Going Long in the Oil Patch: Super extended lateral completions
The recent update of Newfield Exploration Co. Woodford Shale operations cites the use of Super extended lateral (SXL) completions has reduced drill and complete cost while adding incremental reserves. A SXL is a completion with a lateral length greater than 5,000 feet.
When we looked at the Barnett, another shale play, we see a direct correlation between lateral length and ultimate reserves. This is not a big surprise because your exposing more of the reservoir to the well bore. The economics are further enhanced because you only have to drill a single vertical portion of your well to exploit 10,000 feet of shale.
Where as, if you drilled 2 horizontal wells with a 5,000 foot lateral each you would have to pay for 2 vertical portionsto reach your objective. Both scenarios expose the same amount of shale to the well bore, but the second scenario costs more. That's the beauty of a SXL. The same reserves at a lower cost. Newfield reports a $1,000,000 savings when drilling a 10,000 foot lateral vs, two 5,000 foot laterals.
The economic advantages of the SXL can only be realized when you have a contiguous acreage position, or regulatory system that allows placement of a long lateral. The majority of leases or units will not be able to support a SXL. Many states are realizing the benefits to creating a regulatory system that lets companies pool varied interests to form drilling and production units where longer lateral technology can be applied..
When considering SXL completions it is important to note that the cost of mechanical failure rises. This risk varies from play to play but it must be considered. A second risk involves completion of the well bore. Fracing into a fault or a karst that is a conduit to water could endanger production from the entire well bore. A SXL As all shale plays develop, the SXL completions will continue to become more popular because the economics depend on it.
