Shale drillers are only capturing a fraction of the oil potential in wells

Fuel Fix:

Environmentalists want oil companies to leave fossil fuels in the ground. To a large extent, they already have.

U.S. shale drillers have created the nation’s biggest oil and gas boom in four decades and the amount of fuel extracted from U.S. shale rocks lags behind only three nations — Saudi Arabia, Russia and the United States.

Yet the individual wells they drill only drain a quarter of the natural gas and less than 10 percent of the oil buried in the once-inaccessible shale and other tight rocks.

“It’s criminal the amount of oil and gas we’re leaving behind,” said Hans-Christian Freitag, vice president of integrated technology at Baker Hughes, during a panel on the third day of IHS Energy CERAWeek in downtown Houston.

Freitag blamed the shale industry’s so-called manufacturing process of shale drilling. The way shale-oil producers approach an oil field is this: to get a constant rising flow of oil and gas out of rapidly declining shale wells, they need to drill up several similar wells in a short period of time. It’s a rapid-fire, repeatable process.

But 70 percent of unconventional wells don’t reach their production targets, and 30 percent of all perforation clusters aren’t yielding as much oil or gas as they should, Freitag said.

“Anybody here in the room own a factory that has this kind of performance?” he said. “When oil prices were in the $100 range, we were insulated from that.”

He said the industry has probably almost exhausted the advancements it can make in terms of drilling speed and efficiency, but the wells could be a lot more productive.
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What this means is there is potential for even greater production from existing wells if the technology is found to capture it.  That is more bad news for OPEC.