US Light Tight Oil Completion Technology v Geology

(OilPro, September 2016)

US LTO production has grown ten-fold from it’s infancy in 2008 to a peak of 4.5 million barrels per day in 2015 . Since then, production has dropped to 4.0 million barrels per day as a consequence of lower oil prices, equivalent to 4% of global liquid production. During the last three years, producers and oilfield service companies have reduced costs via multi-pad drilling, more efficient rigs, improved well/completion designs and optimised gathering systems. Longer horizontals with up to 50 stage fraccs combined with improved proppant types, hybrid fluid systems are targeting the best play sweet spots. This has resulted in a significant increase in short term productivities.  Lower costs and higher volumes have combined to reduce break even oil prices, with some LTO producers quoting break-even oil prices as low as $30.

This paper summaries work by the author on the Bakken / Three Forks Play and quantifies and differentiates the impact of completion technology versus geology on single well economics and break-even oil prices.

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To frac or refrac? Insights from the Bakken

(Search and Discovery Article #80569, December 2016)

Publically available data on U.S. frac jobs suggests refrac operations are still relatively modest, but growing. In 2014 refracs accounted for 1.7% of all U.S. fracturing activity, 2.3% in 2015 and 2.6% by Q1 2016. For some U.S. Shale / Light Tight Oil (LTO) producers, refracs have become a hot topic – again. Are they an overrated niche technology, or can they provide a lower cost alternative to drilling, as the number of high quality drilled uncompleted wells (DUCs) begins to decline?

This paper builds on previous work by the author and summarises the results of a non-proprietary study on Bakken and Three Forks refracs. Wells that started producing after 2008 and had two or more fracs that were more than 12 months apart were identified and investigated. Incremental refrac production to date and estimated ultimate recoverable (EUR) were estimated. A refrac economic model was created and the incremental EUR required to breakeven and generate an IRR of 10% determined. The economics of refracs v fracs are considered.

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