Oil & Gas News in USA: Productive horizontal drilling and energy forecasts

Horizontally drilled oil wells among highest-producing wells

Oil wells drilled horizontally through hydrocarbon-bearing formations are often among the most prolific oil wells in the U.S.A. Although modern horizontal drilling achieved commercial success in 1980s, drilling techniques have improved this years, so in recent years, horizontal drilling has become more common.

Geologic formations are almost always much greater in horizontal extent than they are in vertical thickness. For this reason, more oil-bearing rock is exposed for production in horizontal drilling  than the in vertical drilling. Horizontal wells are often completed in combination with hydraulic fracturing to maximize production along the exposed rock formations.

In 2015 nearly 76 percent of the most productive U.S.A oil wells, or those producing more than 400 barrels of oil equivalent (BOE) per day, were horizontally drilled wells. For about 85,000 moderate rate wells producing in 2015, defined here as more than 15 BOE per day and up to 400 BOE per day, 42 percent were drilled horizontally. Of the approximately 370,000 lowest-rate, marginal oil wells in 2015, also known as stripper wells, only about 2 percent were horizontal wells.

EIA forecasts $51 per barrel 2017 Brent crude oil price

The EIA Short-Term Energy Outlook (STEO) released on November 8 forecasts that North Sea Brent crude oil prices will average $43 per barrel (b) in 2016 and $51/b in 2017. The EIA expects that West Texas Intermediate (WTI) prices will average $43/b in 2016 and $50/b in 2017.

The values of futures and options contracts indicate significant uncertainty in the price outlook, with NYMEX contract values for April 2017 delivery traded during the five-day period ending November 3 suggesting that a range from $36/b to $67/b encompasses the market expectation of WTI prices in February 2017 with 95 percent confidence. The 95 percent confidence interval for market expectations widens over time, with lower and upper limits of $28/b and $95/b for prices in December 2017.

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