EXPLORATION & PRODUCTION
Operator Spotlight Curtis is specifically impressed with new completion designs and strategies used in the past two years. Operators today are attempting to keep fractures closer to the well bore to drain the surrounding reservoir more efficiently. With fractures closer to the well bore, more well bores can be drilled without fear of a nearby well bore’s fracture network bleeding into a neighboring well. More drillable locations (that don’t impact production for a neighboring well) means the recovery factor of a field increases.
Production Gains Have Chance To Shine With oil prices steady at or above the $50/b mark, private equity backing and a new leaner and meaner approach to operational efficiency, producers and their bullish talk will now be put to the test in 2017 and beyond. Already, capital spending and budget plans are distinctly up from the previous year. Kenneth Medlock, senior director for the Center of Energy Studies at the Baker Institute of Public Policy at Rice University, spoke with completion engineers, drilling contractors and analysts to reveal the true ability of shale producers to scale-up activity in 2017. “The recent increase in oil prices on the heels of OPEC’s agreement for production cuts stimulated a lot of commentary on how rapidly U.S. shale pro-
Early-year capital spending plans by many operators targeting a North American shale play are up from 2015 and 2016 budgets. The trend among most is an increase in capital for drilling rigs and completing drilled but uncompleted wells. Some E&Ps are even setting aside capital for future land purchases, midstream build-out projects or other activities. The following is a brief snapshot of operator plans for 2017, all of which have increased numbers for their respective rig programs, well completion plans and capital budgets from the previous year.
WPX Energy Rig program: 2 Williston Basin; 5 Permian; 1 San Juan Completion/Well Plans: Bakken (42); Wolfcamp (100) Capital plans: $260 million Williston Basin; $510 million Permian; $170 million San Juan Of Note: WPX Energy used the release of a multi-year growth plan to its advantage in forming service contracts before it incurred service prices increases. Through 2017, roughly 70 percent of all contracts for drilling and completions have been locked in.
Encana Corp Rig Program: 5 Permian Basin; 2 Eagle Ford; 1 Montney Completion/Well Plans: Permian Basin (145); Eagle Ford; Montney Capital Plans: $800 million Permian Basin; $250 million Eagle Ford; $460 Montney Of Note: Using intel and completion know-how from one basin, Encana has found a way to effectively implement completion and production changes into a different basin in less than 12 weeks to enhance completion designs and overall production across multiple basins.
Cimarex Energy Co Rig Program: 8 Permian Basin; 10 Mid-Continent Completion/Well Plans: Wolfcamp; Meramec Capital Plans: $1.2 billion total, with 66 percent headed toward Texas operations. Of Note: The possibility of rising services costs may require Cimarex to pump less sand downhole per well, but that scenario does not bother the Cimarex team. The company does not focus on pounds of sands per foot, but instead analyzes how effective sand is pumped and placed per frack cluster—or entry point—into the horizontal well bore.
Whiting Petroleum Corp Rig Program: 5 Williston Basin; 1 DJ Basin Completion/Well Plans: Bakken, Three Forks; Niobrara Capital Plans: $580 million Williston Basin; $420 million DJ Basin Of Note: Well productivity gains experienced by Whiting in the Williston Basin are not related to geology, the company said. Production increases—which are spread out across Whiting’s entire basin position—are now the norm.
Decline Curves in North American Basins
2011
2012
Permian Basin - New Mexico - Wolfcamp b/d
2013
2014
2015
2016
Permian Basin - Texas - Wolfcamp b/d
1,000
600
800
500
600
400
400
300
200
200 100
0 3 6 9 12 15 18 21 2427 30333639424548 51 5457606366 Months
0 3 6 9 12 15 18 21 24 27 30 33 36 3942 4548 51 54 57 60 63 66 Months
SOURCE: PETRONERDS, RAW DATA DRILLINGINFO
18 NORTH AMERICAN SHALE MAGAZINE ISSUE 1 2017