The Efficiency Of U.S. Shale Oil Drilling And Production

In my recent Oil Production Vital Statistics post, commenter rjsigmund posted a link to this EIA update on shale oil production efficiency, which in my opinion contains some astonishing data on how the industry has drilled better and better wells, year on year, for a decade. US production is heading higher. At the same time, turbulence has gripped the global oil market, sending Brent above $77 / barrel as fresh sanctions loom for Iran and Venezuelan production continues to free fall.

First, a very brief update on what we mean by shale oil and how it is produced. Oil and gas are formed in the Earth’s crust when organic rich source rocks become deeply buried (>3000 m depth), heated (>100˚C) and squeezed. Some of this oil escapes from the source rock and migrates upwards, where some of it is trapped in porous sandstones or limestones. This conventional oil or gas was accessed for decades using vertical or sub-vertical wells (Figure 1), and would flow freely to surface under its own buoyancy pressure.

In “shale oil” (also known as light tight oil, LTO), it is the low permeability source rocks themselves that are the drilling target. Oil does not flow freely for these rocks, and requires the assistance of hydraulic fracturing (fracking). The default operational mode is to drill a long horizontal well, fracture it and pump it full of proppant (normally sand) that keeps the fractures open, allowing the oil or gas to flow out…

 

 

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