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Refrac conference opening remarks

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Opening comments for refrac conference. Technology continues to improve!

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Refrac conference opening remarks

  1. 1. 1 Phil Winner* philpw@msn.com www.linkedin.com/in/philwinner * Reservoir optimization - M&A evaluations - Exploration risk assessment
  2. 2. 2 Overview • Topics • Case Studies • Economics • Reserves: Acceleration vs Incremental • Selection Criteria • Benefits • Increase professional skills and knowledge • Our conference: Collaborative exchange of ideas • Networking Strong speaker profiles Halliburton, CONSOL, BNK, BP, Alberta Innovates, Petro Lucum, Tracerco, Thru Tubing Solutions, UT Austin New Pilots and Results Marcellus examples Well selection criteria Economic evaluation Emerging Technology Showcase Isolation Coiled tubing Diverting agents Diagnostics
  3. 3. 3 Fracs: A Brief History of Time Then (1866) Now 150 years of Innovation
  4. 4. 4 Simultaneous: 5 m spacing, vary cluster (3 vs 5) Sequential: same spacing, single vs clustered 2011, Stress reorientation in low permeability reservoirs, Nicolas Patrick Roussel, PhD dissertation, University of Texas (pages 31 and 45). Planned Simultaneous: vary spacing (10 vs 35 m)
  5. 5. 5 Actual • Over 70,000 horizontal wells producing from unconventional resource plays* • Massive, multi-stage frac campaigns* • On average, 40% of the perforation clusters in a given lateral are not contributing* * Source: Foda, S., Refracturing: Technology and Reservoir Understanding are Giving New Life to Depleted Unconventional Assets. Journal of Petroleum Technology, July 2015, p. 76 Note • Production correlates with natural fractures • Toe not contributing Borehole image logs
  6. 6. 6 And so these men of Hindustan Disputed loud and long, Each in his own opinion Exceeding stiff and strong, Though each was partly in the right And all were in the wrong No Easy Answers Geology Spacing Fluids
  7. 7. 7 (Reuters 7/20/2015) - Halliburton Co (HAL.N) said it had tapped BlackRock Inc (BLK.N) for $500 million to help fund drilling in existing shale wells, the first such move by a major oilfield services provider at a time when oil producers are shying away from drilling new wells. The world's No.2 oilfield services provider, which is buying No.3 Baker Hughes Inc (BHI.N) to cope with a fall in demand, also reported a better-than-expected profit, helped by cost cuts. Market leader Schlumberger NV (SLB.N) and Baker Hughes have touted refracking, the practice of fracking existing wells, as means for oil producers to save money. Drilling normally accounts for about 40 percent of the cost of a new well. "Though a relatively small market today, we see significant runway for refrac in the future," Halliburton President Jeffrey Miller said on a post-earnings call on Monday. Oil and gas companies have said refracking is still too unpredictable, but some such as Devon Energy Corp (DVN.N) and Chesapeake Energy Corp (CHK.N) are using the technology to revive output from existing wells. The funding could help Halliburton speed up adoption of refracking, Edward Jones analyst Rob Desai said. Halliburton secures $500 million to fund drilling in old wells Seizing the Opportunity
  8. 8. 8 Significant Knowledge Base At least 600 searchable technical references…
  9. 9. 9 • Implement new completion learnings • Proppant issues • Embedment, crushing, or low conductivity (quality)quality, and rock creep • Fix stages where prop was overflushed • Rearrange (“fluff”) existing prop pack to establish new flow channels • Reservoir issues • Contact new reservoir by adding perfs, diversion, or reorientation • Re-energize natural fractures • Damage • Bypass salt deposition, scale, or fines plugging • Deliver production chemicals such as emulsion breakers and scale inhibitors Why Should Refracs Work? Refrac to maximize NPV. Operators should pinpoint the problems they need to remedy and design the proper frac treatment Modified from JPT April 2015 – Trent Jacobs Interview Prop conductivity falls off over time
  10. 10. 10 Requires Multidisciplinary Approach Geology • Fractures • Petrophysics • Macro/Microseismic • Heterogeneity/lithology • Barriers Reservoir • Reservoir models • Sensitivities • Reserves • Economics • Performance Completions • Dog legs • Wellbore integrity • Frac model • Frac design • Fluids • Prop • Spacing/staging • Refrac design Selection considerations/tools, by discipline Target List Prioritize by risked NPV and/or IRR Success Actual > or = plan Backdrop • Prices • Capital • Access • Partners • Ooops, new project
  11. 11. 11 1 1 Reasons To Be Optimistic From Vincent, M., http://spepgh.weebly.com/uploads/3/5/4/2/3542131/vincent_confessions_05-13-14.pdf
  12. 12. 12 Phil Winner* philpw@msn.com www.linkedin.com/in/philwinner * Reservoir optimization - M&A evaluations – Exploration Risk Assessment

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