Anadarko Basin drillers adapting to low prices

Friday, January 25, 2013

Natural gas producers in the Anadarko Basin are finding that a mix of high-tech and low-tech approaches is the best way to continue drilling in a low gas-price environment, officials and analysts said at the Platts Anadarko Basin Oil & Gas conference Thursday in Houston.

The Anadarko represents a sort of "Goldilocks zone" with a good mix of dry gas, natural gas liquids and oil, unlike primarily oil plays such as the Permian and Bakken Shale or predominately gas plays such as the Haynesville and parts of the Marcellus shales, said Rick Notarianni, energy analyst with Platts' unit Bentek Energy.

That mix of products has kept producers in the region and has also attracted more development, including proposed pipeline infrastructure and an NGL extraction plant in Haven, Kansas.

"There's a lot of money being invested here," he said. "People are expecting this to grow and they're putting the dollars behind it. It's not just a guess."

Drilling and completion costs can vary in the Anadarko, from about $3.2 million per well in the Mississippi Lime to around $8.5 million in the Cana-Woodford, Notarianni said. But one hitch is that drilling in this area produces flowback water, which then has to be separated out. That can be costly for small producers that don't have the same technological resources as larger firms.

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