Synopsis

In a sharp contrast to prior nationwide surveys, Permian service providers are reporting rising interest in the use of resin-coated sand and/or ceramics in conjunction with slickwater to increase production. Previously ceramics had lost market share because of sticky pricing in a down market coupled with a secular shift in completion strategy among operators to focus exclusively on net present value, which favored bulk commodity sand, as opposed to boosting estimated ultimate recoveries where ceramics have a clear edge. Still, bulk commodity sand represents 88% of completions, according to Permian survey respondents. Average sand volumes per well came in at 7 million pounds per well, significantly lower than the March 2015 report. However, the March report focused on the Bone Spring in the Delaware Basin while this report focuses more on Wolfcamp drilling in the Midland Basin. Meanwhile, one downhole tool provider noted an increase in customers for sliding sleeves in June 2015 despite a flat completions market overall, suggesting a modest rise in market share for sleeve technology. Service providers are reporting an average of three wells per pad, though operators are only drilling one or two currently because of the downturn. Zipper frack methodology grew to 56% of completed wells versus 46% in the March 2015 survey. Service providers report an increase in the number of drilled but uncompleted wells as the second quarter comes to a close. Watch for the next Permian Basin downhole update in September 2015.

Part I. – Survey Findings

Among Survey Participants:

  • Slickwater Continues As Main Fracking Method
    [See Question 1 on Statistical Review]
    All respondents reported slickwater dominates their fracking practices. In the current environment, less expensive slickwater continues to be favored, but there were surprising mentions of a growing interest in resin- coated sand and ceramic for production enhancement.
    • Mid-Tier Service Provider: “While operators prefer slickwater for low cost, some are using resin or ceramic to enhance production results.”
  • Little Change Expected In Upcoming Completions
    [See Question 2 on Statistical Review]
    ​All respondents expect to see little change as operators seem to be making few changes to Permian horizontals and the use of slickwater. Completion delays may be slowing, however.
    • Completions Consultant: “We still see much fewer wells drilled, but delaying fracks has many concerned about the backlog. Hopefully, delayed fracking will end soon.”
  • Spacing Varies Between Technique Practices
    [See Questions 3a, 3b, 3c on Statistical Review]
    ​Spacing ranges between 100 feet to 300 feet in the play. Standard plug and perf fracks average 275 feet between stages. One respondent said sleeve technology provides a more pinpointed and accurate frack and those clients who have tried it continue to use the method with good results. Spacing in wells using sleeves ranges from 100 feet to 150 feet.
    • Mid-Tier Service Provider: “Spacing remains constant with most operators based on whether the preferred method is plug and perf or sliding sleeve.”
  • Plug And Perf Most Common Fracking Technique
    [See Question 4 on Statistical Review]
    ​Most respondents reported that plug and perf completions are the most common fracking technique in the Permian. However, five of the eight respondents do both plug and perf and sliding sleeve technology. One sleeve supplier said his company added three new clients for the technology this month (June 2015). This implies the percentage of wells completed with sleeves is growing as a percentage of total completions.
    • Completions Supplier: “We added three new clients using our sleeves this month. Our costs are coming down about even with traditional fracks.”
  • Downhole Tools, Service Providers Excessive
    [See Question 5a and 5b on Statistical Review]
    ​Five respondents reported that the number of downhole tool providers is oversupplied within the region. No new tools or methods were reported among these respondents.
    • Oil Operator: “With the total number of wells down, there is an oversupply of all providers, but in a recovery that will change rapidly.”
  • Multi-Well Pad Use Continues
    [See Question 6 on Statistical Review]
    The average number of wells per pad reported continues to range between three and four wells per pad. The rate at which a pad is drilled completely has slowed as operators conserve budgets.
  • Zipper Fracks Account For About Half Of Completions Among Respondents Using Standard Methods
    [See Question 7 on Statistical Review]
    The percentage of zipper frack completions among respondents averages about 56%; the remaining 44% of wells are fracked individually.
  • Natural Sand Reported As Most Common Proppant; News Of Increased Use Of Resin-Coated Sand And Ceramics Emerges
    [See Question 8a and 8b on Statistical Review]
    Natural sand is still reported as the most common proppant in the region and averages about 7 million pounds per well among respondents. Respondents reported 40/70, 30/50 and 100 mesh sand are all common. Natural sand is used as the key proppant for 87% of wells reported. While sand is still the main proppant of choice, respondents indicated a revived interest in using resin-coated sand on 3% of wells and with the remaining 9% attributed to ceramic use.

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 service segment in the Permian Basin area. Participants included three frack consultants, two frack supplies salesmen, one oil operator and two managers or sales persons with well service companies. Interviews were conducted during the third week of June 2015.

Part II. – Statistical Review

Downhole Completions

[Permian Basin]

Total Respondents = 8

[Completion Consultants = 3, Frack Equipment Suppliers = 2,
Frack Service Providers = 2, Oil 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 spacing: 8*
*Spacing between stages decreases for sliding sleeve fracks since more, but smaller stages are utilized.

3b. What is the average distance between frack stages in your area?
Spacing Plug & Perf Sliding Sleeves
250-ft.: 1 —
250-300-ft.: 4 —
300-ft.: 1 —
100-ft.: — 1
100-150-ft.: — 2
100-125-ft.: — 2
Average: ~275-ft. ~113-ft

3c. How are you fine-tuning your frack program downhole?
Sliding sleeves with coil tubing: 1
Slickwater w/heavy loading of sand for each stage: 2
Ceramics: 1
Resin-coated sand and coil fracks: 1
No real changes: 3

4. What fracking technique is most common in your area?
Plug and perf only: 3
Both plug and perf and sliding sleeve: 5

5a. Would you characterize the supply of downhole tools in your area as excessive, sufficient or insufficient to meet early 2015 demand?
Excessive: 5
Sufficient: 3

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?
2-3 wells: 3
3 wells: 3
3-4 wells: 2
Average ~3 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
75% 25% 1
50% 50% 5
Avg. 56% 44% 8

8a. How much proppant (in pounds) are you using per well?
3-6 million lbs 2
7-10 million lbs: 6
Average per well: ~7 million pounds*
*This report shows lower volumes than previous Bone Spring wells.

8b. On a percentage basis, how much proppant in your area is used by type?
Average Among Respondents
Natural sand* only: 88%
*Respondents reported 100 mesh, 30/50, and 40/70 sand most common
Resin-coated sand preferred: 3%
Premium ceramic 9%

End Statistical Survey