North Carolina Farmout - Horizontal Wells

• Category: Oil Gas and Minerals - Agreements
• State: Multi-State
• Control #: US-OG-704
• Format: Word; Rich Text

Description

Should any Party elect not to participate in any Horizontal Exploratory Well, other than the Initial Well proposed under the terms of the Agreement, the non-participating Party agrees to farmout to the participating Parties its interest.

North Carolina Farm out — Horizontal Wells is a type of drilling technique used in the oil and gas industry to extract hydrocarbons from unconventional reservoirs. This drilling method involves the horizontal drilling of wells, which extends horizontally through the rock formation rather than vertically. As a result, it allows for increased contact with the reservoir, enhancing production rates and recovery efficiency. North Carolina Farm out — Horizontal Wells offer several advantages over traditional vertical wells. One key benefit is the ability to access previously unreachable or uneconomical resources. By drilling horizontally, operators can tap into reservoirs that were once considered too difficult to exploit, maximizing the potential of the oil and gas reserves. Another advantage of North Carolina Farm out — Horizontal Wells is the increased surface area exposed to the reservoir. This allows for enhanced access to the hydrocarbons, enabling better recovery rates. The extended reach of these wells also reduces the need for multiple vertical wells, minimizing surface disruption and reducing the overall environmental impact. In North Carolina, there are several types of Farm out — Horizontal Wells, each suited for specific geological formations and production goals. These include the following: 1. Shale Gas Wells: North Carolina has significant shale gas reserves, particularly in the Triassic Basin and Deep River Basin. Farm out — Horizontal wells are employed to extract natural gas trapped within the shale formations. This technique involves hydraulic fracturing (fracking) to release the gas from the rock, which is then collected through the horizontal well bore. 2. Tight Oil Wells: In parts of North Carolina, there are formations with tight or low permeability, such as the Cretaceous-age Tuscaloosa and Eagle Ford sales. Horizontal drilling is employed to create multiple fractures in these formations, allowing for the extraction of oil that would otherwise be trapped in the rock. 3. Coaled Methane Wells: Coaled methane is an unconventional natural gas found in coal seams. Horizontal drilling is used to intersect and exploit these seams, releasing the trapped methane gas. This technique involves watering the coal seam to reduce pressure, allowing the gas to flow to the well bore. 4. Offshore Wells: Although North Carolina's offshore drilling industry is still in its early stages, the potential for Farm out — Horizontal Wells exists in the future. These wells could target offshore oil and gas reserves, similar to the ones found in the Gulf of Mexico. Horizontal drilling would enable efficient extraction and maximize production rates. Overall, North Carolina Farm out — Horizontal Wells represent a cutting-edge technology that has revolutionized the oil and gas industry. By unlocking previously inaccessible resources, these wells contribute to energy security, economic growth, and job creation within the state. As the industry continues to evolve, further advancements in drilling techniques will undoubtedly enhance production and strengthen North Carolina's position in the energy sector.