Horizontal wells continue to increase well costs! According to the Daily Oil Bulletin, the first three months of 2011 required more days to drill a well in Western Canada compared to any other winter since 1990.
Despite the efficiencies gained from modern drilling rigs, the increased cost arises from:
Complex well geometries
Greater lengths and depths
Increased fracture/treatment intervals
Due to these factors, Canada’s contractors required more days drilled, resulting in an increase of 27% from the same time the previous year. This was the highest level since the boom in the winter of 2006, when the industry activity spiked with abnormally high natural gas prices.
In the Western Canadian Sedimentary Basin (WCSB):
Average well took on average 12.6 days to drill
Deeper parts of the WCSB average more than 25.0 days
Wells averaged 2,011 meters during the first quarter of 2012, up from 1,717 meters in the first quarter of 2011
A case example to combat these rising costs is found in the Canadian Bakken formation. It is shallower and thinner than its American cousin in North Dakota. Drilling time and multi-staged fracturing has to be monitored closely.
However, modern technology has alleviated some of the escalating well costs in this area by:
Multiple well pads offer a smaller surface footprint accessing multiple bottom hole locations
Utilizing Rotary Steerable Technology keeps the horizontal well in the target formation
Horizontal Formation Evaluation is used to optimize fracture location/size