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Energent Group: SPE Eagle Ford Completion Trends

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A 2012 Eagle Ford well completions review and presentation to the Society of Petroleum Engineers in Houston, Texas.

Are we at a peak in drilling activity? Do operators have the capital to continue investing heavily in the Eagle Ford? We believe that rig activity will flatten out but the drilling permits will continue to rise as new rigs come online that provide more pad and batch drilling capability.

What does the drilled but not completed inventory look like? La Salle county provides a great example of an area that has an increase in permits and rigs, yet completions continue to lag behind.

What is the well completion cycle time for Eagle Ford? Many operators are showing signs of reducing the drilling days and now there is evidence of several operators standardizing the well completion design and streamlining completion operations.

How does choke size relate to initial well performance? There are numerous operators using open chokes to perform a well test. Other operators are citing choke management practices to optimize the financial return of the well.

Energent Group reviews casing and proppant trends to give a holistic picture of completion trends in the Eagle Ford.

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Energent Group: SPE Eagle Ford Completion Trends

  1. 1. EAGLE FORD COMPLETIONS LOOKBACK SPE WESTSIDE, FEBRUARY 2013 Todd Bush 713.936.9290 todd.bush@energentgroup.com http://www.energentgroup.com
  2. 2. Agenda  About Energent Group  Observations and discussion items  Considerations for 2013  Questions and answers 2 Objectives:  Share information and trends in Eagle Ford data  Provide data for your next benchmarking project  Demonstrate relationships for points of interest in the well completions process
  3. 3. Observations & discussion items  Review concentration of permit activity and possible peak in activity based on trends 1  Interpret well completion activity that has low correlation to permit or rig activity where as permits and rigs have (0.8) strong correlation  Relate choke size to initial production to find patterns  Confirm anecdotal evidence for proppants; most frequent is 20/40 frac sand but others widely used  Discuss implications of typical casing sizes, which ranges from 4” – 9” for unconventional completions 3 2 3 4 5
  4. 4. Historical drilling permit activity 1 2 3 4 5 Gas Oil 4 Possible peak in drilling permits? Source: Data is from Texas RRC
  5. 5. Top 5 counties driving permit activity 1 2 3 4 5 5 Source: Data is from Texas RRC
  6. 6. La Salle, Karnes, & Webb lead strong Rig activity 6 Source: SmithBits Rig Count 1 2 3 4 5
  7. 7. How many wells drilled but not completed? 7 80 70 60 50 40 30 20 10 0 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Permits Rigs Completions Spotlight on La Salle  Permits increase by an average of 9% each month  46 Permits per month  18 Completions per month  Backlog growing by ~15 each month  Low correlation (0.2) between well completions and drilling permits and rig activity 1 2 3 4 5 Source: Data is from Texas RRC and SmithBits
  8. 8. New well completions dominate Q4 activity 1 2 3 4 5 8 COMPLETION ACTIVITY SUMMARY COUNTY OIL GAS IP RETEST TOTA L SHARE PCT La Salle 85 21 106 16% Dimmit 55 33 88 14% Karnes 60 22 82 13% McMullen 61 7 68 10% De Witt 24 23 47 7% RECLAS S TO INJ RECLASS TO GAS RECLASS TO OIL WELL UPDATE Deepening 1 1 - - - - New Well 653 - - - 1 511 Other 90 9 21 1 6 158 Plug back 1 2 - - - 5 Reentry 1 - - - - - TOP COUNTIES 70% OIL COMPLETIONS Gas Oil Source: Data is from Texas RRC in October through December 2012
  9. 9. Operators driving efficiency in Karnes county LEADING OPERATORS OIL IP’S BY CHOKE SIZE CHOKE SIZE COUNT AVG IP 8/64 17 514 14/64 11 782 12/64 9 910 11/64 7 512 16/64 4 765 1 2 3 4 5 Operators are under 30 day completion turn-around times and showing signs of reducing the variability in the process COMPANY COUNT PCT MIN DAYS AVG DAYS MAX DAYS STD DEV Marathon 31 22% 13 27 98 20.0 Murphy E&P 29 21% 2 23 64 18.4 ConocoPhillips 24 17% 14 21 31 4.7 Plains E&P 17 12% 4 27 87 19.2 EOG 12 9% 13 18 29 5.2 9 Choke size likely dictated by operator practices in the region Source: Data is from Texas RRC in October 2012
  10. 10. Choke size concentrated in 10-16/64 1 2 3 4 5 10 Distribution of Choke Size IP to Choke Size Bigger is not necessarily better. 10/64 -16/64 accounts for 47% of the total with 12” averaging 775 BOPD Source: Data is from Texas RRC in October through December 2012
  11. 11. 20/40 frac sand used more than all others Proppant Usage Across Counties 0 500 1000 1500 2000 11 20/40 40/70 10/20 12/20 16/30 30/50 18/40 50/50 14/30 16/40 40/60 Questions & Implications  What impact does proppant have on initial production and EUR?  Is there a strong correlation between the type of proppant and location or depth?  Is there enough data and evidence to suggest a ‘best practice’ or even a preferred practice? 1 2 3 4 5 55% 20% 22% Source: Data is from Texas RRC January 2011 to May 2012
  12. 12. Casing size data confirms anecdotal evidence 1 2 3 4 5 Top 10 Casing Sizes by Count Questions & Implications 12  Anecdotal evidence indicates 4” – 9” as typical for unconventional well; confirmed by data  Does 10 3/4” and 13 3/8” indicate trial well completion designs?  Is there evidence of a standard well construction in certain areas? Source: Data is from Texas RRC in October through December 2012
  13. 13. Observations & discussion items  Review concentration of permit activity and possible peak in activity based on trends 1  Interpret well completion activity that has low correlation to permit or rig activity where as permits and rigs have (0.8) strong correlation  Confirm anecdotal evidence for proppants; most frequent is 20/40 frac sand but others widely used  Relate choke size to initial production to find patterns  Discuss implications of typical casing sizes, which ranges from 4” – 9” for unconventional completions 13 2 3 4 5
  14. 14. Summary and considerations for 2013  Utilize permit trends as a leading indicator of rig activity systematically instead of on ad-hoc basis  Anticipate drilling programs to stay in place for 2013 unless there is sharp decline in commodity prices  Monitor well backlog (drilled not completed) to gauge efficiency of operators to get wells on production and to forecast servicing company revenue  Determine influencers of completions engineering to understand the preferred equipment and materials  Expect efficiency and cost drivers to lead operators to further integrate lean supply chain initiatives with partners 14
  15. 15. 15 ANALYTICS AND DATA SERVICES FOR UPSTREAM RESEARCH DATA SERVICES APPLICATIONS Executive Weekly Briefing Completions Activity Report O&G Data Subscriptions D&C and Well Dashboards Data Mining & Consulting Well Lifecycle

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