Lag to 'production effect' seen in Rockies

A substantial lag could occur in Rocky Mountain basins between the time operators idle drilling rigs until flush gas production from newer wells begins to decline, one operator said.

By OGJ editors
HOUSTON, Feb. 17 -- A substantial lag could occur in Rocky Mountain basins between the time operators idle drilling rigs until flush gas production from newer wells begins to decline, one operator said.

Some in the US have forecast that the sharp drop in the rig count since fall 2008 might lead to the completion of fewer new wells, releasing less gas into pipelines and allowing gas prices to strengthen eventually at equivalent demand levels.

Joseph N. Jaggers, president and chief operating officer, Bill Barrett Corp., Denver, said Rocky Mountain gas production could remain strong through 2010.

Jaggers told an early February conference call that the "production effect" could lag the rig count substantially, especially in the Rocky Mountain states even though the rig count there is off by a greater margin than in the US as a whole.

Through January, rig counts in Colorado, New Mexico, Utah, and Wyoming are down 35% from a peak of 339 in the fall of 2008, compared with a drop of 28% nationally.

Much gas development in the Rockies is on pads with as many as 24 wells, Jaggers noted.

It takes a week to demobilize a rig, then 1-2 weeks to build pits for water and move in tanks, and if a frac crew is to run 7 frac stages/well on 20 wells that's 140 stages to be pumped. The crew can pump 5-6 stages/day and is permitted to pump only 5-6 days/week.

That indicates weeks of completion work per pad, implying that it may take the rest of the first quarter to work through the inventory of completion operations from the high rig counts experienced last fall, Jaggers said.

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