Synopsis

At first glance little has changed in Permian Basin completion practices, particularly in a commodity price environment that places an emphasis on reduced costs.

Basically it’s slickwater, stage spacing of 250 feet and plug and perf completions in a majority of instances, a story that is not far out of alignment with what’s happening elsewhere in unconventional plays.

However, nuanced changes are underway. The first is experimental work on refracks in the Permian Basin. The process is still in the testing stages and involves a new technological wrinkle. That said the market share of refracks remains low.

A second theme involves the continuing decline in zipper fracks as a percentage of the marketplace. That share fell to 42% of wells among those surveyed—a significant drop over the last 90 days from the 56% reported in the last Permian Basin downhole survey.

Zipper fracks are a proxy for batch completions and this suggests the backlog of drilled but uncompleted (DUC) wells continues rising in the Permian. The basic story is that completions continue, but at a much slower rate and are done one well at a time.

Proppant use remains high at 7.9 million pounds per lateral on average, down incrementally from the 9 million pound average 90 days ago.

The drop likely reflects interview sampling weighted to a different area of the Permian Basin. That switch in sampling location also revealed a growing component of vertical wells, which represent 26% of wells drilled among survey respondents versus the 74% that employ enhanced completion technology.

Watch for the next Permian downhole report in March 2016.

Part I. – Survey Findings

Among Survey Participants:

  • Slickwater Dominates Completions
    [See Question 1 on Statistical Review]
    All eight respondents reported that slickwater is most common in the Permian Basin, same as in earlier reports. Two respondents also mentioned using gel and ceramics on some jobs.
  • No Changes Expected In Near-Term
    [See Question 2 on Statistical Review]
    All respondents expect few changes in the near term. All reported the same methods are in use and few changes are expected until market conditions change.
    • Mid-Tier Provider: “Few changes are expected with methods unless an efficient low-cost breakthrough happens. Few are spending anything extra in this environment.”
  • Spacing Between Frack Stages Averages ~245 Feet
    [See Questions 3a and 3b on Statistical Review]
    ​Spacing ranges between 200- to 300 feet in the play and averages about 245 feet. One respondent reported sliding sleeve stages are spaced at an average of 112 feet. All respondents have kept spacing about the same this year.
    • Mid-Tier Operator: “We see most operators keeping their spacing and volumes pretty constant during the quarter.”
  • Plug And Perf Most Common Fracking Technique
    [See Question 4 on Statistical Review]
    ​All respondents reported that plug and perf completions are the standard fracking technique in the region. One company specializes in sleeve technology and continues to have a few customers completing wells with their system.
    • Mid-Tier Service Provider: “Plug and perf slickwater fracks continue to be most common and consistent here.”
  • Downhole Tools, Service Providers Oversupplied
    [See Question 5a and 5b on Statistical Review]
    ​Five of eight respondents reported an oversupply in the number of downhole tool providers. Three others believe there is sufficient supply. Two respondents mentioned that new refrack tools are in use or in trial in the region.
    • Mid-Tier Operator: “There are not any totally new tools in use. However, there is a refrack tool by one provider being used and another is in a redesign/testing phase by a major provider for refrack jobs.”
  • Multi-Well Pads Average Four Wells
    [See Question 6 on Statistical Review]
    ​Average number of regional wells reported per pad is about four. Reports range from three to four well pads in the region.
    • Mid-Tier Operator: “Some use bigger well pads, but we commonly see the use of three to four well pads. We are seeing many one-at-a-time completions now.”
  • Zipper Fracks Account for 42% of Completions; Solo Fracks Account for Remainder
    [See Question 7 on Statistical Review]
    ​The percentage of zipper frack completions reported among respondents is 42%, down from 56% in the September report. The remaining 58% wells are fracked using the solo frack on one well at a time and have become commonplace during the industry downturn.
    • Mid-Tier Operator: “At our current slow pace, we are completing most wells one at a time.”
  • 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 7.9 million pounds per well, down from about 9.1 million in the September report. Respondents reported 40/70, 30/50 and 100 mesh are most common. A total of 95% of proppant used is natural sand. Ceramics still account for the remaining 5%, which were mentioned by two respondents.
  • Enhanced Completions: 74% Of Total Frack Jobs
    [See Question 9a and 9b on Statistical Review]
    All respondents reported that horizontal completions always involve enhanced methods currently, which include the use of high sand volumes and three to four perf sets per stage. The remaining 26% of completions are traditional vertical fracking jobs, according to two respondents.

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 seven sales professionals with well service companies and one completions manager for E&P company. Interviews were conducted during third week of December 2015.

Part II. – Statistical Review

Downhole Completions

[Permian Basin]

Total Respondents = 8

[Fracking service providers = 7, Operators = 1]

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

Slickwater:

8

Some use of gel:

2

(Some respondents gave more than one answer.)


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- to 300-foot spacing:

7

100- to 125-foot spacing (sleeves):

1

Average spacing:

~245 feet


3c. How are you fine tuning your frack program downhole?

Large sand volume slickwater:

6

Use of gel and ceramics on some jobs:

2


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

Plug and perf:

7

Sliding sleeve:

1


5a. Would you characterize the supply of downhole tools in your area as excessive, sufficient or insufficient to meet late 2015 demand?

Sufficient:

3

Excessive:

5


5b. Are there any new downhole tools being tried in your area?

Nothing new:

6

Refrack tools in use or trial:

2


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

3-4 wells:

6

Average:

~4 wells per pad


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

Zipper Frack

Solo Frack

# Responses

0%

100%

1

75%

25%

1

60%

40%

2

50%

50%

2

Average 42%

Average 58%

6*

*Two companies report completing vertical wells only.


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

5-10 million pounds:

6

10-15 million pounds:

2

Average per well:

~7.9 million pounds


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

Average Among Respondents

Natural sand only*:

95%

Ceramic proppants:

5%

*Sand Usage: 40/70 most common, 100 mesh second most common and 30/50 common.


9a. Looking at the entirety of completions in your area, how many would you estimate to be “enhanced completions?” How would you best describe what an “enhanced completion” entails in your area?

Enhanced completions*:

74% of total

Traditional completions**:

26% of total

*Enhanced completions require high sand volumes in horizontal laterals.

**Some respondents reverting back to traditional, vertical-only completions.


9b. How many perf clusters are typical between stages? Is that more or less than six months ago?

All respondents said that perf clusters fall within a range of three to four sets per stage with none reporting an increase over six months ago.


End Statistical Survey