shale gas
DoA,
my comments don't really run counter to SLB's white paper. SLB (and anybody else that can) want to develop technology which gives them a competitive advantage to the mom & pop operations. That technology tends to be expensive but if it increases the return to the resource owner or cuts down on the number of holes that the owner is paying for then SLB can argue that their services are cheaper.
The business about fracturing (part of stimulation, not completion, in spite of what the document says) is exactly why gas shales are cheap to produce. Anybody with enough money/credit to buy a high-pressure pump and some tanks can pump a few 100k to a few million gallons of pond water down the hole can stimulate a gas shale reservoir. A surprising number of people have that kind of money. Amongst that crowd Tesco is actually on the large side.
I would not be surprised if any given shale gas well undergoes a rapid decline from the initial production rate; however, there is a difference between decline and depletion. A poorly completed and stimulated well is likely to have a shorter life; however, i do not think that is what Sutherlin was refering to.
Your last quote exemplifies my analogy to the CA gold rush, e.g. rather than spending money to develop the resource for maximum production, many owners and service providers go for the quick hit.
I've forgotten the percentage of horizontal wells vs vertical but I believe almost all shale gas wells are now horizontal. Horizontal wells present some problems for logging but for many folks that just meant they'd save some money and not log the wells. This undoubtedly contributed to a lot of uneconomic wells being drilled but until the last year or so that didn't matter much to many resource owners.
Low NG prices, environmental concerns, and current credit situation are all conspiring to make life hard on the smaller shale gas development companies.
regards,
Charlie
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