HOW INNOVATION HAS TRANSFORMED
OIL AND GAS EXPLORATION AND PRODUCTION
Improvements Expand Reserves – and Slash the Cost of Finding Them
Bayou City Exploration benefits significantly from innovations in gas and oil exploration and production technologies and techniques that enable the industry to target higher-quality prospects and improve success rates by as much as 50 percent or more. Historically, new field wildcat exploration has succeeded at a rate of one productive well for every five to 10 wells drilled. Today, advances in technology have enabled:
- fewer wells being drilled to find a given target.
- fewer dry holes.
- increased production per well, in some cases by 100 percent.
- enhanced worker safety, habitat protection and, with fewer wells drills, lower and less-toxic volumes of waste.
Exploration techniques have progressed from surface observation and divining rods to the use of
satellites, microprocessors, remote sensing, 3-D seismic and 4-D time-lapse imaging of subsurface reservoirs and formations. Improved computer-processing technology and interpretation software allow older seismic data to be reprocessed and revaluated to give a clearer picture of the subsurface.
Drilling and Completion Innovations
New techniques for sidetrack drilling, drilling a lateral extension from an existing well bore, and deeper drilling from existing wells can allow some of resources identified by 3-D seismic and 4-D imaging to be developed without drilling new wells or disturbing previously undisturbed areas.
Drilling and completion technology has advanced from gravity-driven cable tools in vertical wells to top-drive rotary rigs, coiled tubing units, advanced drilling fluids, and systems that monitor well bore conditions during drilling operations. Directional and horizontal drilling, for example:
- reaches previously inaccessible resources and enables drilling in deeper, offshore waters.
- let us tap smaller accumulations once thought to be uneconomic and produce them profitably.
- allow us to tap fields under wetlands or cities without disruption of the surface.
Dramatic Reserve Expansion
These and many other advanced technologies have helped to literally redefine reserves, with estimates of natural gas reserves alone three to five time greater than they were 30 years ago. The industry's track record in effectively extracting additional resources from previously discovered, older fields is particularly impressive.
Technology has enabled whole new categories of resources, considered inaccessible just 20 years ago, to be counted as part of the domestic resource base. Furthermore, technology improvements have slashed the average cost of finding oil and gas reserves in the United States from roughly $12 to $16 per BOE* of reserves added in the 1970's and 1980's to $4 to $8 today.
- Since 1990, the vast majority of reserve additions in the United States -- 89 percent of oil reserve additions and 92 percent of gas reserve additions -- have come from finding new reserves in old fields.
- Half these additions are from development-dominated growth (growth from more intensive development within the limits of known reservoirs).
- The balance of these additions comes from more exploration-dominated growth (growth from finding new reservoirs in old fields and in extending the boundaries of oil fields).
- The 1970's consensus of estimates of ultimately recoverable gas resources was on the order of 400 trillion cubic feet (Tcf). Today, adjusting for what has already been produced, estimates range from 1,200 to over 2,000 Tcf.
* Natural gas is converted to "barrels of oil equivalent" on the basis of 0.178 barrels of oil per thousand cubic feet of gas.