Synopsis

Sand use and proppant volumes are rising in the Permian as operators push lateral length in the Delaware Basin.

Operators appear to be de-emphasizing Bone Spring targets in Lea and Eddy counties, N.M., and emphasizing Wolfcamp Shale targets utilizing longer laterals in Culberson, Loving, and Reeves counties, Texas.

Otherwise, operators remain committed to slickwater plug and perf for the time being as the most cost effective way to convert hydrocarbon reserves to production.

In some cases sand volume has increased to 16 million pounds per lateral, or more than 1,800 pounds per linear foot on extended reach laterals.

Overall, sand use grew to 12.5 million pounds per lateral in Hart Energy’s Heard In The Field survey. This is a sharp jump vs. 90 days ago among survey participants.

Other than rising sand volumes and an increase in linear gel for longer laterals, completion techniques remain similar to the last survey 90 days ago.

The preferred recipe overwhelmingly involves slickwater plug and perf on stage spacing of 200 feet to 250 feet with four perforation clusters and anywhere from 1,200 to 2,000 pounds per linear foot of sand as proppant.

Survey respondents anticipate a return to batch completions as the industry recovers. Indeed, zipper fracks grew from 35% of completions 90 days ago to 41% in the current survey and are expected to rise as a share of completion activity if commodity prices hold firm.

Watch for the next Heard In The Field report on the Permian Basin downhole completions market in September.


Part I. – Survey Findings

Among Survey Participants:

  • Slickwater Completions Most Common
    [See Question 1 on Statistical Review]
    ​Six of eight respondents reported that slickwater is most common in the region and two consultants use gel with on wells with a high volume of sand needed.
    • Mid-Tier Operator: “The most common completion now is slickwater and 100 mesh and 30/50 white sand. Some operators have increased to 16 million pounds of sand per lateral.”

 

  • No Changes Expected Near-Term
    [See Question 2 on Statistical Review]
    ​All respondents expect few or no changes in the near term. Sand types and methods are reportedly staying the same on horizontal wells in the Permian. However, there were several mentions of sand volumes increasing again.
    • Mid-Tier Provider: “There have been very few changes except for some adjustments in sand volumes.”

 

  • Spacing Between Frack Stages Averages 209 Feet
    [See Questions 3a, 3b, 3c on Statistical Review]
    ​Spacing ranges between 200 feet to 250 feet in the play and averages about 209 feet, slightly lower than the average 250-foot spacing reported in March. Most reported the same spacing of about 200 feet to 250 feet with three to four perf sets per stage.
    • Mid-Tier Operator: “We now average 40 stages with 400,000 pounds of sand per stage. Some linear gel is used by a few operators to help the formation take it. Results have been good.”

 

  • Plug And Perf Most Common Fracking Technique
    [See Question 4 on Statistical Review]
    ​Seven of eight respondents reported that plug and perf completions are the standard fracking technique in the Permian Basin now. One respondent reported using sliding sleeves with several clients who do coil fracks.
    • Top-Tier Service Provider: “The plug and perf slickwater frack is most common now. There are a few operators who alternate between plug and perf and sliding sleeve fracks, but there’s not too much of that now.”

 

  • Refrack Very Small Percentage Of Overall Work
    [See Question 5a and 5b on Statistical Review]
    ​Respondents reported that the actual implementation of refrack is limited. Halliburton Co. (NYSE: HAL) is reported as the doing largest volume of refrack and remedial stimulation in the play.
    • Mid-Tier Operator: “Halliburton has maintained top market share in both new wells and remedial work. I often feel like they are giving work away at a loss in a bid situation with them.”

 

  • Multiwell Pads: Average ~5 Wells
    [See Question 6 on Statistical Review]
    ​Average number of wells reported per pad is about five. Reports ranged from four to six wells per pad in the region.
    • Mid-Tier Operator: “Four to six wells per pad is common. Many pads are set up for additional wells in the future.”

 

  • Zipper Fracks Account For 41% Of Completions; Remainder Solo Fracks
    [See Question 7 on Statistical Review]
    ​The percentage of zipper frack completions reported among respondents is 41%, up slightly from the 35% reported in March. The remaining 59% of wells are fracked using the solo frack on one well at a time and are presently common due to slower pace.
    • Top-Tier Operator: “As operators begin to attack the DUC backlog, the use of zipper frack will go way up. It saves about 15% on multiwell fracks.”

 

  • Sand Remains Most Common Proppant
    [See Question 8a and 8b on Statistical Review]
    Natural sand is reported as the most common proppant in the region and averages about 12.5 million pounds per well, up from 8.8 million pounds per well reported in March. A total of 100% of proppant reported is natural sand in the Permian Basin.

 

  • Four Perf Sets Per Stage Most Common
    [See Question 9a and 9b on Statistical Review]
    Most respondents reported an average of four perf sets per stage with enhanced horizontal completions methods currently and little expectation of change. The average number of perf sets has remained at four sets per stage for at least six months.

                                                                        End Survey Findings

Survey Demographics

H A R T E N E R G Y researchers completed interviews with eight industry participants in the downhole completions segment in the Permian Basin. Participants include four sales professionals with frack companies, one downhole tool and coil tubing company and three consultants or representatives for E&P companies. Interviews were conducted in early-mid June 2016.

Part II. – Statistical Review

Downhole Completions

[Permian Basin]

Total Respondents = 8

[Fracking service providers = 4, Downhole coil provider = 1, Operators = 3]

1. What common practices are used in your area for completions?

Slickwater:

6

Crosslink Gel:

2*

*Some respondents use linear gel to facilitate larger sand volumes for some clients.


2. Do you see that changing over the next three to six months?

No changes expected:

8


3a. Is spacing between stages closer now than a year ago?

Same:

8


3b. What is the average distance between frack stages in your area?

200-foot to 225-foot spacing:

6

226-foot to 250-foot spacing:

2

Average spacing:

~209 feet


4. What fracking technique is most common in your area?

Plug and perf:

7

Sliding sleeve:

1


5a. Looking at the number of total frack jobs in your area, what percentage are new fracks and what percentage are refracks?

New wells average:

99%

Remedial average:

1%


5b. Which fracking company in your area is doing the most new frack work?

Halliburton:

8


5c. What company is doing the most refracks in your area?

Halliburton:

8


6. What is the average number of wells being completed per pad in your area?

4 wells:

1

5-6 wells:

7

Average:

~5 wells per pad


7. What percentage of fracks drilled from pads are zipper fracks vs. individual fracks?

 

Zipper Frack

Solo Frack

# Responses

30%

70%

2

40%

60%

3

50%

50%

3

Average 41%

Average 59%

8


8a. How much proppant (in pounds) are you using per well?

8-12 million pounds:

2

12-16 million pounds:

6

Average per well:

~12.5 million pounds


8b. On a percentage basis, how much proppant in your area is used by type?

 

Average Among Respondents

Natural sand only:

100%


9a. How many perf clusters are typical between stages?

Range:

3 to 5 sets

Average:

4


9b. Is that more or less than six months ago?

Same:

8


                                                                        End Statistical Survey