The “shale gale” is not all about natural gas. While US shale gas drilling continues, it now is primarily to hold acreage and build gas reserves. As illustrated in Fig. 1, there is a definite trend in the US away from natural gas to crude oil. Many companies have pulled rigs from development drilling in gas shales to explore wet gas and oil-bearing shale plays. Lured by the prospect of high-value oil, whose margins promise a much higher return than those for natural gas, shale oil in US plays like the Bakken, Eagle Ford, Niobrara, Leonard (or Avalon), and Monterey is being extracted from low-permeability rock in increasing quantities.
For example, while 33 permits were issued in 2008 for drilling in the Eagle Ford Shale, for the first 11 months of 2010, 1,018 permits were issued. Oil and condensate production has also sharply increased in the Eagle Ford, from a combined 0.8 million bbl in 2009 to roughly 3.9 million bbl in the first 10 months of 2010. A recent study—“The Economic Impact of the Eagle Ford Shale,” prepared by the Center for Community and Business Research, University of Texas at San Antonio—forecasts annual Eagle Ford oil production at 15 million bbl for this year, rising consistently until 2020, when it is projected to reach 111.5 million bbl.
In 2008, the US Geological Survey estimated that the US portion of the Bakken formation contains between 3 billion and 4.3 billion bbl (a mean of 3.63 billion bbl) of undiscovered, recoverable oil, ranking it among the largest US oil plays ever. Production in 2009 reached nearly 8 million bbl per month from roughly 4,500 producing wells. Oil production in North Dakota—in the heart of the Bakken—increased from 35 million bbl in 2005 to nearly 80 million bbl in 2009.
Technology Is the Enabler
“The technology drivers that lifted gas recovery from 1% to 50% in the Barnett,” stated Apache global technology consultant George E. King, “will ultimately be the springboard that drives oil recovery from the initial 1% to 1.5% in the Bakken and Eagle Ford oil-producing shales to much higher values.”
Continental Resources, the number one driller and lease holder in the Bakken as of November 2010, with 864,559 net acres, has been driving its production upward with advances in technology. For example, in 2009, it per-formed the first 24-hour continuous hydraulic fracture in the North Dakota portion of the play. In 2010, Continental developed a drilling concept it calls the Eco-Pad, whereby the company drills multiple horizontal wells from a single pad with zero boundary-line setbacks. This concept is expected to reduce drilling and completion costs per well by approximately 10%, with about 70% less surface footprint area than four conventional drilling pads and only one access road.