By July 15, 2016 Read More →

Permian Basin: Big potential for unconventional technologies to boost shale recovery

“Tight conventional plays in Texas, including Permian Basin and Eagle Ford fairway, also fared well, in terms of potential for redevelopment,” said Trammel.

potentialHOUSTON – A new study indicates there is significant upside potential for US oil and gas operators to apply lower-cost unconventional drilling and completion technologies to boost production from tight conventional reservoirs, according to analysis from IHS Markit.

The new IHS Markit Energy study, Horizontal Drilling in US Tight Conventional Plays, is based on the assessment of nearly 46,000 US horizontal wells completed between 2010 and 2015.

It studies how the unconventional drilling and completion technologies could be applied to the redevelopment of conventional wells in the top 39 established US tight conventional plays where the major shale plays are also being developed.

“Our IHS Markit research indicates that there are significant potential benefits of applying some of the same drilling and completion techniques that have been used so successfully in the US shale oil plays to increase recovery in these tight, US conventional plays,” said Steve Trammel, director of North America well and production content at IHS Markit Energy.

The key plays identified in the IHS Markit study that have potential to better leverage the horizontal technologies include the Rocky Mountain region (Williston, Powder River and Denver basins), the Permian basin and Eagle Ford play fairways in Texas, and the mid-continent region, including the Anadarko basin.

According to IHS Markit, the average global recovery factor for a conventional oil reservoir is 34 per cent, with two-thirds of the oil still left behind in the ground.

“We identified tight conventional plays that were tested with horizontal wells during the last five years, and in our study, which analyzed nearly 46,000 U.S. horizontal wells completed between 2010 and 2015, average initial potential test rates for the leading tight conventional plays compare favorably with the IPs of established shale oil plays,” said Trammel.

“However, of the horizontal wells we analyzed, just 10 per cent of the horizontal wells drilled were in tight U.S. conventional plays, so there is considerable potential here for operators.”

Many tight conventional oil reservoirs demonstrate recovery factors of only 15 per cent or less, which is substantially lower than the average recovery factor for conventional reservoirs.

“These tight conventional resources are in reservoirs with older vertical wells that can be re-entered by horizontal drilling. The rock properties do not require the size and cost of a hydraulic frack job needed for an unconventional zone, and therefore these are much more economic for operators in the current low oil price environment,” said Trammel.

Leveraging these technologies is attractive to operators because the overall break-even costs to develop these projects are much lower and delivery infrastructure is already in place according to IHS.

“The plays in the Rocky Mountain region, in particular have the majority of the highest-ranking tight conventional plays of those we studied in our report. But tight conventional plays in Texas, including the Permian Basin and Eagle Ford fairway, also fared well, in terms of potential for redevelopment,” said Trammel.

Leveraging horizontal wells to further test tight conventional plays in these areas has led to the establishment of stacked plays with huge resource potential.

“Our analysis identified 25 tight conventional ‘sleeper’ plays that have been tested with only a few horizontal wells, but have average IP rates greater than 200 boe/d. In addition, shallow conventional plays may also offer opportunities for operators to leverage these unconventional technologies in the current oil price environment,” said Trammel.

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