Synopsis

For the second time, Hart Energy Market Intelligence surveys has discovered operators opting for less costly vertical drilling vs. more expensive horizontal wells.

Now the switch to vertical is showing up in the greater Rocky Mountain market (the Rockies outside the Bakken Shale). Previously, surveys found the practice underway in the Permian Basin.

Beyond that, downhole completions in the greater Rockies are mostly unchanged in methodology.

Survey participants revealed an emphasis on slickwater, high volumes of proppant (mostly 100 mesh sand), and plug and perf.

Sand volumes averaged 8 million pounds per lateral (mostly 5,000 foot laterals with an average 31 stages). The volume shakes out to about 260,000 pounds of sand per stage with three to four perforation sets.

Stage spacing is below 200 feet and averages 170 feet among respondents in the current survey. Operators are averaging five wells per pad, but not all pad wells are drilled or completed currently because of low commodity prices.

The percentage of zipper fracks, which is a proxy for batch completions, dropped incrementally to 74% in the current survey vs. the 80% from survey respondents six months ago.

Judging by comments among survey respondents, $36 oil doesn’t work economically.

Watch for the next greater Rocky Mountain downhole completions update in July 2016.

Part I. – Survey Findings

Among Survey Participants:

  • Slickwater Completions Most Common
    [See Question 1 on Statistical Review]
    Five of eight respondents reported that slickwater is most common in the region and the other three respondents often use hybrid gel-type fracks as well. Respondents reported that drilling and completion of horizontal wells continues to be slow. However, vertical wells, as a percentage of the whole, are growing again.
  • 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, though the pace of activity has slowed.
    • Mid-Tier Provider: “The slow pace due to the low oil price is getting even worse here in the winter. It may be spring before we see any improvement in the region.”
  • Spacing Between Frack Stages Averages 170 Feet
    [See Questions 3a, 3b, 3c on Statistical Review]
    ​Spacing ranges between 125- to 250 feet in the play and averages about 170 feet, similar to the spacing estimate in the July report. Seven of eight respondents have kept spacing about the same this year with one provider reporting closer staging.
    • Mid-Tier Operator: “We have seen few changes with our spacing or sand volumes. We can still provide great fracks at these low prices, but even with good production—$36 oil is killing the incentive to drill.”
  • 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 Rockies now. No respondents reported any current sliding sleeve jobs.
    • Top-Tier Service Provider: “Plug and perf slickwater fracks with 100 mesh sand are the most common now.”
  • Downhole Tools, Service Providers Oversupplied
    [See Question 5a and 5b on Statistical Review]
    ​All respondents reported that the number of downhole tool providers is excessive. No new downhole tools or methods are reported in the play.
    • Mid-Tier Operator: “There are no new tools that we have seen. There are just too many companies still vying for the little remaining work at these prices.”
  • Multi-Well Pads Average ~Five Wells
    [See Question 6 on Statistical Review]
    ​Average number of regional wells reported per pad is about five, with ranges of three to six wells reported.
    • Mid-Tier Operator: “Four to six wells per pad is standard, but they don’t necessarily all get drilled and fracked as a batch anymore.”
  • Zipper Fracks Account For 74% Of Completions; Solo Fracks Account For Remainder
    [See Question 7 on Statistical Review]
    ​The percentage of zipper frack completions reported among respondents is 74%, slightly lower than the 80% reported in July. The remaining 26% of wells are fracked using the solo frack on one well at a time and are becoming common now due to the slower pace of drilling.
    • Top Tier Operator: “Zipper fracks are still commonly used, but solo completions are growing.”
  • 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 8 million pounds per well, similar to findings in July. Respondents reported 40/70, 100 mesh and 30/50 are most common. A total of 97% of proppant used on wells in the area is natural sand and 3% is ceramic.
  • Horizontals Still Using Enhanced Completion Techniques, But Verticals Are Growing
    [See Question 9a and 9b on Statistical Review]
    All respondents reported they continue to use enhanced completions methods on horizontal wells currently. However, several operators have delayed horizontals and have opted for drilling less expensive vertical wells.

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 Rocky Mountain region outside of the Bakken area. Participants include seven sales professionals with well service companies and one technical completions consultant for an E&P company. Interviews were conducted during first week of January 2016

Part II. – Statistical Review

Downhole Completions

[Other Rocky Mountain Areas – Outside of Bakken]

Total Respondents = 8

[Fracking service providers = 7, Operators = 1]

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

Slickwater:

5

Hybrid:

3


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:

7

Closer with some clients:

1


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

125-175-foot spacing:

5

175-250-foot spacing:

3

Average spacing:

~170 feet


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

Large sand volume:

8

Also using hybrid gels:

3


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 late 2015 demand?

Excessive:

8


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?

3-4 wells:

2

4-6 wells:

6

Average:

~Five wells per pad


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

Zipper Frack

Solo Frack

# Responses

60%

40%

1

80%

20%

2

75%

25%

5

Average 74%

Average 26%

8


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

8 million pounds:

4

6-10 million pounds:

4

Average per well:

~8 million pounds


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

Average Among Respondents:

Natural sand only*:

97%

Ceramic proppants:

3%

*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 no reports of reduced sand volumes in Rockies horizontal wells.


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

All respondents answered 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