American Oil and Gas Reporter - January 2017 - 97

Tech Trends
Haynesville as of the end of August.
Blowing down the DUC inventory to
normal levels will add considerable new
oil and gas production, especially considering the potential of increased production per well that will come from improvements in well completions.
Research is leading to major advances
in identifying the most productive areas of
a well to complete as well as in optimizing
frac job design and implementation. Applying these advances to the DUC inventory,
coupled with an estimated 6,000 wells a
year in recompletions using these same
advances, could generate notable increases
in production while keeping the overall
number of new wells relatively flat.

2,000 ft2 Planner Slots for
Enhanced Productivity

R&D Drivers
The advances in technology made over
the past decade are paying off during a
time of volatile commodity prices. In addition, the potential for additional drilling
and completion activity is enhanced by
the results of the 2016 election, and there
is renewed optimism from the industry
and investors for lower regulatory costs,
improved land access, and greater tax
stability. This also may change how the
government views investments for increasing production.
Just as potentially significant is the
Organization of Petroleum Exporting
Countries' agreement to cut production
in concert with key non-OPEC nations.
With global supply and demand already
rebalancing, OPEC's move reasserted the
cartel's historical commitment to managing
oil production and controlling prices. It
remains to be seen how successful the
agreement will be in practice, but at the
very least it signals a major departure
from the strategy OPEC adopted in late
2014 to let the market dictate prices.
Change is again at hand, but the
primary drivers of oil and gas R&D
remain similar to what they were 10
years ago:
* Solving "grand challenges;"
* Gaining competitive advantages;
* Taking advantage of requests for
proposal from outside funding;
* Responding at a corporate or industry-association level to political and
public actions;
* Addressing major events;

Mechanical slot cutting is a novel alternative concept for stimulating low-permeability
reservoirs using a tensioned abrasive cable. The low-cost, environmentally friendly approach is scalable and designed to improve production and reserves recovery. Image
courtesy of Carter Technologies.

* Addressing economic necessities;
and
* Training the next generation.
While these seven drivers remain more
or less constant, it is important to point
out that the investment sources vary for
each driver, and changing political, market
and economic conditions can influence
funding availability dramatically.
Examples of solving grand challenges
include "unlocking the source rock code"
through horizontal drilling and multistage
fracturing in onshore reservoirs, as well
as the collaborative multidisciplinary research that allows the industry to drill
and produce reservoirs 25,000 feet below
the mud line in 10,000 feet of water.
Much of what has become routine today
scarcely could have been imagined 1015 years ago, and the same will no doubt
be said a decade from now.
As remarkable as these accomplishments are, equally amazing is how the
industry has responded to events. Safety
and environmental protection have improved, and there is more transparency
in the way business is conducted. Industry
participants have worked together to apply
the adage that when identifying goals
collaboratively, "what gets measured gets
done, what gets identified gets dealt with."

Consortia Framework
Investments from government co-funding contributed to both the shale revolution
and deepwater development, ultimately
allowing the United States to regain its
role as one of the world's leading oil and
natural gas producers. Government-funded
research should have a specified goal and
be done when the same research would
not be done through industry funding.
Government-funded research also
should have potentially high rewards that
benefit the nation, including safety and
environmental protection. Increased domestic activity generates economic growth,
which translates to jobs as well as federal,
state and local tax revenues. It only makes
sense that some percentage of these revenues is reinvested in R&D efforts to
sustain activity.
The value of government co-funding
of oil and gas research also can be documented by reviewing a recent Research
Partnership to Secure Energy for America
consortia report that highlights research
that is contributing to several notable accomplishments both on- and offshore.
The report documents the process of collaborative efforts in completing more
than 150 projects through a consortium
framework and the advantages over a
JANUARY 2017 97



American Oil and Gas Reporter - January 2017

Table of Contents for the Digital Edition of American Oil and Gas Reporter - January 2017

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