggest US oil plays from 5% to 6%. Comments by others during the conference, a joint project of SPE, AAPG, and SEG, indicated that range is not uncommon as companies look for ways to do better.

Even at those levels, the growing flow of oil and gas from these extensive formations has pushed the US up toward the top of the list of the world’s producers. Scott Key, chief executive officer of IHS, said that in a few years, the United States will again emerge as the world’s largest producer of oil and gas.

The production increase has been enough to boost the growth rate of the US economy, turning it into the low-cost producer in refining and chemical making and soon an exporter of liquefied natural gas, Key said.

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E&P Emphasis Is Now on the P

Stephen Rassenfoss, JPT Emerging Technology Senior Editor

01 October 2014

Volume: 66 | Issue: 10