In a few key areas where advanced technology has unlocked massive new reservoirs, oil and gas companies continue to make substantial investments in development, with a strong focus on drilling new wells to capitalize on these previously inaccessible resources.
On Monday, Laredo Petroleum Holdings announced that its board of directors has approved a $1 billion capital budget for 2014. More than 80 percent of the investment will be allocated toward drilling and well completion. The company said it hopes this level of funding will support a 30 percent increase in annual production from its Permian Basin properties.
Laredo said it expects to deploy five vertical drilling rigs and as many as seven horizontal rigs, with the majority — 85 percent — of planned horizontal wells being development wells. The company said it would concentrate drilling activities in areas where it was building production corridors so teams would be able to make use of common facilities and maximize cost-efficiency.
In this type of situation, well operators can benefit tremendously from the efficiency of a hydraulic lift solution that can be used to begin and maintain production at horizontal, vertical or deviated wells. The hydraulic jet pump can be installed in all three types of wells and can even be successfully deployed at sites where issues with the completion of well casing would limit the effectiveness of other products. This high level of versatility enables companies to rapidly complete drill stem testing and start producing hydrocarbons.
In the release announcing its investment plans, Laredo highlighted the importance of moving to production quickly, noting that it would "focus on building out the core infrastructure that will enable the Company's transition to full-scale hydrocarbon manufacturing."
Total production in 2014 is forecast to reach 12.2 million to 12.7 million barrels of oil equivalent — more than 33,000 barrels per day. About 60 percent of the hydrocarbons are expected to be from oil, with slightly more than 40 percent comprised of natural gas.
The hydraulic jet pump can manage high volumes and has excellent solids-handling capabilities. Furthermore, with no downhole moving parts, the unit has minimal maintenance needs. Retrieval for maintenance or optimization can be performed without a wire-line or work-over unit, requiring only the manipulation of surface valves.
These qualities make the jet pump an attractive option for well operators in need of a hydraulic lift solution.