Microhole Drilling
A U.S. Department of Energy-funded technology hits a gusher. Microhole coiled tubing drilling technology could be applied to thousands of shallow, mature, or apparently depleted oil and natural gas reservoirs across the nation.
The DOE projects the microhole technology may recover 1 trillion cubic feet of shallow gas bypassed by conventional drilling. One trillion cubic feet of gas is equal to 5 percent of America's annual natural gas consumption. The study estimates the technology could also recover 22 billion barrels of oil at less than 5,000 depth, equal to 10 years of OPEC oil imports.
The technology involves state-of-the-art hybrid coiled tubing rig and related downhole micro-instrumentation for drilling ultrasmall boreholes (generally, 1-3/4 to 4-1/2 inches in diameter). The rigs used can be small enough to mount on a trailer pulled by a standard pickup truck.
Microhole drilling equipment requires less manpower, requires fewer trips in and out of the wellbore, reduces volumes of drilling fluids and cuttings by 20% and costs up to 90% less than conventional drilling equipment. Shallow wells can be drilled in less than a day with cost savings averaging 38%.
Small diameter drilling is not new. Mining coring rigs have been used to drill deep holes with diameters of 1.175 inches for 50 years. DOE describes the challenge as developing an entire system including subsurface sensors, motors and other instruments that can fit into and operate under the stresses of the micro wellbore environment.
While some promising technologies are never commercialized, microhole technology has already reached the market. Xtreme Coil is using its newly patented coiled tubing design to drill wells in the aging, marginally economic, shallow oilfields of Colorado's Denver-Julesburg Basin. Xtreme also plans to drill for gas as deep as 10,000-12,000 feet in Colorado's Green River Basin.
This news will cheer both oil and gas operators and royalty owners. Operators can now return to marginal fields with an economical rework strategy and royalty owners could receive an additional $250 billion royalty dollars from the oil alone.
About The Author:
William Cavalier represents King Royalty Corporation to the broker-dealer and institutional markets. He has been in the investment business since 1979 serving as a hedge fund manager, registered investment advisor and member of the Chicago Mercantile Exchange. www.kingroyalty.com
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