Twelve years of unconventional oil and gas development: production performance and economic analysis

Abstract

Unconventional formations have been actively developed in the US since 2008. However, it is challenging to quantify the impact of technological advancement and geology on production. In addition, the economics of unconventionals is not well-understood. In this paper, we studied five major unconventional formations in the US: the Bakken, Eagleford, Haynesville, Marcellus, and Wolfcamp formations. We used historical data to quantify the impact of technological and geological variations on production. To accomplish this, we identified four phases of unconventional development over the past 12 years during which drilling and completion technology, initial investment, and commodity prices were similar: Phases 1–4. Using statistical analysis, we compared well performance of each phase. Then, we generated type curves for each phase for economic studies. Initial analysis shows that between January 2008 and December 2019, 60,611 horizontal wells were completed in these formations, producing about 8.185 billion barrels of oil, 90 trillion cubic feet of gas, and generating an estimated $816 billion in gross revenue. For the statistical analysis, the level of uncertainty ( $${P}_{10}/{P}_{90}$$ ratio) reduced from Phase 1 to Phase 4 across all formations, suggesting consistent improvements in well productivity over time while county-level analysis shows spatial disparity in well performance. We infer that technology drives temporal changes while geology drives spatial differences in well performance. From economic analysis, Phase 4 type wells had the best production performance, partly, due to improved drilling and completion efficiency. It was also because operators targeted their best acreage to maximize their asset’s potential.