Refracturing not yet a panacea for U.S. shale plays, but it may
account for as much as 11 percent of the market by 2020
Horizontal well refracturing technologies will likely remain a
niche market in the U.S. until significant technical and financial
risks can be reduced. That’s the finding of new research from IHS
(NYSE: IHS), which says this trend will continue despite
significant interest from both E&P and oilfield service
companies hoping the technology will reinvigorate drilling activity
in the U.S. onshore plays.
This Smart News Release features multimedia.
View the full release here:
http://www.businesswire.com/news/home/20150707005246/en/
By 2020, refractured wells will account for as much as 11
percent of horizontal wells fractured in the U.S., says the new IHS
Energy Insight Report, To Frac or Refrac: Prospects for
Refracturing in the United States from IHS, the leading global
source of critical information and insight.
The IHS report reviewed current horizontal refracturing
technologies and approaches, as well as economics and
effectiveness, then established baseline criteria and assessed the
future potential of the technology using primary intelligence,
rigorous research and proprietary data. IHS drew from two databases
as the foundation for its analysis -- from the IHS Energy U.S. Well
and Production database, which contains in excess of one million
wells, and from IHS Energy proprietary database of fractured
wells.
“In response to lower oil prices, E&Ps and service companies
in particular, have shown increasing interest in horizontal well
refracturing,” said Christopher Robart, managing director,
unconventional resources at IHS Energy, and the report’s lead
author. “However, while refracturing has potential to leverage
improved completion techniques to increase production while
avoiding drilling and facilities costs associated with a new well,
IHS research indicates there is a great deal of uncertainty about
the viability of large-scale refracturing that must first be
overcome.”
The IHS researchers examined the entire population of U.S.
onshore horizontal wells fractured since 2000 in an effort to
identify all refracturing operations. Through a robust search and
filter methodology, IHS researchers were able to identify nearly
600 horizontal wells refractured.
According to IHS, the Bakken has the greatest number of
refractured wells in U.S. plays, followed by the Barnett and
Marcellus plays. Unsurprisingly, the largest number of refractured
wells is located in the plays with the oldest wells.
Refracturing success, said IHS, as measured by comparing
refracturing initial production (IP) rates to original IP rates, is
mixed. With the exception of the Bakken wells studied, most
refractured wells have IP rates lower than the original IP rates.
The Bakken anomaly, noted IHS, is likely due to sub-optimal well
specifications chosen for the original completion (not surprising,
since the Bakken play was one of the early testing grounds for the
initial horizontal drilling and fracturing technologies that have
since been significantly improved).
Yet, due to the Bakken refracturing results, and some
over-performers in the Eagle Ford, IHS said, the overall average
refractured well IP is equivalent to 98 percent of the original
well IP. As for decline rates, the refractured wells had slightly
better 12-month decline rates than the original well completions
(refractured wells declined at a rate of 56 percent compared to 64
percent for original well completions).
According to the analysis, three refracturing techniques,
including diversion, coiled tubing (CT), or mechanical isolation,
were most often employed in the wells studied. However, each method
has benefits and limitations, and it is unclear which technique
will dominate in the future.
Refracturing costs vary widely by method and job size, IHS
noted, with the diversion method offering the lowest cost, but also
limited control. Conversely, mechanical isolation is the most
costly of the three approaches, due, in part, to increases in
surface and downhole costs. As for applying the refracturing
technologies, Robart said the popularity of refracturing will grow
if E&P companies gain more confidence in one or more techniques
and costs recede.
Due to the technical challenges, uncertainties and costs
associated with current refracturing methods, Robart said E&Ps
that have a better portfolio of new well prospects are likely going
to pursue those opportunities first, and save older assets for
later, when improved technologies make those wells a more
attractive investment for refracturing.
“The companies with superior acreage for new well development
are not presently the prime candidates for refracturing,” Robart
said. “Operators with less attractive assets will likely be more
interested in advancing this technology in the near-term.”
Said Robart, “Refracturing technology is in its infancy, and a
large-scale refracturing program is the most important step that
can be taken to advance it; however, most E&P operators are
cautious about investing significant capital before they see more
positive results from others first. To get better at something you
have to repeat it and refine processes—you have to experiment. What
refracturing needs now is a new innovator to step up, invest
capital, and take risks to refine the technologies and lower costs.
For refracturing to advance significantly, we need the next George
Mitchell to come forward.”
To speak with Christopher Robart regarding the IHS Energy
Insight Report: To Frac or Refrac: Prospects for Refracturing in
the United States,” please contact Melissa Manning at
melissa.manning@ihs.com. For information on the IHS Energy report
itself, please contact Cristian Muresan at
cristian.muresan@ihs.com.
About IHS
(www.ihs.com)
IHS (NYSE: IHS) is the leading source of information, insight
and analytics in critical areas that shape today’s business
landscape. Businesses and governments in more than 165 countries
around the globe rely on the comprehensive content, expert
independent analysis and flexible delivery methods of IHS to make
high-impact decisions and develop strategies with speed and
confidence. IHS has been in business since 1959 and became a
publicly traded company on the New York Stock Exchange in 2005.
Headquartered in Englewood, Colorado, USA, IHS is committed to
sustainable, profitable growth and employs more than 8,800 people
in 32 countries around the world.
IHS is a registered trademark of IHS Inc. All other company and
product names may be trademarks of their respective owners. © 2015
IHS Inc. All rights reserved.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20150707005246/en/
IHS Inc.Melissa Manning, +1
832-458-3840melissa.manning@ihs.comorPress Team+1
303-305-8021press@ihs.com
IHS (NYSE:IHS)
Historical Stock Chart
From Mar 2024 to Apr 2024
IHS (NYSE:IHS)
Historical Stock Chart
From Apr 2023 to Apr 2024