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Coverage of energy that moves beyond polarized arguments and emotional debate to explore the points of tension, the tradeoffs and opportunities, and the very human consequences of energy policy, production, use and innovation.Inside Energy is a collaboration of seven public media outlets in the nation's energy epicenter: Colorado, Wyoming and North Dakota.

Low Oil Prices Put The Focus On Innovation, Well Efficiency – Not More Drilling

Leigh Paterson
Inside Energy
John Pope is the CEO of WellDog, an energy technology services company.

Oil and gas executives are wondering, "how do we get more out of our wells?"

The urgency of that query, in response to falling oil prices and drilling rig counts, has companies responding by switching their focus from efficiency above ground to efficiency below. Think of it as embracing technology to increase well production versus simply drilling faster and operating 24/7.

At an energy conference in Vail, Colorado, Jim Brown, President of Western Hemisphere at Halliburton gave an example of a new product that could help with underground efficiency.

"We've developed a biodegradable diverting agent that we can pump in real time and direct that frack," Brown said.

BioVert is a chemical substance that sends hydraulic fracturing fluid toward the rock formations with the most oil and gas. Brown claims that two operators in the Bakken have already seen production go up 36 percent. He also added that Halliburton is now diverting most of the three-quarters of a billion dollars that it spends on research and development each year to making its operations below ground more efficient.

In addition to efficiency, oil and gas companies are more interested in drilling in the so-called sweet spot. That is a term loosely used by the industry to describe the parts of rock formations with the highest concentrations of hydrocarbons. Sweet spots are in high demand because the recovery rate for oil is very low. According to the Energy Information Administration, producers generally only get three to seven percent of the oil out of any given well.

A Wyoming-based company wants to change that low recovery rate through a sensor. The company, WellDog, markets the product under the name WatchDog. It collects data deep underground and sends it to the surface for analysis.

"That information can be used by the operators to do things such as indicate whether the well is healthy," said John Pope, CEO of WellDog.

WatchDog can also be used to indicate where to frack, and where not to – the sort of information that is necessary if you want to drill for oil. Sales of the Watchdog product so far are already more than three times what they were for all of 2014. While Pope said this sort of so-called downhole technology isn't entirely new, the scramble to offset low oil prices is.

"In boom times, optimizing can lead to increased profits. In challenging times, optimizing can make the difference between profits and no profits," Pope said.

It is too early to really know if all this technology and money is going to wrestle significantly more oil from the rock. But consider this: Although the U.S. rig count is down nearly 40 percent versus the same time in 2014, as of March 2015, overall crude production in the U.S. is projected to rise [.pdf].

Inside Energy is a public media collaboration, based in Colorado, Wyoming and North Dakota, focusing on the energy industry and its impacts.

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