By CLIFFORD KRAUSS nytimes.com MAY 11, 2015
KENEDY, Tex. — These are lean days in the South Texas oil patch, with once-bustling roads and hotels now empty as the price of oil has plunged and rig after rig now sitting idle.
Still, production has barely declined, a testament to the rapid gains that oil producers are making in coaxing ever more oil from older wells and the few new wells they are still drilling — and doing both while investing far less money.
The Norwegian oil giant Statoil, for instance, is experimenting here in the Eagle Ford shale field with a host of new drilling tools and techniques.
It is trying out different grades of sand to blast along with water and chemicals to better loosen the hard rock deep underground and increase a well’s production, and varying the depths of wells to squeeze out even more oil. It is using new well chokes that technicians can operate remotely from a computer or even a smartphone to quickly adjust flows to maximize production without overtaxing pipelines.
“There’s a proverb in Norway that says necessity teaches the naked woman how to knit,” said Bjorn Otto Sverdrup, a Statoil vice president, as he and another executive of the Norwegian oil company toured the Eagle Ford shale field the other day.
The knitting is progressing. Even as the company cut the number of rigs it runs here from three to two since last year, it has managed to lift production by one-third, a feat that would have been unimaginable a few years ago.
It has cut the average cost of drilling from $4.5 million to $3.5 million a well, in part by reducing the time it takes to drill from an average of 21 days to 17 through better planning and laying off slower crews.
Statoil’s example is just one of many for an industry reeling from the collapse of oil prices since last summer. Companies have laid off thousands of workers, and some are having trouble paying their debts. They have decommissioned more than half of the country’s oil rig fleet. Companies like Anadarko Petroleum and EOG Resources have drilled hundreds of wells without completing them, saving their expenditures on hydraulic fracturing until the price of oil recovers.
As the price of crude oil fluctuates some companies are faring much better than others.
But a majority of the major companies are managing to survive by increasingly using techniques traditionally more common to manufacturing plants than to oil fields to achieve economies of scale.
In some shale fields where companies typically drill up to eight wells on each production pad, companies are no longer drilling one well at a time. Using rigs that can move on tracks or legs, they are drilling and completing several wells at a time, slashing the time it takes to drill each well.
The result has already been a slower decline in domestic shale oil production than many experts had expected, and the promise of a spike in output if the global market price continues to rise as it has in recent weeks.
The Energy Department still expects the average daily production for the year to be moderately higher than in 2014, rising from 8.7 million barrels a day to 9.2 million.“We can’t control the commodity prices, but we can control the efficiency of our wells,” said Ben Mathis, Statoil’s Eagle Ford operations manager. “The industry has taken this as a wake-up call to get more efficient or get out.”
Using new fiber-optic sensors thousands of feet below the ground, operators are receiving streams of data allowing them to analyze rocks in real time to make quick decisions.
The sensors can determine how far a fracturing job is penetrating hard rocks to plan the spacing of wells more accurately. That way, producers are assured that one well is not draining oil from another and that no significant section of the shale is left untapped.And by keeping track of temperatures, pressure and vibration on equipment that is out of sight, sensors and advanced software can predict when equipment needs servicing before it breaks down.
“You are more efficient because you are forced to be more innovative,” said Patrick Pouyanné, chief executive of Total, the French oil and gas giant. Mr. Pouyanné estimated that the break-even price for operating in 75 percent of the shale oil fields a year ago was $75 a barrel, but that is now down to roughly $60 because of innovation and lower service company costs. He predicted that the break-even cost could go as low as $50 before long.
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