In Part 1 of this article, we focused on subsea production and dual-gradient drilling. The two technological advancements that are having a profound and growing impact on the feasibility, cost, and safety of drilling in deepwater and ultra-deepwater.
In this second part, we'll look at the cost saving and efficiency increases inherent in multi-well-pad drilling and at the promise of remote liquefied natural gas processing. We'll also quickly describe the advancements in seismic data collection and processing. In addition to looking at these technological wrinkles, we'll also note the companies that stand to benefit the most from their implementation.
The only pad you'll ever need
Multi-well-pad drilling is a slick-as-a-whistle advancement in onshore drilling that is already revolutionizing our ability to radically cut the time and expenses necessary to drill wells onshore. At the same time, given the cacophony that's erupted around shale drilling and fracking, it's important to note that multi-well-pad operations are kinder to the environment than are traditional methods.
Under the older approach, a single pad was required for each well. That one pad typically allowed for drilling on about seven acres.
But with new development -- frequently called "octopus" technology -- dozens of wells can potentially be drilled in a variety of directions from a single pad. As such, the previous coverage of seven acres per pad catapults to 2,000 acres for each one. The technology is straightforward: Once a pad is placed on a play and a well is drilled, the rig heads off on its hydraulic tentacles to another location, preparing to drill again from that same pad. In the process, the previous five days between wells is slashed to about two hours.
The process, which was first used in Colorado, and has found its way to Pennsylvania, has already been responsible for some amazing statistics: Encana (ECA +1.36%) has drilled 51 Piceance shale wells in northwestern Colorado from a single pad. And Devon Energy (DVN +0.65%) has completed 36 wells from a single pad in the Marcellus shale. Obviously, these companies -- among others -- are already benefiting from this staggering advancement.
Chilling out
As the U.S., with its vast new gas finds, moves toward liquefied natural gas production and export, anyone with a modicum of interest in energy knows about Cheniere Energy's (LNG 0.62%) current construction of an LNG processing facility at Sabine Pass in southwestern Louisiana. But a couple of other approaches to liquefaction are about to make a big difference in LNG processing.
To reach a liquefied state, natural gas must be chilled to minus 260-degrees Fahrenheit. That's likely to be close to the emperature that ExxonMobil workers will encounter when they initiate operations with Rosneft in the Russian Arctic.
But the liquefaction process can be conducted offshore, permitting LNG processing in otherwise excessively remote locations. For instance, Royal Dutch Shell (NYSE: RDS-B) is creating a vessel specifically for that purpose. It'll likely cost as much as $12.5 billion and will exceed the size of an aircraft carrier by sixfold. It's slated for duty about 125 miles off the Australian coast.
If that's too big for your taste, you should know that in April General Electric (GE 2.39%) unveiled Its new "LNG In A Box." The unit is a small scale, plug-and-play, and redeployable. It can be used for the production and use of LNG for long-haul trucking and remote mining or oil and gas operations.
So while most of us tend to think -- correctly, no doubt -- of Cheniere as a solid way to play LNG, that particular functionality is also just one of many areas in which GE has assumed a leadership role. In Part 1, I noted the big company's sophistication in subsea production equipment.
More Schlumberger leadership
In the world of seismic, where it all begins for oil and gas, there's been exponential growth in the amount and utility of the data collected, thanks to the development of both three- and four-dimensional technology. I explained both in a recent article.
But it's the vastly increased processing capabilities resulting from ongoing advancements in super computing that's really made a tremendous difference in seismic. Data loads that once would have taken decades to process can now be sorted, analyzed, and categorized in a matter of weeks or even days.
I noted in Part 1 that Schlumberger (NYSE: SLB), easily the largest participant in the oilfield services space, is appropriate for subsea investing. The same can be said of seismic. The company's WesternGeco unit leaves its competition in the dust -- or water -- from the perspective of both size and technological sophistication.
Foolish bottom line
There are other areas in which technological advancements are making a profound difference in the search for and production of oil and gas. Above and in Part 1, I've mentioned five of the key technological improvements. The companies noted in that connection should hardly be ignored by Fools with a thirst for energy.
