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  • No Overestimating the Importance of Unconventional Plays

    You can’t overestimate the importance of unconventional plays not only to U.S. drilling and production but also to America’s energy picture. Even as robust oil prices have buoyed U.S. conventional drilling, unconventional rigs have managed to eke out a small gain in market share to 70.7% in 3Q 2011 to date from 69.5% a year ago, according to The Unconventional Drilling Report. It’s clear that unconventional liquids rigs (+48% YOY) are the main driver of the 20% YOY increase in total rig count. Meanwhile, production gains from unconventional drilling have enabled the U.S. to reverse a long decline in U.S. oil and gas output. U.S. crude oil production fell every year since 1985 until 2009’s uptick of 8%, followed by another 2% in 2010. By 2012, EIA estimates total U.S. petroleum liquids production will have risen by more than 1 million barrels per day from 2009. Even with a steep drop in Gulf of Mexico output, EIA predicts U.S. gas production will grow by 4 Bcfd (6.4%) this year and another 1.1 Bcfd in 2012. 

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  • Developments Impact Rigs and Drilling in Texas

    Texas is home to almost half the land-based drilling for oil and gas in the U.S. Moreover, Texas features a broader range of plays and drilling approaches to those plays than any other state.  Given this, The Land Rig Newsletter team recently embarked on a detailed analysis of the trends shaping oil and gas within the state. Two broad themes were investigated: the migration of rigs from east to west and the transfer of technology from unconventional gas to unconventional oil. These developments have had profound impacts on rigs and drilling in the Lone Star state.

     

    Oil’s superior economics spurred a mass migration of rigs. Oil-directed drilling now accounts for more than half the rigs drilling in Texas, up from less than 20% in 2008. Railroad district 8 benefited greatly with an increase of 106 rigs from December 2008 through late May.

     

    Also traveling with the rigs were the newfound tools, skills, and technologies developed in the unconventional gas fields. Key technologies making a difference include horizontal drilling and multistage frac completions. How big was the impact?  In ’08, horizontal drilling represented about 35% of oil and gas drilling in Texas. Today, more than half the wells drilled ...

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