A question to anyone with some insight.
At least in Texas, the geographic areas garnering the most attention in terms of new drilling these days are in the "oily" shales. These have a well recognized decline curve which can be quite steep in many if not all cases. Yet the producers are still drilling them, so they must have an economic upside. My question is (for the average producer), after the steep decline and production levels out, what is the most likely fate of these horizontal oil shale wells?
Options include:
Ride the production out to the end whare it is no longer economically viable?
Rework or refrac to boost production?
Add more drilling sites within the tract (more verticals and or horizontals)?
Sell the interests to an O and G superpower (Exxon, Mobil, Texaco) and let them redevelop it?
Some other strategy?
Just curious what is the odds on favorite of where these hoizontals go after the decline. Thanks for your input.
G Allen
All of the above, except production tends to go to smaller players after the initial rush.
I think you have a good grasp of the situation but I am dubious about refracking a long lateral to greatly increase oil production unless the original completion was severely inadequate. I think for oil production a new well would give more bang for the buck. Gas can be a different story.
I think the biggs do buy up producing acres to add to reserves, I have such acres that have passed from Continental to Conoco, and Conoco just sits on them with the single wells that were not completed with the best practices of today and which I think could support at least two more wells in each space. Half of the wells recently had pumps installed after 4 years and the other half are going on 5 years with no pumps. These acres are obviously on the shelf. I would agree that in the absence of great future potential, the well and or spacing will pass to the hands of a smaller entity.