Story By (Bloomberg) — Oilfield-service costs for US horizontal shale drilling are expected to rebound in 2025, clawing back some of this year’s drop, as explorers expand the hunt for oil and natural gas and extend sideways wells, according to industry consultant Enverus.
Enverus said Tuesday in a report that this year’s reduction in drilling and fracking, combined with the push to maximize efficiencies, is seen as lowering per-well costs for shale operators by 6.3%. But in 2025, those costs are expected to rise by 2.8% as drilling accelerates.
“We believe activity has bottomed, and oilfield-service prices will bottom by the end of this year,” said Mark Chapman, oilfield-services principal analyst at Enverus. “An oversupply of fracture sand caused prices to fall this year, but an expected rebound in gas-directed wells and a trend to longer laterals should boost prices in 2025.”
The number of onshore rigs searching for oil and gas in the US has fallen 6% since the start of the year amid a wave of corporate takeovers and technical advancements that boosted output on a per-well basis. According to Barclays PLC, total spending by North American drillers is forecast to drop 1% this year.
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What is a Horizontal Well
A horizontal well is an oil or gas well dug at an angle of at least eighty degrees to a vertical wellbore. This technique has become increasingly common and productive in recent years. The horizontal well is a type of directional drilling technique. Operators use it to retrieve oil and natural gas in situations in which the shape of the reservoir is abnormal or difficult to access.
Most horizontal wells are started by first drilling a vertical well. After drilling down to the target rock, the pipe is pulled out of the well and a motor is attached to the drill bit. The motor is fuelled by a flow of drilling mud down the drill pipe, rotating the bit without rotating the entire pipe. This allows the drill bit to create a path that is different from the orientation of the drill pipe.
Even though horizontal drilling is more expensive, there are numerous reasons why it is done. Vertical wells can drain rocks that have high permeability; however, low-permeability rocks do not let fluids flow quickly, and thus, using a vertical well for these rocks would not be economically viable.
READ MORE: How are Wells Drilled?
