Shale drillers optimize drilling via laterals
Tuesday, November 1, 2016
Oil and gas drillers are changing their strategy for maximizing output in shale formations.
The new technique allows producers to pull more crude out of fewer wells by drilling longer wells, running thousands of feet sideways to top as much crude-bearing rock as possible, according to Bloomberg.
SM Energy Co. spent $1.6 billion last month to expand its acreage in the Permian Basin and utilize this progressive method.
The ability to bore longer laterals adds value to wells and reduces the need for more wells. According to Bloomberg, doubling laterals and utilizing other production optimizing techniques could make a well over four times more valuable.
Learn more: Bloomberg > Shale Drillers Are Going Long — Not Deep — in the Oil Patch
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Shale FAQ
How often do royalty payments come?
Depending on the company, royalty payments can arrive monthly or quarterly.
Are my royalty payments transferable?
Yes. If you plan on selling your property, notify the gas company that is leasing your land and your realtor. They will make arrangements to allow the royalty payments to transfer to a different land owner.
What are royalties?
Royalties are payments from the gas company to the landowner as part of a lease agreement. Royalties payments cannot begin until production begins. The payments are dependent upon the market price of the resource.