In the Battle Against Frac Hits, Shale Producers Go to New Extremes

Abstract

A new plan has been put to work in the Permian Basin’s remote but resource-rich swath of land shared by Texas and New Mexico. Its objective can be reduced to this simple idea: protect neighboring horizontal wells from each other by drilling and completing them at the same time.  Most in the shale business know these projects as “cube developments.” Their scope of work has moved operators away from developing wells one at a time to a half dozen or more at a time. Each cube project is done from supersized well pads that host four to six rigs, two pressure pumping fleets, and hundreds of people every day. From the surface perspective, these onshore megaprojects are delivering much needed economies of scale on everything from sand and water to parts and labor. However, the bigger motivation lies deep in the ground. That is where shale producers have been battling poor production results for years because of frac hits between older and newer wells, often referred to as “parent” and “child” wells. The root of this complex problem lies in the fact that a child well’s hydraulic fractures often follow the path of least resistance into a reservoir’s most resource-depleted zones, rather than to areas containing the best reserves. In some parts of the Permian, the effect has caused child wells to deliver a 30% lower recovery rate than their parents (when factors such as well lengths are normalized). When such production shortfalls are felt fieldwide, the losses are measured in millions of dollars per day. The point of cube developments is to put an end to this cycle by creating only parent wells. Thinking Inside the Cube Occidental Petroleum began implementing its own version of the cube approach—called “optimized sequenced development”—last summer at its Greater Sand Dunes project in New Mexico. This year, the Permian stalwart says new wells brought on line there have turned in “basin-leading” peak 30-day rates that averaged around 3,100 BOE/D. The Houston-based firm’s approach relies on a strong understanding of geomechanics to sequence the drilling, completion, and eventual flowback of multiple wells to mitigate frac hits. This allows some wells to be produced, while others nearby are still being drilled or hydraulically fractured, said Oscar Quintero, the president and general manager of Oxy’s Permian assets in New Mexico. If done correctly, and critical rock properties are entered into the equation, then “you have vertical isolation, and you have horizontal isolation” of each well’s hydraulic fracture growth, said Quintero. “So, by design, we are avoiding the impact of frac hits.” This succinct outline of the high-density approach boils down a long list of subsurface nuances, ones that remain an intense area of study for the shale sector. Understanding them helps explain why Oxy and a growing number of its peers would go to the lengths of drilling so many wells simultaneously.