Demand for pressure pumping services continues expanding in the Bakken Shale on the basis of more wells per pad, longer laterals, and rising stage counts. Demand for spot market pressure pumping work has tightened versus the second quarter 2014, according to participants in Hart Energy’s market intelligence survey program, while lead times are growing and operators face scheduling issues as a shortage of labor and housing for oilfield workers crimps the region’s rate of growth.

“We now have a need for at least eight weeks lead time to get any new work on the calendar,” a mid-tier service provider told Hart Energy market intelligence surveyors.

Survey respondents cited an installed base of 1.7 million in hydraulic horsepower (HHP) for pressure pumping equipment in the region, down from 1.9 million HHP in the May 2014 market intelligence survey. Previously, survey respondents had expected the base of regional installed HHP to increase. However, well stimulation service providers say some fleets had relocated to Texas in pursuit of higher margins during the current quarter. According to the North Dakota Industrial Commission, the backlog of drilled but uncompleted wells fell by 25 in June 2014 to approximately 585.

Service providers report average vertical depth of 9,652 feet in the Bakken with average horizontal length of 11,190 feet in the most recent survey, which was conducted at the end of August.

Stage count has increased to a range of 39 to 49 with operators employing spacing of 200-250 feet between stages with 250 feet reported as an unofficial standard. Service providers cited an average per-stage price of $87,500, which is expected to rise over the next 90 days. Several service providers said they have already begun bidding higher on all new work.

Stage costs are rising largely on growing volumes of crosslink gel and ceramic proppants in the Bakken. To date, service providers have successfully pushed through an average 10% increase in the price for pressure pumping services.

“With these extremely long laterals, we have some specialty plugs that are in wider use now,” noted a sales manager at a completions specialty company who participated in the survey. “The wireline services, dissolving balls and shadow plugs can add $10,000 per stage to the cost of a frack.”

Previous surveys of Bakken oil and gas operators and well stimulation service providers noted a strong move toward slickwater fracks. The current survey found some modification in that trend. Among survey participants, 54% reported using crosslink gel or hybrid fracks while the remaining 46% identified slickwater as the primary completion approach. The Bakken currently appears balanced between the two fluid conveyance systems.

One item of note was variable spacing in horizontal laterals with extended reach laterals witnessing wider spacing between stages in the outer reaches. Otherwise, plug and perf remains the predominant method of completion, though one fourth of service providers reported growing use of new sliding sleeves with cemented liners and multiple perforation sets within a stage.

“Standard sliding sleeves almost went out of use until the newer cemented liner sleeves were developed,” a mid-tier service provider told Hart Energy market intelligence surveyors. “There is growing use of these systems now with some clients.”

Operators have increased the number of wells per pad to an average of 6 versus four previously. Generally, multi-well pads in the Bakken range from four to eight wells per pad site versus four to six previously. The rise in the average number of wells corresponds to an increase in the use of zipper frack completions. Survey participants noted that zipper fracks represent 59% of completion work currently with stack, or solo, fracks, accounting for the remainder.

The Bakken features the highest use of ceramic proppants among tight formation oil plays domestically. Survey respondents noted that ceramics comprised 27% of proppant in the Bakken with bulk sand, primarily in grades 20/40 and 40/70, representing the remaining 73% of proppant volume. The average volume of proppant per well was pegged at 4.5 million pounds among market intelligence respondents, about the same as the prior survey in May.

Meanwhile, demand for drilling rigs has risen incrementally compared to the May 2014 Hart Energy market intelligence survey as the region hits its summertime stride. The main theme in the Bakken remains a steady ingress of newbuild rigs to replace older equipment. Consequently, few drilling contractors expect rig count to increase materially through yearend before the normal seasonal decline late in the fourth quarter.

“We focus on our people and the iron because we have a mechanical rig that is still holding records against newbuilds,” one regional driller said. “You would have a tough time selling me on new equipment being that much better. Don’t get me wrong, though. We’re building new AC rigs.”

Newbuild 1500 horsepower Tier I rigs are going for a base $28,000 per day versus $25,000 for existing 1500 horsepower Tier I units, and $23,000 for similarly-sized diesel electric SCR Tier II units, survey respondents told Hart Energy. Generally, survey participants identified rig pricing across the board as flat although it was possible for contractors to earn a premium for top quality equipment and crews.

Contact the author, Richard Mason, at rmason@hartenergy.com