The first annual Developing Unconventional Oil (DUO) conference kicked off on Tuesday, May 18, 2010 in downtown Denver, Colo. The big news for most attendees was the vast expansion of shale oil resources within the last 15 years. As an example, the US Geological Survey (USGS) estimated Bakken reserves at around 151 MMbbl of oil.
That was in 1995. In April 2008, the USGS increased the volume of technically recoverable reserves to an estimated 4.3 Bbbl. According to Harold Hamm, CEO of Continental Resources, this number will eventually reach 8 Bbbl. These numbers apply to only one portion of the Bakken, which extends into Canada. In the US and abroad, unconventional oil is becoming commonplace.
All 850 conference attendees were presented with a host of information including all sectors of the resource, both upstream and downstream. The technical session focused on staged fracturing techniques and microseismic evaluation in regard to their effect on production. Regardless of the specific subject addressed, virtually every presenter at the conference tipped a hat to the drilling industry. Advances in horizontal drilling and completions were mentioned at every turn as being the major factor in making the Williston Basin such a success.
The important point to make is that drilling began in the Bakken around 1950. While production was present, this play was often considered a last resort for drillers. With time, R&D, and practical experience in the Austin Chalk and Barnett, drilling companies have greatly improved their strategies to produce more with less.
Jim Volker, CEO of Whiting Petroleum, stated in his morning address that the company’s wells in the Sanish field is down to a cost of US $5.5 million per well from an original cost of $8.5 million. Both Hamm and Volker were clear in stating the importance of technology. Although the Bakken is probably the more familiar example, other plays covered at the one-day conference included Three Forks/Sanish, Monterey, Niobrara, and Mowry.
This list remains incomplete as more discoveries are under way. Improvements in technology are making these discoveries possible. A keyword often used to describe advances in drilling and completion techniques is “game-changing.” While this term holds true, it begs the question: What will be next? Although subtle, if one listened to the conversations on technology, the mention of logging, whether in real time or through memory based tools, was not listed as a major contribution to increase in unconventional reserves.
Due to high cost and the risk of putting millions of dollars down a 5,000-ft (1,524-m) lateral, logging is only done sparingly in many of the new hot shale plays. While most shales may seem homogeneous, it is safe to say that even the most solid foundation contains variety in porosity and grain size. Leen Weijers, who serves as the Rocky Mountain regional manager of Pinnacle, presented on real-time fracture analysis. He hinted that the average mentality in most shale plays is to “Frac that son-of-a-bitch!”
Although he received laughter from the audience, this statement is true. With less information on the downhole environment, most operators are forced to frac each well with a preferred, somewhat homogeneous setup of staged completions. The success of the development is counted as a percentage (i.e., 98% successful) in the Bakken, according to Volker’s report on Whiting Petroleum’s performance.
Fracturing technology is an important tool, but what if this process could be carried out more efficiently? One problem with using a uniform template — because it works most of the time — is the potential for overlap. Fracing sections that are not likely to respond increases cost, puts undue pressure on local water supply, and breaks down the efficiency of operations. As the axiom goes, what you do not know cannot hurt you. Nevertheless, it can cost companies millions of dollars in an already tight market. The next area of advancement for developing unconventional plays will involve going into each well with as much data as possible.
By knowing the exact make-up of a single well bore, a homogeneous 22-stage frac job could be vastly reduced (if necessary). The end result could save time, money, and lost production. Improvements continue to be made in all areas of the drilling and completion process. Logging should be included in this process. Whether it is done through real-time or memory based deployment, more data could be the next game-change in unconventional development.
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