What Is a Development Well?

A development well is drilled in a proven producing area for the production of oil or gas. It stands in contrast to an exploratory well, which is one that is initially drilled to find oil or gas in an unproven area. As a result, dry or unsucces𝔍sful development w🍸ells are rarer than dry exploratory wells. Chances of success increase when the development well is drilled to a depth that is likely to be most productive.

Understanding a Development Well

The intent of an oil company’s development well drilling phase is to maximize economic production and recovery of a reservoir’s known reserves. The expl♊oratory well determines whether oil and gas are present in a prospective reservoir. Since geology and subsurface conditions are uncertain, there are heightened risks of complications during exploratory drilling. 

Energy companiꦡes expend significant resources in pinpointing the best locations for drilling wells since a dry or unproductive well can be a substantial expense. While exploratory wells are designed to🐻 confirm reserves are accessible, development wells are drilled with various and different objectives, such as flowing production, artificial lift production, injection of water or gas, and monitoring the performance of a well.

The accounting treatment for development wells also differs from exploratory wells. The costs of dry development wells are usually capitalized as an asset on the 澳洲幸运5开奖号码历史查询:balance sheet, whereas the costs associated with dry exploratory wells are an expense on the 澳洲幸运5开奖号码历史查询:income statement, according to the 澳洲幸运5开奖号码历史查询:International Financiꩵal Reporting Standards (IFRS) and the United States 澳ꦆ洲幸运5开奖号码历史查询:generally accepted accounting ℱprinciples (GAAP).

Development Well vs. Appraisal Well

The probability of achieving a successful well increases as more wells are drilled in an 澳洲幸运5开奖号码历史查询:oil field. It is first necessary to 🍰divide the drilling program into stages, and then it💃 is possible to compare the success of wells in different fields.

Development wells tend to be the final phase of the oil drilling process. The four phases of the oil and gas extraction process🅘 are as follows:

• Exploration
• Well development
• Production
• Site abandonment

Before the drilling of a development well, 澳洲幸运5开奖号码历史查询:oil and gas companies usually drill appraisal and exploration wells. Appraisal wells are drilled onl𒅌y when a discovery is made, with the motive of ꧑assessing the size and viability of the reservoir. Drilling techniques vary widely.

The life cycle and operation♋al period of development wells are much greater than appraisal wells. Additionally, development wells a🦩re normally larger in diameter and deeper than exploratory wells, thus they are also much more expensive and complex to drill.

Success rates of wells drilled during the exploration phase have improved ꦺsignificantly ove𝓡r the last 50 years. For example, in the 1960s, exploration wells were successful only about 45% of the time, compared to development wells, which enjoyed a 70% success rate. By the 1990s, the gap had narrowed considerably, with exploration wells successful 62% of the time and development wells 67% of the time.

According to the Energy and Information Administration (EIA), The number of producin🐓g wells in th💜e United States reached a high of 1,029,588 wells in 2014 and steadily declined to 936,934 wells in 2020, mostly because of lower oil prices and less rig activity.

U.S. oil production reached 12.9 million barrels per day in December 2019, and U.S. natural gas gross withdrawals reached 116.9 billion cubic feet per day in December 2019. U.S. oil production and natural gas gross withdrawals both declined in 2020 because of lower demand linked to the COVID-19 pandemic.