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Doing the Lateral Lambada: Negotiating the Technical and Legal Challenges of Horizontal Drilling

Taylor Reid, John W. Morrison, Proceedings of 43d Annual Rocky Mountain Mineral Law Institute (1997)

Since the drilling of the first horizontal well in 1939,1 the oil and gas industry has made major strides in the development and successful application of horizontal drilling technology. Over 5000 horizontal wells have been drilled in the United States.2 The majority of these wells have been drilled in North Dakota and Texas, with cumulative production to date amounting to over 285 million barrels of oil equivalent (gas converted to fluid at standard 6:1 ratio).3

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Various estimates have been made concerning the future impact of horizontal drilling. Domestic impact estimates have reached as high as ten billion barrels, or two percent of the original oil in place.4 This ten billion barrel estimate represents a whopping 38% increase in recoverable domestic reserves. Internationally, Saudi Arabia's Aramco estimates that horizontal drilling will increase reserves by five to ten percent, resulting in an additional thirteen to twenty six billion barrels of oil reserves.5 Even a modest percentage of these projections will have a major impact on the worldwide oil and gas industry. As you might surmise from these projections, horizontal drilling will play an increasingly important role in the oil and gas industry as more conventional drilling targets are exhausted.