G. Alan Petzet
Exploration Editor
U.S. well completions in 1991 will increase about 8% compared with 1990 if operators stick with present spending plans during the second half.
Operators are expected to realize $76.4 billion in wellhead revenues this year, 10.7% less than the 1990 estimate. However, they are expected to invest a larger share of those revenues in drilling this year than they did in 1990.
With less than half the year remaining, here is Oil & Gas Journal's updated look at 1991 U.S. drilling:
- The rotary rig count will average 1,050, up from last year's average of 1,010.
- Operators will drill about 31,654 oil wells, gas wells, and dry holes, compared with an estimated 29,170 drilled in 1990.
- Exploratory drilling will decline to 5,711 wildcats.
- Total footage drilled will exceed 152 million ft of hole; average well depth is expected to be about 4,805 ft.
- Major oil companies drilled 2,602 wells in the U.S. during first half 1991 and plan to drill 2,569 the rest of this year.
Meanwhile, drilling in western Canada will likely total 5,900 wells this year.
BEHIND THE STATISTICS
The lowest field prices for gas since the onset of decontrol in the late 1970s, a major relaxation in coalbed methane drilling, and a decline in horizontal drilling are affecting U.S. activity this year.
Drilling for coalbed methane is off sharply this year from the flurry of wells drilled during 1990, estimated by one company at 3,600 (OGJ, May 20, p. 32).
That study, by Ammonite Resources, New Canaan, Conn., predicted that a further 4,100 coalbed methane wells will be drilled in the Black Warrior basin, 2,500 in the San Juan basin, 750 in the Appalachian basin, and 100-400 each in Southeast Kansas and the Raton, Powder River, Green River, and Piceance basins and western Washington during 1992-94.
Horizontal drilling continues to swell footage figures in the few areas in which it is a significant percentage of all drilling.
For instance, the 710 wells reported as completed in South Texas Dist. 1 during 1990 averaged 6,533 ft in depth. Of those wells, 221 in Frio County averaged 8,035 ft in depth, and 67 in Dimmit County averaged 7,867 ft in depth, Petroleum Information figures showed.
At midyear 1991, the rig count was declining in Dist. 1 as horizontal drilling eased in the Pearsall field area. However, rig counts were rising to the east in Dists. 2 and 3 due to several factors, including the eastward movement of horizontal drilling to Upper Cretaceous Austin chalk.
WHERE IT'S HAPPENING
Drilling is expected to pick up somewhat during second half 1991 as several companies have increased spending plans late in the first half.
OGJ estimates that 16,168 wells will be drilled in the second half, up from 15,486 wells in the first half.
New Mexico and Alabama are returning to more historic drilling levels after last year's booms in coalbed methane drilling. Operators are completing and connecting hundreds of coal gas wells in those areas this year.
Drilling to Cambrian and Ordovician zones is still building in Alabama north through many of the Appalachian states.
Operators are likely to drill more than 4,000 wells in Oklahoma and 2,500 in Kansas this year.
No relief is expected from historically low drilling levels in Pennsylvania, where OGJ expects 1,094 wells to be drilled this year.
The Pennsylvania Geological Survey said records for 1,174 wells were submitted during 1990, a 23% drop from 1989 and the smallest number of new wells drilled in the state since 1,156 in 1973.
Exploratory drilling is expected to pick up in eastern Utah.
Leasing has been brisk around a horizontal oil discovery Columbia Gas Development Corp. completed in northern San Juan County, and proposed new gas pipelines are stimulating drilling in Uintah and Grand counties.
SURVEY OF MAJORS
The major oil companies that responded to OGJ's midyear drilling survey will drill most of their 1991 wells in West Texas and the California heavy oil fields, but several other interesting signs are evident in the responses.
Healthy increases are planned in East Texas and the Texas Gulf Coast, some of them driven by tight sands gas and horizontal oil drilling.
The responses also show the majors will drill more wells in the second half than in the first half in several Rocky Mountain states, including North Dakota, Colorado, Utah, and Wyoming.
The majors plan 85 wells, including 28 wildcats, in Colorado for the full year. The state has exploration under way in practically every basin.
The majors said they drilled only 26 wells in the state in the first half.
Drilling offshore and in South Louisiana is poised for a good increase in second half 1991.
Kansas activity by the majors will slow after a strong first half, led by continued infill drilling in Hugoton gas field.
The majors plan three more wildcats in Arkansas in the second half.
CANADIAN OUTLOOK
OGJ estimates operators will drill 4,550 wells in Alberta, 890 in Saskatchewan, and 375 in British Columbia this year.
Light oil drilling has increased in recent months in western Canada, and gas drilling there has waned because of low gas prices.
Canadian gas producers received several encouraging signs during first half 1991 that gas drilling may strengthen during the mid-1990s.
A study prepared for NCE Resources Group took the view that Canadian gas prices at the wellhead might double by 1995 because of falling U.S. supply and increased demand.
The study indicated that the average wellhead price in the U.S. will rise 15%/year in real terms between 1989 and 1995.
That would boost Canadian prices to $3-3.50/Mcf in 1986 dollars by 1995.
An Alberta trade delegation learned that Mexico will not likely compete with Canadian producers for gas sales to the U.S. in the near future.
The delegation said it found that Mexico hopes to import gas for its northern Chihuahua state from Texas in the short term. Mexico is unable to supply that area adequately from its own reserves.
Copyright 1991 Oil & Gas Journal. All Rights Reserved.