Abstract
Refracturing Revolution
As shale operators look for ways to survive amid the current downturn in oil prices, accelerating the refracturing of older horizontal wells is turning into one of the most attractive options. In years past, when oil prices were significantly higher, the more accepted proposition was to drill and complete new wells to increase production, book new reserves, and hold onto leases.
However, since late last year, the equation has been turned on its head. In many oil-rich plays, companies are realizing that refracturing is the more budget-friendly way to achieve cash flow. Compared with the USD 8 million to USD 16 million needed for a new well, most refracture jobs are reported to cost from USD 1 million to USD 3 million. In a well where all of the sunk costs have been recovered, the extra production and incremental reserves from refracturing can net several million dollars of added profit.
Tim Leshchyshyn, founder of FracKnowledge, said the current low-price market environment has become the biggest driver for companies to reinvest in their old oil wells. One operator that his company tracks is so sold on the idea that it is considering refracturing 500 to 1,000 wells this year.
“Refracturing is what everybody is banking on,” he said. “It is the thing they are trying to get figured out because there are going to be a lot of wells to do.” As operators and service companies climb their way up the learning curve, they are trying to determine which wells to refracture, which ones to bypass, and which plays it will work best in.
Only a few unconventional producers have published the results of their refracturing programs in oil-rich plays, and many others do not acknowledge having such programs at all. But there are years’ worth of case studies from gas-rich plays such as the Marcellus, Haynesville, and the Barnett, the birthplace of unconventional shale development, that indicate refracturing can be successfully applied in the oil-rich plays as well.
Mike Vincent, an independent consultant, is seeing unprecedented demand from operating companies for his courses on how, why, and where to do refracturing. While eager to learn all they can about refracturing, many of his clients are reluctant to discuss the topic publicly. “I think there are multiple reasons why there is radio silence right now,” Vincent said.
Companies still unsure of the success rate of refracturing may be trying to avoid overselling its potential to investors. Others are certain that it works quite well, Vincent said, but are staying quiet for competitive reasons, which includes the desire to buy out other operators’ offset wells and refracture them.
Publisher
Society of Petroleum Engineers (SPE)
Subject
Strategy and Management,Energy Engineering and Power Technology,Industrial relations,Fuel Technology
Cited by
7 articles.
订阅此论文施引文献
订阅此论文施引文献,注册后可以免费订阅5篇论文的施引文献,订阅后可以查看论文全部施引文献