DOE-Funded 'Microhole' Drilling Rig Demonstrated Successfully in Midcontinent

New Technology Initiative Slashes Drilling Costs, Benefits Environment, Energy Security

Washington, DC - A U.S. Department of Energy-funded technology that could change the way America's oil and natural gas wells are drilled has been successfully demonstrated in the Nation's Midcontinent region.

A specially designed hybrid "microhole" coiled tubing rig recently concluded the drilling of 25 test wells to penetrate a particularly intractable natural gas formation called the Niobrara in western Kansas and eastern Colorado. The effort delivered cost savings of 25 to 35 percent per well drilled compared with conventional drilling equipment. As a result, about 1 trillion cubic feet of shallow gas that had been bypassed by conventional drilling has now been made economic. That volume equates to about 5 percent of America's annual natural gas consumption. 

While coiled tubing rigs are used frequently to service or stimulate production in problematic oil and natural gas wells, operators have only recently begun drilling more "grassroots" exploratory and development wells with them. And that effort has largely been limited to higher-cost operating areas such as Alaska and Canada.

The commercial Niobrara drilling program - in which 3,000-foot wells were drilled in as little as 19 hours, from rig move-in to move-out - followed a Department of Energy-funded research project undertaken by Gas Technology Institute (GTI), Des Plaines, Ill. In that effort, GTI partnered with two small firms - Advanced Drilling Technology LLC (ADT), Yuma, Colo., and Rosewood Resources Inc., Dallas, Texas - to adapt a conventional coiled tubing rig for drilling exploratory and development wells with ultra-small diameters.

The GTI project received funding from the Energy Department's Microhole Technology Initiative. Managed by the Office of Fossil Energy's National Energy Technology Laboratory, the initiative seeks to develop the tools and techniques for drilling ultrasmall boreholes (generally, 1-3/4 to 4-1/2 inches in diameter) and related downhole micro-instrumentation, using coiled tubing drilling rigs that are small and easily transportable. These rigs - some small enough to mount on a trailer pulled by a standard pickup truck - employ solid tubing coiled around a spool on the trailer to drill boreholes with well casing diameters of less than 4-1/2 inches. Such rigs can drill shallow wells very quickly, saving substantially on daily rig costs and dramatically improving the economics of drilling.

GTI's microhole project was meant to pioneer the use of an experimental, "built-for-purpose" coiled tubing rig designed to drill exploratory and development wells with ultrasmall diameters in the Lower 48 States. ADT and its predecessor Coiled Tubing Solutions Inc. designed and fabricated the rig specifically for microhole coiled tubing drilling to depths as great as 5,000 feet. Earlier Energy Department research had proven this capability to only a few hundred feet.

GTI and partners field tested this state-of-the-art hybrid coiled tubing rig by drilling a few inexpensive microbore wells to about 1,200-1,400 feet in the Niobrara chalk formation along the Kansas-Colorado border. The results far exceeded expectations, with drilling cost savings averaging 38 percent. The project's success garnered nominations as a finalist for the 2005 World Oil Award and for 2005 Operator of the Year by the Colorado Oil and Gas Commission.

The project's initial success and strong commercial follow-up also demonstrated the potential for coiled tubing drilling of exploration and development wells in the Lower 48. For the first time, a Canadian coiled tubing drilling company, Xtreme Coil Drilling Corp., Calgary, AB, Canada, is drilling grassroots wells in the Lower 48 for an American company, Anadarko Petroleum Corp., The Woodlands, Texas. 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. By the end of this year, Xtreme Coil also is expected to deploy its coiled tubing drilling at depths as great as 10,000-12,000 feet in deep natural gas fields such as Pinedale and Jonah in Colorado's Green River Basin for another operator, Denver, CO-based EnCana Oil & Gas (USA), Inc.

Microhole coiled tubing drilling technology has the kind of game-changing potential that could be applied to bypassed resources in thousands of oil and natural gas reservoirs across the Nation, particularly for shallow reservoirs in mature or even apparently depleted fields. The Energy Department estimates the volume of bypassed oil in U.S. oilfields at less than 5,000 feet subsurface at more than 218 billion barrels. Recovering just 10 percent of this targeted untapped resource equates to an amount equal to 10 years of OPEC oil imports at current rates.

- End of Techline -

For more information, contact: Mike Jacobs, FE Office of Communications, 202-586-0507