We would like to recognize the following individuals for their service to our company. Your years of service are greatly appreciated.

 

Dear Friends,

When we were finally breathing a sigh of relief that our domestic economy has a chance for a comeback, the European crisis kicked in, led by Greece's bailout and worries from Spain to Italy.  The latest news about the European Union $1Trillion rescue package adds to our logical fear about the future.  There are plenty of confusing signals in the natural gas market.  It has been difficult to reconcile the low price/low demand environment with the increase in rig activity and overall production driven by shale development.  From the demand perspective, it seems like all signs point to steady increases for natural gas in the future, but the near term has been stymied by the weak economy and mild weather.
  With oil prices at 20x gas prices and the drive to reduce carbon emissions, gas demand should show a long steady increase for many years.  Will there be enough demand to drive prices back up to double digits in the next few years?  Most of our industry partners can make their North American business model work when gas is above $6 and the more efficient shale plays seem to work north of $4.  We have a high confidence level that market pricing will settle in at or above that range within the next 1-2 years.

It has been exciting to watch the developments in horizontal drilling and the productivity increases from shale plays.  Here are the latest statistics that we have reviewed in the Marcellus:

400 MMCFED produced already, 30 major E&P participants, 88 rigs, 1500 wells drilled in the 1st quarter of 2010, 6000 wells drilled last year (permit activity shows a pick-up in 2H 2010 if prices hold), there were around 300 Marcellus permits issued in March 2010.

Over the last few years we have been fortunate to work very closely with the pioneers in the Marcellus and other shale plays.  This has given us very early exposure to the types of wells and performance being achieved across the region.  When combined with our field work in the Rockies and in other basins in the U.S. this exposure has provided our engineers with plenty of information regarding well performance and liquid loading issues.  Our early results tell us that:

1.  Horizontal wells can benefit from plungerlift early in their lifetime.  Even though production is typically excellent we've found that the removal of fluid while the well is at peak production is essential toward softening the decline curve, higher production numbers later in the wells life and ultimately better reserve numbers.  It can be improved significantly by consistent fluid removal, and plungerlift has been the most effective method in most wells.

2.  Multi's casing plunger technology provides a very interesting potential (from a cost savings standpoint as well as production efficiency) solution for horizontal wells.  Our engineers are working closely with our customers and in the lab to determine the best design to complement our tubing plunger product line and provide a comprehensive solution. 

3.  Other critical components like lubricators, standing valves, motor valves, and wellhead controllers also need important design changes to be most efficient in the productive horizontal wells that are typically being produced today.  Our product line has been designed to account for higher pressures and horizontal completions.  Our unique line of motor valves has been designed with high technology coatings to handle the many corrosion and wear issues faced by high flow and sand.

We look ahead to a very exciting 5 year period as thousands of new wells get completed and our industry helps solve the domestic energy problem.  The ingenuity of our E&P companies, successfully developing shale and other unconventional resources, has changed the landscape for our energy future.  We have now lowered our dependence on foreign oil and natural gas, and created new opportunities.  With proven reserves increasing steadily, natural gas should be able to demonstrate more price stability resulting in more future demand.

 

Appalachian Basin Gas Well Deliquification Seminar Jun 7-8

KOGA Annual Meeting - Louisville, KY June 16-18

 

 Problems with premature valve failures from Sand Erosion?

 

Multi
Introduces the NEW
MPC-W Motor Valve
With Erosion and Corrosion Protection