Is microseismic about to shake loose?
The technique is best associated with the early days of the Barnett Shale and the advent of horizontal drilling and multistage fracturing. However, microseismic predates the Barnett and had actually moved toward commercialization in the Piceance Basin a little over a decade ago.
But the technique came of age in the Barnett as operators and service companies scrambled to understand what was happening underground during the fracture stimulation process. That said, market penetration for microseismic, at an estimated 5% of horizontal wells, remains low today.
Hart Energy’s Market Intelligence survey program canvassed the industry in August for a status report on microseismic.
“We drill five to six wells utilizing microseismic for each 50 to 60 wells drilled,” a mid-sized Oklahoma oil and gas operator told Hart Energy surveyors.
Several issues affect market penetration. For one, far-field microseismic events did, in fact, occur during the fracture stimulation process but did not necessarily mean that those events had been reached either by an induced fracture pathway or with proppant. Hence, the productive potential of fracture-stimulated wells was sometimes overstated on the basis of the microseismic readings. The issue led to misperceptions in the market about the effectiveness of the process.
Additionally, operators have shied away from widespread use of microseismic because of pricing issues. But that may be about to change.
Hart Energy’s survey found both operators and service providers predicting greater use of the technique with the move to multiwell pad drilling and acreage drill-out as the manufacturing phase of the unconventional cycle takes hold. Multiwell pads reduce microseismic costs per well by spreading expenditures across multiple wells while also providing wellbores in close proximity to aid the microseismic process.
“The price of the technology and the proximity of wells for monitoring are the two greatest limiting factors for us,” another mid-sized independent oil and gas operator told surveyors. “It will make better sense when we are pad drilling with multiple wells in close proximity.”
Service providers and operators said they expect microseismic’s share should double to 10% of horizontal wells in the future. Noted a West Texas oil and gas operator, “We use microseismic in 1% to 3% of our wells during our current exploration phase but will monitor 5% to 10% of wells in our manufacturing phase.”
Pricing for the service has stabilized after declining over the last decade as new competitors entered the market. Participants in the Market Intelligence survey identified Halliburton subsidiary Pinnacle, who pioneered the process, as the No. 1 provider, followed by Schlumberger, Baker Hughes and Weatherford International. ESG Solutions and Trican Well Services complete the fifth and sixth slots in market share.
Service providers have added advanced interpretive software and 3-D modeling as part of the microseismic package to provide real-time value during the fracture stimulation process. Although the software and data interpretation raise the price of the service, these also increase the value for customers.
“We have seen a great improvement in the usefulness of the data since processing and analysis now happens in-house with the providers and can give real-time displays of the frack as it is happening,” said a Texas-based oil and gas operator.
Also helping is the fact that the Big Four well stimulation firms now bundle microseismic with other wellsite services.
“We brought prices down when we started competing as a package service provider instead of just doing the data processing,” one mid-tier microseismic service provider said. “Although competition brought prices down, they have stabilized now.”
- Move to pad drilling and batch completions to boost microseismic usage
- Microseismic market penetration expected to double to 10% of horizontal wells
- Service providers adding better software interpretation and 3-D modeling
- Service providers reducing costs by bundling microseismic with other wellsite services
- Barriers remain in pricing and misperceptions about effectiveness among customers
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