G. Alan Petzet
Exploration Editor
Drilling in the U.S. will increase slightly, this year.
Prices of natural gas at the wellhead are sustaining gas drilling in spite of another heating season that began wanner than normal.
Oil price deterioration since late fourth quarter 1993 hasn't hurt most drilling plans yet but could limit implementation of marginally economic projects.
OGJ believes operators will receive $80.766 million in wellhead revenues for oil and gas in 1994, up 6.25% from 1993. A slightly lower reinvestment ratio is expected this year.
Major oil companies surveyed by the Journal indicated that as a group they plan to be operator of record on about 17.5% more new wells than they were in 1993. Peaking through that gain was a 50% year to year increase in Gulf of Mexico drilling.
Aggressive, multiwell programs are under way in a few areas, but most drilling is being conducted at a measured pace with few equipment and manpower shortages coming to light.
The same cannot be said for Canada, where operators set modem records in 1993 and made horizontal wells a significant percentage of total drilling. Most forecasters expect companies to maintain 1993's drilling pace this year.
Here are highlights of Oil & Gas Journal's early year drilling forecast for 1994:
- Operators will drill 26,840 wells, compared with an estimated 25,850 wells drilled in 1993.
- The active rotary rig count will average 810, up from 756 in 1993.
- Operators will drill about 4,170 wildcats, up 5.3% from the 1993 estimate.
- The surveyed group of major operators will drill 2,615 wells, up from 2,226 wells they said they drilled in 1993.
- Drilling by all operators in western Canada will total 11,128 wells, compared with 9,740 last year.
OFFSHORE PLANS
Operators are increasing drilling in the Gulf of Mexico and relaxing activity off California.
Gulf of Mexico activity is particularly brisk, and drilling is occurring in all water depth ranges. Minerals Management Service has leased more than 150 deepwater tracts since 1990, and one pipeline company has said it expects another 15 20 Flex Trend discoveries to be announced by yearend 1995.
Chevron Corp. plans to drill four eastern gulf wildcats this year in addition to one on Destin Dome Block 97 off Pensacola, Fla. The company in late 1993 completed two more high flowing gas wells off Mississippi from producing depths of 21,000 ft to more than 22,000 ft.
Fewer wells are to be drilled off California, with 21 completions expected this year.
LAND DRILLING
Nearly every U.S. producing area is alive with plays that are sustaining drilling, albeit at measured rates.
A strong increase is forecast in Southeast New Mexico, where several oil plays are fueling activity.
Higher completion numbers are expected in all Texas Railroad Commission districts except 1 (South) and 7C (West Central).
The Journal expects a slight gain in Kansas to 2,418 wells in 1994 and a small drop in Oklahoma to 2,590 wells.
Drilling levels are expected to remain high in Colorado's giant Wattenberg field. One program calls for Snyder Oil Corp. to drill on some 1,800 potential locations in the field during 6 years under an agreement with Union Pacific Resources Co. Snyder committed to drill at least 300 wells the first 3 years.
Total drilling may decline in Alaska but will remain at well over 100 wells/year, OGJ predicts.
Sonat Exploration Co., Houston, plans to drill 70 or more wells by mid-1994 on South Texas leases with estimated reserves of 90 bcf of gas equivalent acquired in late 1993 from Tri C Resources Inc., Houston. The properties are mostly in Webb and Duval counties.
CANADA'S OUTLOOK
Canadian industry watchers are exhausting superlatives to describe 1993 and expect a robust drilling year in 1994.
Rig utilization pushed 90% as the New Year began, and service and equipment shortages were being reported.
OGJ estimates that nearly 10% of the wells drilled in western Canada in 1993 will have been horizontal wells.
A tax holiday in Alberta and gas drilling in Northeast British Columbia contributed to much of the increased drilling last year.