We have discussed how some companies are planning on drilling vertical wells to flesh out potential horizontal plays. My question is, how accurate would this method be? Can you extrapolate a potential horizontal's production from a vertical well?
There is no simple formula that an operator can use to take vertical production from an interval and extrapolate this to a potential 5000' horizontal (e.g. multiple by 6-7 to get hz EUR).
But the operator can learn a lot about the finding the optimum landing / target zone via vertical well testing and data collection (e.g. frac barriers, best P&P, etc.).
Of course, reservoir heterogeneity away from the vertical wellbore can complicate any horizontal to vertical relationships.
Earnest said:
We have discussed how some companies are planning on drilling vertical wells to flesh out potential horizontal plays. My question is, how accurate would this method be? Can you extrapolate a potential horizontal's production from a vertical well?
Rockman,
If vertical cannot really be extrapolated for horizontal, then what does the heat map released by Pioneer rely on? Isn't the data used to generate the heat map derived by samples from vertical wells? Sorry if it is a grammar school question and thanks as always.
A lot has gone into Pioneer's heat map - vertical completion results, TONS of core work, horizontal results, etc. Basically a highly integrated multi-faceted study that has gone thru the Pioneer "unconventional reservoir processor" to come up with the resultant map.
If at first you don't succeed........frack frack again.
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HOUSTON/WILLISTON NORTH DAKOTA Aug 20 (Reuters) - A fracking boom isn't enough for U.S. oil and gas producers - they're now starting the re-fracking boom.
Wells sunk as little as three years ago are being fracked again, the latest innovation in the technology-driven shale oil revolution. Hydraulic fracturing, which has upended global energy markets by lifting U.S. crude oil output to a 25-year high, has been troubled by quick declines in oil and gas output.
The development highlights how producers must constantly invest and tinker, both to raise overall oil recovery rates that can be as low as 5 percent and to limit steep drops in production suffered by wells drilled into tight oil deposits."
Earnest read an article like that in the Midland paper this weekend. I wonder where this is headed? Could you imagine if they refracked all of the Permians old wells? That would take decades.
Energen's Presentation from the Enercom 2014 Conference. Aug 18-19
We've been wondering the same thing, Craig. Old wells in blocks that sit above the shale plays and that are producing small amounts of gas only.... Will they be fracked?
Craig Wascom said:
Earnest read an article like that in the Midland paper this weekend. I wonder where this is headed? Could you imagine if they refracked all of the Permians old wells? That would take decades.
Depends in the formstion. Not all old wells and zones will respond favorably to new frac’ing.
Apache Corp: Shifting To Onshore Production For Good Reason
Shifting For Good Reason
One needs to look no further than the domestic resource base to see why Apache is quickly shifting focus from international growth to domestic growth. In total, the proved reserves from the North America resources sit at 1.7 Bboe with a total resource potential of an incredible 14 Bboe. The number is more impressive when focused on those resource potentials in mainly the Permian and Central Basins. Both basins account for roughly 5.5 Bboe of that resource potential. In addition, the two regions are closely located suggesting focuses on other areas isn't warranted....
http://seekingalpha.com/article/2441395-apache-corp-shifting-to-onshore-production-for-good-reason
Craig,
That article just goes to show how much we have yet to learn about the process. Hz Frac'ing is still basically in its infancy. I guess that just goes to show that holding on to minerals is usually the wisest choice, if not for today then for tomorrow.
http://www.enercominc.com/the-oil-and-gas-conference/webcasts/
Here are the webcasts from the Enercon Energy Conference. There are many different companies to choose from. LINN Energy, Diamondback, Approach etc etc.
Here are the supporting PDFs for each of the company's presentations.
http://www.enercominc.com/the-oil-and-gas-conference/downloads/
It's going to take a whle to pilfer through these hopefully some of yall will see if we can find some interesting tidbits.
Thanks for keeping the flow of information going
Earnest, A great find, thanks.
The service company scramble
Horizontal drilling tightens oilfield services market
...Baker Hughes was in the process of relocating 100 workers from Bakersfield, Calif., to the Permian Basin. And staffers of the Odessa Chamber of Commerce heard there might be more, up to 400. Company representatives did not confirm the higher figure, but the question remained...
http://www.oaoa.com/inthepipeline/article_4512fc1a-2b26-11e4-89e7-0017a43b2370.html
Not sure if this really adds anything to knowledge but it is nice to see all the numbers for some of the operators in the Midland Basin.
http://seekingalpha.com/article/2450065-bakken-update-diamondback-has-28-percent-upside
FYI.....
The Barclays Capital 2014 CEO Energy - Power Conference will be held on September 4.
Interesting reading for any mineral owner. Will the red margins in the shale OG industry finally turn to black?
http://www.cnbc.com/id/101954573
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The independent companies at the forefront of the U.S. shale boom will finally earn enough from selling oil and gas to cover their capital expenditures next year, for the first time since 2008.
Free cash flow, which measures operating cash flow minus capital spending, for the 25 leading independent oil and gas producers is expected to show a surplus of $2.4 billion in 2015, according to a consensus forecast in the Financial Times.
That compares with a shortfall of around $9 billion in 2013 and $32 billion in 2012. ("Shale oil and gas producers' finances lift growth hopes" FT, Aug 27)
During the years of negative free cash flow, independents relied on equity issues, borrowing and asset sales to sustain their drilling programs. That led some analysts to conclude the shale boom was unsustainable or even liken it to a Ponzi scheme, which will collapse when fresh capital inflows cease."
I also liked the article you shared Wednesday, Earnest.
"For doubters, the forecast of a small surplus in 2015, after deficits more than 20 times that amount between 2009 and 2013, does not dispel concerns about the long-term sustainability of the business model."
"It is not clear that the U.S. independents are profitable," Steven Kopits, managing director of Princeton Energy Advisers, wrote recently for Platts. "An industry can see a boom irrespective of profits or free cash flow if banks and investors are willing to underwrite the promises of future profits. The Internet bubble showed us that" ("Hamilton has it right on oil" July 30)."
"For doubters, the forecast of a small surplus in 2015, after deficits more than 20 times that amount between 2009 and 2013, does not dispel concerns about the long-term sustainability of the business model."
Earnest said:
Interesting reading for any mineral owner. Will the red margins in the shale OG industry finally turn to black?
http://www.cnbc.com/id/101954573
"
The independent companies at the forefront of the U.S. shale boom will finally earn enough from selling oil and gas to cover their capital expenditures next year, for the first time since 2008.
Free cash flow, which measures operating cash flow minus capital spending, for the 25 leading independent oil and gas producers is expected to show a surplus of $2.4 billion in 2015, according to a consensus forecast in the Financial Times.
That compares with a shortfall of around $9 billion in 2013 and $32 billion in 2012. ("Shale oil and gas producers' finances lift growth hopes" FT, Aug 27)
During the years of negative free cash flow, independents relied on equity issues, borrowing and asset sales to sustain their drilling programs. That led some analysts to conclude the shale boom was unsustainable or even liken it to a Ponzi scheme, which will collapse when fresh capital inflows cease."