Competitive Large Area Oil and Gas Development
Competitive large oil and gas well developments require serious advance planning. What some fail to understand is that many choices can reduce costs dramatically if done before the first well is permitted.
I have seen (and designed) situations where millions of dollars were saved by simply changing the location of production pads and drilling laterals in the opposite direction. This allowed infrastructure power and pipelines to be routed for minimal costs, and AFE savings were up to 8% of the total project costs. It may also allow other choices to reduce operating costs. All these options are opportunistic to the local situation. This type of least-cost analysis has been normal in some companies for many years.
A highly simplified and hypothetical large-area layout is roughly summarized below:
23 pads, 64.5 units of pipeline. Gas plant not included.
An optional layout for the same acreage is summarized below:
13 pads, 41.5 units of pipeline. Gas plant not included.
While roughly the same number of wells and drainage acreage may be installed, the number of pads and lengths of pipelines, roads, and power lines is reduced by at least a third or more.
For such a hypothetical 52-well program, a comparison using equal costs/unit might look like:
Clearly, in a development of numerous long-lateral horizontal wells, the major cost is drilling and completing the wells. However, the pads and infrastructure costs were reduced by 40+% by working with a different geometry. The choices reduced this total project estimate by roughly 5% and brought infrastructure costs (excluding plants) from over 12% to under 8% for the project. Each area will have different costs and opportunities, but this is a reasonable hypothetical case for some shale gas plays.
This type of optimization is not always possible, but if the surface infrastructure is planned in advance of the first pad and well, it may be possible to save millions of dollars on infrastructure. This may open other opportunities to reduce costs. It is this type of advance planning that often separates basin ROI leaders from those who follow.
My experience in the planning, design, construction, and operation of regional oil and gas fields can help operators find savings in not only advance planning (including contracting suppliers, fabricators, and construction), but the detailed design of well-site facilities (including condensate stabilization), disposal facilities, power supply systems, gathering pipelines, safety systems, and trouble-shooting operating systems and equipment.