Horizontal drilling assessment in Western Canada

The first horizontal well was drilled in Saskatchewan in 1987. Since then, the Anumber of horizontal wells drilled has escalated rapidly, averaging Aapproximately 500 per year since 1993. When combined with horizontal wells Adrilled in Alberta, the major Canadian oil-producing province, the total number Adrilled in 1995 was 978. This total exceeds the National Energy Board (NEB) projected maximum of816 wells per year. The NEB projections were based on a Abreak-even point for the drilling of horizontal wells of a return ofCDN A$285,000 using a discount rate of 15%. This corresponded lo a cumulative Aproduction from each individual well of some 11,000 m^3 The introduction of a Aroyalty-free production volume of 12,000 m^3 per horizontal well in Saskatch-Aewan was instrumental in stimulating the rapid expansion in the use of Ahorizontal wells and helping Canada to exceed the forecasted drilling level. AWithin Saskatchewan, daily production from 1964 active horizontal wells is in Aexcess of 20,000 m^3 Comparative analysis indicates that the average daily Aproduction per well has increased from approximately by 40% with the advent of Ahorizontal wells. In total production terms, provincial production has Aincreased from 1 1.7 million cubic metres in 1989 to 20.9 million m^3 in 1996. AThis represents an increase of almost 79% based primarily on the extensive use Aof horizontal wells. In 1996. horizontal wells produced 36% of the provinceʹs Aoil from 12% of the active wells. In the southeastern producing area of ASaskatchewan. the Williston Basin, declining oil-production has jumped 100%. with horizontal Awells accounting for approximately 50% of total regional production. Pay zones Ain this area. as in most of the province, tend to be relatively thin. with net Apay frequently less than 5 m. The modest investment of some CDN S5 million in Agovernment research funding 10 years ago to simulate the development of Ahorizontal wells, combined with a favourable royalty structure, has been at Aleast partially responsible for very significant benefits to the provincial Aeconomy. In Saskatchewan, horizontal wells have (i) paid over CDN S400 million Ain royalties since 1990. (ii) annually generated CDN S525 million in investment Aand (iii) sustained 4350 jobs. Details pertaining to the Winter Cummings Sand APool and others as examples of the success of the horizontal well program in ASaskatchewan are discussed in this paper. (. 1999 Elsevier Science Ltd. All Arights reserved.