Alexander Khurshudov: multistage hydraulic fracturing technology has reached the peak of its efficiency
We often complain that there is too much junk on the internet, lots of outright disinformation and deceiving advertisement…though there is a balance in life. Sometimes you may come across seemingly unremarkable but really useful facts.
By mere chance (having followed a link) I came across the EIA report on Trends in U.S. Oil and Natural Gas Upstream Costs. By the way it contains reliable data on the condition of shale fields. There is no doubt about numbers and they not only represent the current situation but also provide some insight into the future.
Let me explain why this work is done. The EIA monitors the changes in proved reserves, which heavily depend on oil prices and recovery costs. It is too risky to forecast oil prices, but the trends in recovery costs can be defined by analyzing companies’ data. Let’s first look into the technology of well drilling and operation.
- Well construction
The technology of well drilling and completion in tight formations has been developing extensively in the recent years. Ten years ago they drilled a lateral wellbore of 600-1,000 m, performed 5-8 hydraulic fracturing (frac) stages with 200-400 tons of propping agent (proppant). That was enough for the well to produce 350-500 thousand barrels of oil. Now all the indicators have increased multi-fold (table 1).
Key drilling and completion indicators
The table shows that American drillers have achieved amazing results: they drill a 5-6 thousand meter long well in as little as 20-25 days (!!!) It takes precisely-organized operations and coordination of all the contractors. However, a part of the drilled wells are suspended for months waiting for a complex and expensive completion operation.
The horizontal part of an oil well now reaches 3 km with 20-25 frac stages and the amount of fluid of 20-30 thousand m3, proppant of 3-3.5 thousand tons, chemicals of 0.5-1.8 thousand tons. I should note here that the Americans call proppant any kind of propping agent, whether artificial balls of silica or natural coarse sand. Sand is cheaper, the biggest expense associated with it being the transportation cost.
The frac jobs interval has decreased. Previously they did a frac job per 120 m, now it is a job per 75 m. The average use of proppant has grown from 400 to 1,300 kg per a meter of wellbore. There have been publications about wells with 50 frac stages and 7 thousand tons of proppant. I don’t understand this gigantomania. It contradicts the physics of the formation; its efficiency is much less than the applied effort (pic.1).
Pic. 1. A frac job with a big volume of proppant scheme
The productive formation has a limited thickness. With the increase in the fluid volume fractures reach into neighboring formations. After the job is completed in shales and clays the fractures close, leaving most of the proppant outside of the oil-bearing zone.
2. Operational problems
The larger the frac job, the more problems there are after the well starts producing. Petroleum specialists know that the well after fracturing recovers proppant for a long time afterwards, and it contaminates the pumps and plugs the bottomhole. Pipes need to be run in the long horizontal section and the well needs to be washed. These are risky operations since they may cause sticking or failure of the pipes, so they have to be done very carefully. They are also expensive, besides, temporarily suspending the well is bad for its economic efficiency.
All this reasoning is logical, but it’s better be proved by numerous facts, and this would require analyzing 2-3 thousand wells’ performance. I randomly picked three wells in the Bakken formation drilled by a well-respected Hess company in the Mountrail county (pic.2).
Pic. 2. Monthly production change for the wells. Colors indicate workover time
The initial production rate is certainly impressive 750-1,200 bpd. Although five years ago such wells halved production in a year’s time, now it declines by 2.5-5 times in four months. The three wells combined produced 467 thousand barrels of oil and 206 thousand barrels of water within 19 months. This is not too bad at all. However, to pay back they have to further produce as much oil. Every well has been shut 2-3 times for 4-16 days, most probably to wash the bottomhole. I am not showing all the workovers not to overload the chart.
The most important thing is the longer the horizontal wellbore, the less dense the well spacing. With the lateral section of 600-1,000 m it was 36-60 ha per a well, producing 250-400 thousand barrels of oil. Now with the length of 2,500 m per well it equals 150 ha. Even if they produce the same 400 thousand barrels it means that the recovery factor has decreased by 2.5-4 times. The reason is obviously not a bad technology but the fact that they have to drill in less productive formations.
- Brief summary and oil price dynamics
In the work in question there is some curios data on shale oil economics, but we’ll deal with it next time. As far as technical data is concerned, the following conclusions can be made.
1. The multistage frac technology has reached the peak of its efficiency. Further increase in the length of the horizontal section (over 3 km) and the number of frac stages (over 30) doesn’t promise additional production and that’s why it is rarely used.
2. The quality of the formation itself, its porosity and permeability are the key factors in successful production from tight (shale) formations. They can be but slightly compensated by technical novelties.
Brent quotes for November have established over $64, but every time they bounced $1-2 back; the trading closed at $63,73 (pic. 3).
Pic.3. Brent quotes chart
The decision of OPEC+ to prolong limiting oil production taken on 30 November has already showed itself in oil prices; I don’t see any big news coming till the end of the year. Commercial stocks of oil, gasoline and diesel in the US in November have changed insignificantly, within 1-2 mln barrels. The rig count in the US has risen by 31, having declined by 38 in October. According to the current production data 9.682 mln bpd of oil have been produced in the US, the verified data for September show 9.48 mln bpd.
The established growing trend (see pic. 3) has a good chance of staying till May. In the early December the price may decrease to $62, followed by a move up to $65-66, the year may end with a little lower indicators.