By OGJ editors
HOUSTON, June 27 -- The trends of declining natural gas well productivity and reserves-to-well ratios are expected to continue through 2015 across all 50 gas basins in the US and Canada, Cambridge Energy Research Associates and IHS reported.
Continued strong market prices will be necessary to motivate enough drilling simply to maintain production on a flat trajectory, said the study, now in its second phase.
In recent years gas production has been buoyed by a shift toward more emphasis on drilling unconventional gas resources such as coalbed methane, gas shale, and tight sandstone.
Study coauthor Robert Ineson, CERA director of North American gas research, said the unconventional gas production stems from "the clear inability of conventional gas resources to keep pace with gas consumption."
Unconventional gas provides solid supply options for several more years, he said. Producers must develop unconventional plays in a cost-effective manner so that gas can compete economically with imported LNG, coal, and other technologies.
"With unconventional resources dominating production trends in the next decade, the performance of existing and emerging unconventional plays will define the long-run supply curve for indigenous North American natural gas supply," Ineson said.
Analysts used a gas price of $4-10/Mcf looking out to 2015 to examine the interplay of future gas production costs, the geological potential in the US and Canada, and how gas supply could build at higher market prices.
The most significant driver of rising gas production costs has been and will continue to be declining production on a per-well basis, not costs for equipment, although equipment costs could push a region to an unprofitable position, the study said.
Of the 15 basins having the largest forecast capacity increases from 2005 to 2010, 12 are primarily unconventional resources, the study said.
