The recent drop in crude oil prices offers a new catalyst for operators to perfect well completion in an effort to remain competitive.

The price of Western Texas Intermediate (WTI) crude oil dropped in response to a mediocre global economy and a surplus of crude oil. The surge in oil production from North America has played a role in bringing forth this supply imbalance. Customizing completion technology on a play-by-play basis is an investment that may allow tight oil production to remain economically viable even under challenging economic conditions.

IHS estimates that 80% of potential gross U.S. tight oil capacity in 2015 has a break-even price of $50-$69 per barrel (bbl) of WTI. (Read the Unconventional Energy Blog.) While exploration and development of unconventional plays throughout North America is hindered by the drop in oil prices, the key to success for many operators can be found by fine-tuning completion operations. Such investments have proven to increase initial production rates which IHS forecasts is in line with an increased estimated ultimate recovery (EUR).

Super Frack

With the expectation that operators will focus on the development of new completion methods that increase production rates and boost returns, IHS finds that EOG Resources' “super frack” completion method ranks as one of the most likely shifts in technology to find universal acceptance.

Super-frack technology involves increasing the volume of proppant injected into wells during the stimulation process. IHS found that when EOG quadrupled the volume of proppant it was pumping, a positive correlation resulted with average peak month production rates. One lingering issue with super-fracks is whether the added cost of additional proppant is offset by enhanced well performance.

EOG increased the volume of proppant from around 0.4 million pounds of proppant per 1,000 lateral feet in 2012 to nearly 2.0 million pounds beginning with the last part of 2013. This has been done across the across the Bakken/Three Forks play in North Dakota and Montana. As the cost of additional proppant is offset by pad drilling techniques and self-sourced sands, the real win may be found if super-fracks can drive higher per-well EURs. Only time will tell if super-fracks is the right choice for many operators.

Super-fracks aren’t the only method being used to boost production rates. The Oil and Gas Inquirer found several operators boasting about viable and economical alternatives to the status quo. Examples include the implementation of higher density frack stages, switching from packed to cemented liners and drilling longer horizontals. By fine-tuning completion technology with these methods, operators reported that production rates not only were doubling, but that the number of failed frack stages fell by one-third in some fields.

Cemented Liners

In southeastern Saskatchewan, Crescent Point Energy Corp. has experimented with cemented liners over the past three years. Neil Smith, chief operating officer, says the shift in technology to cemented liners has allowed for a more precise positioning of each frack stage. With the enhanced ability to increase the number of stages being fracked in each well, he says an unexpected benefit was higher initial production rates and lower decline rates, the result of opening up more rock via fracking.

While cemented liners have allowed Crescent to increase production rates, its success also stems from what has not been put into the wells. Chief Financial Officer Greg Tisdale says that in line with the use of cemented liners, Crescent has balanced the amount of sand and water being pumped into the well, resulting in a water cost savings on the order of $100,000 per well.

Extended-Reach Wells

Meanwhile, Lightstream Resources Ltd and NCS Energy Services have sought to maximize production and minimize capital investment in the Cardium tight oil play by using long extended-reach wells and higher frack densities.

By drilling 1.5- to 2-mile-long horizontals and fracking anywhere from 30-60 stages, the cost per frack stage has decreased but not without challenges. While Lightstream continues to drill longer and longer horizontals, Rene LaPrade, senior vice-president and chief operating officer, says that fluid displacement can be a daunting task with extended-reach wells.

He says the challenge is not so much the actual distance of drilling as the completion technique on longer-reach wells.

Extended-reach horizontals is a completion method that has gained traction, and is yet another technology that may become more common. Given the tight margins operators face in the recent low-price environment, efforts to fine-tune completion techniques are likely to continue as operators learn from experience.