COLUMN-Shale drillers defy sceptics to win Red Queen's Race:Kemp

Thu Apr 11, 2013 9:08am EDT
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By John Kemp

LONDON, April 11 (Reuters) - Exponential growth in shale oil production must slow because output from fractured wells declines much more rapidly than conventional ones, and because the most productive areas have been drilled first, according to shale sceptics.

Shale production has been likened to Lewis Carroll's Red Queen Race, in which more and more new wells will need to be drilled just to offset rapidly declining output from existing holes, according to one analyst at The Oil Drum ("Is shale oil production from Bakken headed for a run with the Red Queen?" Sep 25, 2012).

"It takes all the running you can do to keep in the same place," the Red Queen warned Alice in "Through the Looking Glass".

But this problem is not new and not unique to shale wells. High initial output followed by a rapid decline and a long taper with many years of low production are a common feature of all oil and gas wells, whether they are drilled vertically or horizontally, conventional or fracked.

Rapid decline rates and the exhaustion of the most productive sweet spots will not constrain shale output any more than they have limited production from conventional oil fields.

Shale sceptics have focused on decline rates, when they should be focusing on the amount of oil and gas ultimately recovered from each well.

Even so, beating the Red Queen is likely to require both continuous efficiency improvements and a substantial increase in the size of the total drilling and fracturing fleet, as well as associated equipment and crews.   Continued...