Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

6 Tech Advancements Changing the Fossil Fuels Game

By

Plus, which companies to watch -- and own.

PrintPRINT
Multi-Well-Pad Drilling: Octopus In The House

One of the greatest drilling developments of the last decade is multiple well pads, which some like to refer to as "Octopus" technology.

Imagine gaining access to multiple buried wells at the same time, from a single pad site. This is what "Octopus" technology is doing, first in a canyon in northwestern Colorado in the Piceance Shale Formation and then in the Marcellus shale. It's definitely not your traditional horizontal drilling.

Traditionally, to drill a single well, a company needs a pad or land site for each well drilled. Each of these pads covers an average of seven acres. The Octopus allows for multiple well drilling from a single pad, which can handle between four and 18 wells. So, a single pad on seven acres can now be used to drill on up to 2,000 acres of reserves. More than anything, it means that drilling will be faster, faster, faster … And less expensive in the long run once it renders it unnecessary to break down rigs and put them together again at the next drilling location. It's simple math: four pads usually equals four wells; now one pad can equal between four and 18 wells.

Here's how the technology works: A well pad is set up and the first well is drilled, then the rig literally "crawls" on its hydraulic tentacles to another drill location from the same pad, repeatedly. And it's multi-directional. It takes about two hours between each well drilling. With traditional horizontal drilling methods, it takes about five days to move from pad to pad and start drilling a new well.

Last year, Devon Energy (NYSE:DVN) drilled 36 wells from a single pad site using Octopus technology in the Marcellus Shale. More recently, Encana (NYSE:ECA) drilled 51 wells covering 640 underground acres from a single pad site with a surface area of only 4.6 acres in Colorado. Multi-well pad drilling is also revolutionizing drilling in Bakken, and this is definitely the long-term outlook for shale. It will become the norm.

It's also good (or at least slightly better) news for the environment because it means less drilling disturbance on the surface as we render more of the process underground.

Supercomputing and Seismic Dimensions Einstein Would Appreciate

Oil majors are second only to the US Defense Department in terms of the use of supercomputing systems. That's because supercomputing is the key to determining where to explore next-and to finding the sweet spots based on analog geology.

What these supercomputing systems do is analyze vast amounts of seismic imaging data collected by geologists using sound waves. What's changed most recently is the dimension: When the oil and gas industry first caught on to seismic data collection for exploration efforts, the capabilities were limited to 2-dimensional imaging. Now we have 3-dimensional imaging that tells a much more accurate story.

But it doesn't stop here. There is 4-dimensional imaging as well. What is the fourth dimension, you ask: Time (and Einstein's theory of relativity). This fourth dimension unlocks a variable that allows oil and gas companies not only to determine the geological characteristics of a potential play, but also gives us a look at the how a reservoir is changing LIVE, in real time. The sound waves rumbling through a reservoir predict how its geology is changing over time.

The pioneer of geological supercomputing was MIT, whose post-World War II Whirlwind system was tasked with seismic data processing. Since then, Big Oil has caught on to the potential here and there is no finish line to this race-it's constantly metamorphosing. What would have taken decades with supercomputing technology in the 1990s, now can be accomplished in a matter of weeks.

In this continual evolution, the important thing is how many calculations a computer can make per second and how much data it can store. The fastest computer will get a company to the next drilling hole before its competitors.

We are talking about massive amounts of data from constant signal loops from below the Earth's surface. For example, geologists generate sound waves using explosives or other methods that dig deep into the Earth's surface and then are sample 500 times per second. Only a supercomputer could possibly process all this complex data and make sense of it.

We've moved beyond geographical interpretations, such as pursuing exploration based on geological proximity, like Tullow's (OTCMKTS:TUWLF) Ethiopia play is on trend with its massive Kenya finds. This is child's play. What we're talking about is using supercomputing to tell us that standing in prolific Brazil is pretty much the same as standing in Angola; or that Ghana is analog to French Guiana.

Supercomputing advances remove a great deal of the risk involved in undertaking expensive drilling when you're not sure what's there. Supercomputing essentially puts the idea of peak oil to bed for the foreseeable future.
No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
PrintPRINT

Busy? Subscribe to our free newsletter!

Submit
 

WHAT'S POPULAR IN THE VILLE