Tommy Taylor
PBPA Chairman
While drilling rigs have been seen in nearly every corner of the Permian Basin for the last 100 years, it seems that the modern rig has become a fixture of today’s Midland geography. Currently, there are four rigs clustered together northeast of Loop 250, one rig drilling east of Midland Air Park and a couple of rigs operating south of Interstate-20. I guess they don’t call Midland the Tall City just because of the downtown skyline.
Drilling rig activity has traditionally been a key indicator for many in the service companies for planning their upcoming workloads and has also been tied to a relative indicator of oil and gas production levels. Entering the industry 43 years ago, when the rig count in the United States peaked at 4,530 rigs, the night skies were lit up by all the lights in the derricks. Today’s rig count is a paltry 625 in comparison, but don’t let that lower number fool you like it did for the anti-oil and gas politicians in Washington, D.C., last year. Modern technology and increased efficiency have those 625 rigs drilling many more productive oil and gas wells per year, helping the Permian Basin set new production records on what seems like a daily basis. In addition, a dry hole is indeed a rare occurrence these days in the unconventional reservoir development world. Polycrystalline diamond compact drill bits, steerable drilling guidance, multi-well drilling pads along with walking drilling rigs have all contributed to the incredible penetration rates and drastic reduction in drilling days to drill to total depth.
Technological changes in the way the industry fracture stimulates wells have also played a pivotal role in reducing the completion cycle times and increased ultimate recoveries of oil and gas from the resource plays. Multi-well pads brought about the evolution of fracturing techniques where two or more wells are fractured at the same time, all the while wireline work is simultaneously performed on adjacent wells not being fractured at the moment. Sand delivery has evolved too, from the typical pneumatic storage system to boxed sand delivery to “sand piles” (for increased overall pumping rates) to the conveyor belt system being contemplated for sand deliveries of great distances in far West Texas and Southeast New Mexico. The typical mindset of the traditional way of drilling and completion techniques has been turned on its proverbial head. It’s about doing more with less and living in the new manufacturing mode and driving the cost per barrel down.
The power of technological innovation in the U.S. oil and gas industry is seen in the unprecedented rise in our oil and gas production volumes, even with the lower rig count, by historical standards. This rise in production is our “proof in the pudding” moment. These revolutionary changes are not just limited to drilling and completion techniques. They are being applied to every facet of our business. Water recycling, emission reductions, data collection, and communications are other areas of technological advancements. And who knows what tomorrow will bring?
Your Permian Basin Petroleum Association recognizes that legislative and regulatory issues may arise as technology improves and changes our business environment. We stand ready to assist you with the help you need. PBPA is known as the voice of the Permian Basin in Austin, Santa Fe, and Washington, D.C., but also as a great source for education and training assistance from Big Lake to Artesia. In today’s industry, we might be better at drilling a well than we ever have been, but each of us might also need more help than we ever have in protecting our right to operate.