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Energent Group: Frac Sand Trends

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Texas proppant and frac sand trends. Does more sand really equal better wells? Energent Group takes a look at the frac sand data in Permian, Eagle Ford, and Granite Wash to identify key operators and trends.

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Energent Group: Frac Sand Trends

  1. 1. TEXAS PROPPANT TRENDS: MORE SAND = BETTER WELLS? Frac Sand Supply & Logistics Conference August 21, 2014 Todd Bush todd.bush@energentgroup.com http://www.energentgroup.com @EnergentGroup
  2. 2. ABOUT ENERGENT GROUP Energent Group is a boutique market research firm focused solely on our client’s needs for oil & gas data and research products. We help our clients identify top operators and peers in a play, discover sales opportunities, evaluate business line and market expansion, 2 and detect trends in the completion & frac supply chain.
  3. 3. OBSERVATIONS • Drilling “productivity” highest in Bakken with Eagle Ford following • Top operators focus on field development and efficiency improvements • Vertical and horizontal well strategies in the Permian Basin • Horizontal well focus in the Eagle Ford • Contrasting two key counties 3
  4. 4. 30% OF RIGS IN PERMIAN BASIN 4 558 199194 79 77 69 62 45 44 34 25 Industry continues shift (+205) to Horizontal
  5. 5. BAKKEN PER RIG PRODUCTION Source: EIA Drilling Productivity Report 5 0 900 100 950 1000 1050 500 1100 600 1150 200 300 400 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Permian EFS Bakken Niabrara Rigs
  6. 6. OBSERVATIONS • Drilling “productivity” highest in Bakken with Eagle Ford following • Top operators focus on field development and efficiency improvements • Vertical and horizontal well strategies in the Permian Basin • Horizontal well focus in the Eagle Ford • Contrasting two key counties 6
  7. 7. TOP 5 OPERATORS ACROSS TEXAS 7
  8. 8. EOG LEADING LOWER 48 8 Source: EOG Investor presentations EOG Activity YTD EOG averages 10 million pounds of frac sand per well in Eagle Ford
  9. 9. PIONEER’S PERMIAN FOCUS • Increasing horizontal rigs (5 to 16) while reducing vertical rigs (11 to 9) • Optimizing completions – Increasing clusters per stage – Increasing proppant per foot – Reducing fluid volume • 29% horizontal well completions this year 9 Pioneer Activity YTD
  10. 10. ATHLON SCALING UP IN PERMIAN • Scaling up oil manufacturing with 7,308 drilling locations • Vertical & horizontal strategy in Permian • 2% horizontal • 134,000 net acres • Active in Wolfberry Athlon Permian Activity YTD 10
  11. 11. EP ENERGY’S SUCCESS DRIVERS • Refining lateral placement & improving stimulation design • Utilizing resin-coated and white sand • Cycle time reduction • 100% horizontal in Permian and Eagle Ford 11 EP Energy Activity YTD Source: EP Energy’s investor presentations
  12. 12. OBSERVATIONS • Drilling “productivity” highest in Bakken with Eagle Ford following • Top operators focus on field development and efficiency improvements • Vertical and horizontal well strategies in the Permian Basin • Horizontal well focus in the Eagle Ford • Contrasting two key counties 12
  13. 13. PERMIAN BASIN TOP OPERATORS • Average oil IP’s are fairly consistent across operators • Sandridge and Chevron have 100% vertical activity • COG and Energen are outliers for gas IP’s 13 182 149 114 94 81 77 75 60 59 57 200 180 160 140 120 100 80 60 40 20 - 800 700 600 500 400 300 200 100 - Avg IP Gas (MCF) Avg IP Oil (BBL)
  14. 14. PERMIAN BASIN SAND USAGE Midland Basin Central Basin Delaware Basin 14
  15. 15. OBSERVATIONS • Drilling “productivity” highest in Bakken with Eagle Ford following • Top operators focus on field development and efficiency improvements • Vertical and horizontal well strategies in the Permian Basin • Horizontal well focus in the Eagle Ford • Contrasting two key counties 15
  16. 16. EAGLE FORD BASIN TOP OPERATORS • 99.6% horizontal completions • Rosetta having success with new gas wells • Carrizo using 8-15 million pounds of sand per well 16 263 174 117 76 72 60 58 56 44 36 300 250 200 150 100 50 - 3,500 3,000 2,500 2,000 1,500 1,000 500 - Avg IP Gas (MCF) Avg IP Oil (BBL)
  17. 17. EAGLE FORD SAND USAGE 17 Oil Window Gas Window
  18. 18. OBSERVATIONS • Drilling “productivity” highest in Bakken with Eagle Ford following • Top operators focus on field development and efficiency improvements • Vertical and horizontal well strategies in the Permian Basin • Horizontal well focus in the Eagle Ford • Contrasting two key counties 18
  19. 19. TOP COUNTIES TELL THE STORY 19 Andrews La Salle Well Completions 366 261 Oil IP24 Average (bbl) 86.8 905.3 Gas IP24 Average (mcf) 62.6 766.4 Water IP24 Average (bbl) 360.8 1129.6 Frac Sand Average (lbs) 277,685 9,255,944 Sand Volume (MM lbs) 69 1,073 Horizontal (%) 7% 99% Oil (%) 100% 95%
  20. 20. OBSERVATIONS • Drilling “productivity” highest in Bakken with Eagle Ford following • Top operators focus on field development and efficiency improvements • Vertical and horizontal well strategies in the Permian Basin • Horizontal well focus in the Eagle Ford • Contrasting two key counties 20
  21. 21. CLOSING THOUGHTS • Identify who is issuing horizontal permits in areas near or adjacent to successful operators or wells • Determine operators taking manufacturing approach using pad drilling to quantify sales opportunities • Assess well and frac sand locations for strategic planning efforts • Monitor upcoming “re-frac” market as opportunity to win business • Expect down-spacing and field development to continue at this pace through Q4 2014 21
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