When oil and gas operators in Wyoming's Powder River Basin need to drill lateral wells stretching 3 miles or more through underground formations, they turn to Cyclone Drilling of Gillette.
The drilling contractor has emerged as the region's go-to specialist for the most technically demanding extended-reach projects, working with three major operators pushing the boundaries of what's possible in energy extraction.
"They all have 3- and 3-plus-mile laterals, and they have discussed incrementally longer and longer laterals," Paul Hladky, vice president of Cyclone Drilling, told Cowboy State Daily.
Hladky described the ambitious drilling programs his company is executing for Continental Resources, Devon Energy and Anschutz Exploration Corp.
"Whether it be that 4-mile milestone or not, I don't know if it's just a milestone or if there's value there,” he said about the ever-evolving underground world of horizontal drilling.
Hladky said extended-reach wells are becoming the new standard in the Powder River Basin, and Cyclone Drilling is meeting that demand with equipment upgrades.
“We're going to see some tech limits on the loss of hydraulic horsepower, the loss of hydraulic power as you get down in the wellbore," Hladky said. "So bigger pumps, which we've got two rigs in the yard right now getting pumping engine upgrades for additional horsepower, additional racking capacity. "
Racking capacity is the maximum amount of drill pipe that a rig can store vertically in its derrick or mast during drilling operations.
These modifications aren't just about raw power, said Hladky, describing gains in efficiency and continuity of operations.
"So, once you go into that 4-mile lateral, it's nice to not have to lay those tools down as you do multiple wells," he said. "So, we'll hold that drill pipe in the bore or in the mast while we walk to the next pad."
Horseshoe Hole
Drilling upgrades represent a significant investment in what Hladky calls "high-spec drilling rigs" designed specifically to accommodate these longer-range laterals.
That’s whether they follow straight horizontal paths or the more complex U-shaped and S-shaped trajectories that are becoming increasingly common.
The move toward horseshoe and S-shaped drilling patterns is meant to maximize resource extraction within lease boundaries, he said.
"The lease zone is only 2 miles from your vertical section," Hladky said. "So now all of a sudden, I'm limited by the lease area to where I can drill. So, if I do a horseshoe, I can open up more area, whether it be a horseshoe or an S, more production zone within my lease.
“Your costs on the surface are fixed. And if you can maximize that footage by having two or three or four miles of pay zone rather than one, you can do the math on that."
Steve Degenfelder, a landman with Kirkwood Oil and Gas in Casper, makes the economic case in simple terms.
"It's all about money. If the longer laterals are more economic, it's all good," he said. "You have already drilled the upper part of the well, why drill it twice or three times?
“Saving that money translates into lower finding and development costs for the same ultimate amount of oil or gas."
Staying Competitive
Given it’s more difficult and more expensive to drill for oil in Wyoming, and then transport it to market, Hladky pointed out producers in the state rely on the competitive edge offered by horizontal drilling.
"Well, we don't have the best positions,” he said. “In the Powder River Basin, it’s tough drilling when you compare it to North Dakota or in Texas, the Permian, we don't compete. There's a reason 80% of the drilling rigs are in Texas, because it's much easier to drill down there. And they're very productive wells. North Dakota is no different.”
Like Degenfelder, Hladky said the bottom line drives the bottom line for his industry.
“If we can't compete on the economic side of things, they're not going to drill here," Hladky said. “We just have to be efficient. We have to be good at what we do. Otherwise, that market share is going to go to Texas. Those capital dollars are going to go to Oklahoma, Utah, North Dakota, and they're not going to invest in Wyoming if it doesn't make sense. I mean, it's math."
Beyond the economics, Hladky sees the extended-reach drilling as beneficial for Wyoming's cherished landscapes.
"And in terms of an environmental impact, which is really important to us — particularly as a lifelong Wyoming resident — I mean, I like to look out at my Wyoming landscape as an open space," he said. "And so, if we can have fewer locations and fewer impacts to our area and still be able to guard the natural resources that Wyoming has to offer, it's a win-win.
“The United States is at its highest production rate at 13.5 million barrels a day with 100 less rigs than they had two years ago.”
At the same time, said Degenfelder, lateral drilling is reducing the industry’s overall footprint.
"From a surface situation, the longer the lateral will defuse the surface impacts to sage grouse and migration corridors," he said. "BLM and enviros should have less to oppose if the surface location is three miles from the impacted surface resource plus topography can hide a lot of surface facilities when it's 3 miles away."
Looking ahead, Hladky thinks horizontal drilling rigs will continue to expand their reach.
“Every major drilling contractor will have a rig with the specs to do 4 miles,” he predicted.
In March, Expand Energy announced it drilled a massive 5.6-mile lateral in northern West Virginia, claiming in a statement it was the longest onshore shale well lateral ever drilled in the U.S.
In from North Dakota, Phoenix Energy reported 4 miles of horizontal drilling at a rate of 267.4 feet per hour. A press release from the company says it’s done “four of the five fastest wells ever drilled.”
And in the June issue of the American Oil & Gas Reporter, the industry journal observed that lateral drilling distances are three to four times longer than those drilled 15 years ago.
David Madison can be reached at david@cowboystatedaily.com.
