Potential for Horizontal-Well Technology in the U.S.

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Summary Application of horizontal wells has increased tremendously and had significant and positive results in the U.S. over the past decade. The pace of horizontal drilling for oil has remained high since 1990 (approximately 600 to 1,000 wells/yr). Most of these wells have been drilled in three formations: the Austin chalk in Texas (79%), the Bakken shale in North Dakota (5%), and the Niobrara in Colorado and Wyoming (2%). Wells drilled in other formations constitute approximately 14%. The Dept. of Energy Natl. Petroleum Technology Office (DOE/NPTO), working closely with industry, developed a unique analytical system (including models and database) to assess the potential for wider application of this technology to the balance of remaining U.S. oil resources across a variety of formations. The findings of the DOE effort are the primary scope of this paper. Introduction The DOE/NPTO developed a comprehensive analytical system for evaluation of horizontal-well potential in the lower 48 U.S. states. The system is intended for use in association with other improved-oil-recovery methods that make up the DOE's Total Oil Recovery Information System (TORIS). The Natl. Petroleum Council initially developed the TORIS system in 1984 for its nationwide enhanced-oil-recovery assessment. Since 1984, the DOE/NPTO has maintained and operated the system as a planning and analysis tool to address important policy issues regarding R&D, economic incentives, and environmental regulations for the U.S. Congress, state and federal government agencies, industry associations, and U.S. oil and gas operators. In 1997, the DOE/NPTO worked very closely with a coalition of industry representatives to identify the target resource for horizontal-well technology and evaluate its future recovery potential under several economic and technological scenarios. The industry coalition included representatives from majors and independent producers, service companies, and industry associations. This paper first gives a brief overview of horizontal-well activities to date, then focuses on the approach, method, and rationale for the analytical system. In addition, the paper provides a national summary of additional production and reserves possible with more-diverse application of horizontal wells in various types of U.S. oil resources. This includes the balance of naturally fractured reservoirs in the Austin chalk, other fractured reservoirs in the north and northwestern states, thin-bed reservoirs, and mature waterflood fields to improve sweep efficiency by means of injection-profile modification or horizontal infill wells. All results are presented in terms of production, reserves, and national economic benefits, with full cash-flow analysis at oil prices in the U.S. $16 to $24/bbl range. Scope of the Analysis Since 1990, the pace of drilling horizontal oil wells has remained high at approximately 600 to 1,000 wells/yr (Fig. 1).* The greatest use of horizontal wells in the lower 48 states, however, has been for development of naturally fractured reservoirs, particularly those in the prolific Austin chalk (Fig. 2).*,1 These reservoirs often consist of "compartments" that are long and parallel or subparallel to natural vertical fractures from which oil or gas can be produced. Vertical wells drilled into these compartments have limited chance of success because it is unlikely that the well will penetrate more than one or two compartments. Horizontal wells, on the other hand, can be drilled several thousands of feet laterally through the formation to connect multiple fractures or compartments to the wellbore, greatly improving the chance of achieving commercial oil or gas production. Moreover, horizontal wells have the ability to produce at relatively high rates with low pressure differential between the reservoir and the well. These factors, along with favorable geometry, make horizontal wells very attractive for application in reservoirs with water- and gas-coning problems. Approximately one-third of horizontal wells in the U.S. have been drilled to minimize coning.2 With continued and steady development of horizontal-drilling technology and development of more-effective diagnostic tools, we envision that application of horizontal wells will become more diverse, particularly in the following areas.Thin-Bed Reservoirs. Horizontal wells can be highly beneficial in development of thin-bed reservoirs (less than 25 ft of net pay) or marginally productive reservoirs (low permeability or porosity). The increased wellbore exposure in these reservoirs results in much higher well productivity with horizontal wells compared with that of vertical wells, making production at economical rates possible.3Injection-Profile Modification. Horizontal wells also can be used to improve volumetric sweep efficiency in new or existing waterfloods with poor injection profiles. Horizontal drilling can be used to place laterals from vertical injectors into zones of lower injectivity, which allows water to enter these zones more easily and to displace and produce a significant volume of oil that might have remained unrecovered otherwise.