AS NORTH America's upstream focus has shifted to unconventional reservoirs, well costs have soared. Although cutting-edge technology, deployed early in the development of a well, can cut those costs dramatically and increase the chances of success, operators are often reluctant to use it.
One reason, quite simply, is that engineers have been trained to contain costs and advanced technology is expensive, says Lyle Lehman, sales, marketing and principal project manager of Houston-based StrataGen Engineering, a reservoir-engineering and -fracturing consulting firm. Lehman describes an engineer as an "accountant who understands a lot more science. When you take the principles and practices tests to become an engineer, you look at economic outcomes," he explains. "That's accounting, or finance."
A widely accepted resource model has also discouraged the use of costly technology by encouraging operators to drill multiple relatively inexpensive wells in hopes of finding a few easy-to-produce plays. Devised in 1979 by...