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Permian sees the start of a cautious recovery

Rig count and wells drilled are expected to rise this year, but return to pre-downturn activity won’t happen at current operator spending levels By Stephen Whitfield, Associate Editor Like all other US shale basins, activity in the Permian Basin took a significant blow last year amid the oil price crash. But things appear to be looking up, with the International Energy Agency estimating a 5.5 million bbl/day rebound in global oil demand this year and WTI staying above $50/bbl since 7 January. The scene appears set for a recovery in the Permian.  However, the length of the road back to pre-pandemic activity levels is still uncertain. Permian rig count had peaked at 418 the week of 13 March last year, ...

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Exploration boom in Guyana-Suriname: high dollar, high stakes

Giant-sized discoveries and low breakevens continue to fan enthusiasm for this South American basin despite recent disappointments By Stephen Whitfield, Associate Editor Just offshore the countries of Guyana and Suriname is a basin that has become the focal point of a major South American oil boom. With ExxonMobil making 18 discoveries in the Stabroek Block offshore Guyana since 2015 and Total making four discoveries at Block 58 offshore Suriname since January 2020, the area continues to generate significant attention from all stakeholders. For offshore drilling contractors specifically, anticipation is high that this emerging region could help to boost both near-term and long-term rig demand.  The Guyana-Suriname Basin currently has eight active rigs, up from five in 2020. ExxonMobil, the only operator ...

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Automated directional drilling gaining trust among industry users

Innovations in software continue to enable better predictive capabilities, helping operators achieve repeatability and consistency in their wellbores By Stephen Whitfield, Associate Editor Unpredictable directional drilling performance can have a significant detriment on a drilling operation, leading to higher costs and potentially missed production. While many directional drillers perform at a high level, the practice of accurately predicting drill bit positioning and trajectory is difficult to master, and the human element means that failure is always a possibility. To address these issues, the industry has increasingly looked to automation of directional drilling. Repeatability and consistency are recognized as the bedrock of the value around these automated systems.  “Drilling a record one day and then falling behind your expected days on ...

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Better understanding of data, physics key to BHA optimization

Companies realizing that a more holistic approach may be needed to enable precise directional control while optimizing ROP By Stephen Forrester, Contributor In an industry that continues to face financial headwinds, it is more important than ever that drilling is a cost-effective endeavor. Solutions over the past decade have achieved some success in the cost per foot of drilling, but those solutions have often focused on optimizing individual items within a given bottomhole assembly (BHA) – for example, implementing a more powerful motor or a more precise rotary steerable system (RSS). Although such pieces of equipment and technology, when incorporated individually into a BHA, can improve some performance metrics, the current market environment demands more holistic BHA optimization to achieve better ...

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Are electrically powered fleets the future of fracking?

E-frac systems tout emissions reductions and lower costs over time, but higher upfront capital requirements and lead times remain barriers By Stephen Whitfield, Associate Editor As the shale completions industry navigates the current economic and ESG landscape, it continues to be challenged by two significant and growing requirements: to find new cost efficiencies and to reduce its carbon footprint. While there is no magic bullet for either of these challenges, electrically powered fracturing (e-frac) fleets are shaping up to be one solution in the toolbox.  Currently, e-fracs make up only around 10% of the overall US frac market, according to Matthew Moncla, Chief Operating Officer at US Well Services. He estimates there are just 12-13 such fleets currently running in the ...

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With recovery of global economy still uncertain, oilfield services must stay agile, seek new ways to adapt

Forecast for gradual increase in oil demand signals potential for comeback in 2021, but low spending levels likely to plague OFS for at least 3-4 years By Stephen Whitfield, Associate Editor The global economy has been devastated since the World Health Organization (WHO) declared COVID-19 as a global pandemic in March. Financial markets crashed. Governments around the world locked down their countries. Millions of people lost their jobs, and many others have had to deal with disruptions at their work place. The International Monetary Fund (IMF) estimates that the global economy will shrink by 4.9% this year, the worst decline since the Great Depression. Next year, IMF expects the world’s GDP to grow by just 5.4%. That projection is 6.5% ...

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Geothermal energy holds great potential, but technical, regulatory challenges must be overcome

Optimizing development timelines through streamlined environmental review processes could help lower costs, increase available opportunities for drillers By Stephen Whitfield, Associate Editor Last year, the US Department of Energy (DOE) released a report estimating that geothermal electricity generation capacity has the potential to increase to more than 60 GW by 2050. That would be a nearly 2,600% increase over 2019 levels and would represent 8.5% of US energy generation. Clearly, geothermal energy has vast potential as a low-carbon solution, and it utilizes much of the same drilling infrastructure currently used in the oilfield. However, to realize that potential, a significant amount of risk in geothermal development projects must be overcome, in both technical and non-technical aspects, and costs must be ...

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US land drilling faces long road to recovery

Increase in onshore rig count is likely to be minimal next year as E&P companies will remain cash-strapped and favor conservative spending By Stephen Whitfield, Associate Editor Around this time a year ago, US onshore drilling appeared to be in a tough spot, with analysts projecting drops in the rig count and a slowdown in production as operators continued to prioritize cash flow. Still, no one could have predicted the events that followed. The COVID-19 pandemic and the oil price crash threw a significant wrench in nearly every facet of the industry, even more so than the 2014-2015 downturn. Onshore operators responded with massive CAPEX cuts in the first months of the year. Then, largely due to shut-ins and curtailments, ...

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