Synopsis

The third time is apparently the charm.

Midcontinent operators are coping with the current downturn by slowing horizontal work and increasing the number of vertical wells. Previously, surveys found the practice underway in the Permian Basin and the greater Rocky Mountain.

The trend is not huge statistically, but it continues to surface in Hart Energy regional surveys, including the Midcontinent.

Otherwise, operators have literally pulled back into a predictable shell of slickwater fracks, spacing between 200- and 250 feet, and plug and perf completions Some gel is used on occasion, but it is the exception that proves the rule as operators stick with the tried and true.

Sand volumes have stabilized at roughly 7 million pounds per lateral, as have the number of stages, and the spacing between stages, as mentioned previously.

The major trend involves the continued slowing of completions as operators face a low commodity price environment. While operators average four wells per pad, a large number of wells are completed as singles.

Market share for zipper fracks, which is a proxy for batch completions, has stayed unchanged since the October 2015 report at 52% of completions.

Several operators are delaying the completion of horizontal wells and focusing attention on less expensive vertical wells. Outliers include occasional use of sliding sleeves, some hybrid gel completions and experimentation with targeted cluster spacing between stages.

Watch for the next Midcontinent downhole completions report in April 2016.

Part I. –Survey Findings

Among Survey Participants:

  • Slickwater Completions Most Common
    [See Question 1 on Statistical Review]
    All respondents reported that slickwater is most common in the region, with two respondents reporting they use some gel on occasion. Respondents also said that drilling and completion of horizontal wells are slowing, but that vertical completions are growing.
  • No Changes Expected In Near-Term
    [See Question 2 on Statistical Review]
    ​All respondents expect few or no changes in the near- term. Sand volumes and methods are staying the same on horizontal wells, but the rate of completions is much slower.
    • Mid-Tier Provider: “The prospect for more operators to delay all new drilling and completions is growing as the oil price continues to drop. No method changes are expected at this point.”
  • Spacing Between Frack Stages Averages 220 Feet
    [See Questions 3a, 3b, 3c on Statistical Review]
    ​Spacing ranges between 200- to 250 feet in the play and averages about 220 feet, in line with the 219 feet reported in October. Seven of eight respondents have kept spacing about the same this year with one provider fracking only verticals now. All eight respondents reported using high sand volumes. Two reported some use of hybrid gels and one reported used a targeted clustering method as a way to fine-tune downhole completions.
    • Mid-Tier Operator: “We have seen few changes with our spacing. The only difference we are seeing is a growing percentage of vertical wells.”
  • 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 Midcontinent now. Only one respondent reported doing occasional sliding sleeve jobs.
    • Top-Tier Service Provider: “Plug and perf is definitely most common, but we occasionally see a sleeve job.”
  • Downhole Tools, Service Providers Oversupplied
    [See Question 5a and 5b on Statistical Review]
    ​Six of eight respondents reported that the number of downhole tool providers is excessive, but two said the number of providers is sufficient. No new downhole tools or methods are reported in the play.
    • Mid-Tier Operator: “There are no new tools in use. There are so many underutilized companies that competition has gotten fierce.”
  • Multi-Well Pads Average ~4 Wells Per Pad
    [See Question 6 on Statistical Review]
    ​The average number of regional wells reported per pad is about four. Reports ranged from three to six wells per pad in the region.
    • Mid-Tier Operator: “Three to six wells per pad is common, but they often are completely separate now.”
  • Zipper Fracks Account For 52% Of Completions; Solo Fracks Account For Remainder
    [See Question 7 on Statistical Review]
    ​The percentage of zipper frack completions reported among respondents is 52%, similar to the October report. The remaining 48% of wells are fracked using the solo frack on one well at a time and are common due to the slower pace of fracking activity.
    • Top-Tier Operator: “Zipper fracks are still commonly used, but solo completions are common as well as a growing percentage of vertical wells.”
  • 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 seven million pounds per well, slightly more than the 6.2 million pounds reported in October. Respondents reported 40/70, 100 mesh and 30/50 are most common. A total of 99% of proppant reported is natural sand and 1% is resin-coated sand still in use on jobs along with gel.
  • Horizontals Still Using Enhanced Completions, But Vertical Completions Are Growing
    [See Question 9a and 9b on Statistical Review]
    All respondents reported the continued use of enhanced horizontal completions methods, including high sand volume on current horizontal wells. However, several operators are delaying horizontal completions in favor of drilling and completing less expensive vertical wells. In addition, all respondents said that perf clusters are within the range of three to four sets per stage with none reporting an increase since six months ago.

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 Midcontinent region. Participants include six sales professionals with fracking service companies, a completions tool supplier and one chief executive office for an E&P company. Interviews were conducted during second week of January 2016.

Part II. – Statistical Review

Downhole Completions

[Midcontinent]

Total Respondents = 8

[Fracking service providers = 6, Completions tool supplier- 1, Operators = 1]

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

Slickwater:

8


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 spacing:

1

200- to 250-foot spacing:

7

Average spacing:

~220-feet


3c. How are you fine-tuning your frack program downhole? (Some respondents gave more than one answer.)

Large sand volume:

8

Some use of hybrid gels:

2

Some targeted clustering:

1


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

Plug and perf:

8


5a. Would you characterize the supply of downhole tools in your area as excessive or sufficient to meet early 2016 demand?

Excessive:

6

Sufficient:

2


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

Nothing new:

8


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

3-6 wells:

4

4 wells:

4

Average:

~4 wells per pad


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

Zipper Frack

Solo Frack

# Responses

60%

40%

2

50%

50%

3

75%

25%

2

0%

100%

1

Average 52%

Average 48%

8


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

3-4 million pounds:

4

6-10 million pounds:

7

Average per well:

~7 million pounds


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

Average Among Respondents

Natural sand* only:

99%

Resin-coated sand:

1%

*Sand usage: 100 mesh most common; 40/70 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?

All respondents said 100% of horizontal completions are enhanced by high sand volumes. There were still no reports of reduced sand volumes in horizontal wells, but there is a growing number of vertical completions to reduce costs.


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

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


End Statistical Survey