Synopsis

Will coil tubing conveyed fractures stimulation gain market share in the Permian Basin? Survey respondents note activity levels for the process have stayed consistent during the downturn even as traditional plug and perf slickwater fracture stimulation has seen activity decrease. Similarly the use of high sand volumes remains unchanged in the current environment, though total volumes, at 12 million pounds per well, were double the last Permian report. The current report focused on the northern Delaware Basin where the last report surveyed participants in the Midland Basin. Wells per pad remain unchanged at between 3 and 4, while zipper fracks represented 46% of completions, up incrementally versus the last quarter. However the share of zipper fracks will decline as operators complete a single well on a pad and postpone completions for the remaining wells into the future. Watch for the next Permian Basin downhole report in June 2015.

Part I. – Survey Findings

Among Survey Participants:

  • Slickwater Continues as Main Fracking Practice
    [See Question 1 on Statistical Review]
    ​All respondents reported slickwater dominates their fracking practice. No mentions were made of crosslink growing in usage. This may be part of an attempt to keep the cost of completions lower in the current market.
    • Mid-Tier Service Provider: “We haven’t seen many changes in how completions are done since the slowdown, but there is concentrated effort at keeping costs as low as possible without reducing production results.”
  • Little Change Expected in Next Quarter Completions
    [See Question 2 on Statistical Review]
    ​All respondents expect to see little change as operators are making few changes to use of slickwater stimulation for Permian horizontals. Completion delays are the biggest change.
    • Completions Consultant: “We have seen most clients stick with what they were doing with little change beyond re-negotiating prices and delaying some completions into the future. It is all about surviving until price of oil recovers.”
  • Spacing Varies between Technique Practices
    [See Questions 3a, 3b, 3c on Statistical Review]
    ​Spacing ranges between 90-ft. to 300-ft. in the play. Standard plug and perf fracks average 263-ft. between stages. One respondent said sleeve technology provides a more pinpointed and accurate frack and those clients who have tried it continue to use the method with good results. Spacing in wells using sleeves ranges from 80-ft. to 100-ft.
    • Mid-Tier Service Provider: “Spacing hasn’t really changed with operators lately. It simply depends on which formation and length of lateral and then which type of frack the operator prefers. Most are making few changes in methods at present.”
  • Plug and Perf Most Common Fracking Technique
    [See Question 4 on Statistical Review]
    Most respondents reported that Plug and Perf completions are the most common fracking technique in the Permian. However, those who have used sliding sleeve technology have experienced good results and continue to use it. Of interest is a remark from a supplier of sleeves who said they have experienced very little slowdown during this time. This could indicate that the overall percentage of wells completed with sleeves could gain market share during the current volatile oil price environment.
    • Completions Supplier: “We have seen very little slowdown in the sale of our sleeves in the Permian, which may indicate our method is gaining traction overall. Our results continue to be very positive in the play.”
  • Downhole Tools, Service Providers Excessive
    [See Question 5a and 5b on Statistical Review]
    ​All respondents reported that the number of downhole tool providers is oversupplied within the region. No new tools or methods were reported among these respondents.
    • Top-Tier Service Provider: “With the total number of completions slowing down there is a definite oversupply. If this continues, I am sure layoffs will balance this out soon.”
  • Multi-Well Pad Use Continues
    [See Question 6 on Statistical Review]
    The average number of wells per pad reported continues to range between three and four wells per pad. However, total wells completed immediately after drilling is slowing considerably with many operators delaying fracking wells.
  • Zipper Fracks Account for ~46% of Completions Among Current Respondents Using Standard Completion Methods
    [See Question 7 on Statistical Review]
    The percentage of zipper frack completions among respondents averages ~46%; the remaining 54% of wells are fracked individually. As a higher percentage of wells drilled are delayed for completion, the number of single well completion will grow.
  • Natural Sand Reported As Most Common Proppant; Quantity Reported Higher
    [See Question 8a and 8b on Statistical Review]
    Natural sand is reported as the most common proppant in the region and averages ~12 million pounds per well among respondents. Respondents said 20/40, 40/70, 30/50 and 100-mesh are all common. Natural sand is used as the key proppant on 100% of wells reported. Respondents reported average sand volume per well had reached a high when the market slowdown began but has since remained stable.

Survey Demographics

H A R T E N E R G Y researchers completed interviews with eight industry participants in the downhole completions segment in the Permian Basin area, including two consultants for oil and gas operators, one coiled tubing completions specialist, one frac equipment supplier and four managers or sales persons with well service companies. Interviews were conducted during the second half of March 2015.

End Survey Findings

Part II. – Statistical Review

Downhole Completions

[Permian Basin]

Total Respondents = 8
[Consultant for Oil and Gas Operators = 2, Coil Tubing Specialist = 1,
Frack Equipment Suppliers = 1, Frack Service Providers = 4]

1. What common practices are used in your area for completions?
Slickwater: 8


2. Do you see that changing over the next 3 to 6 months?
No changes expected: 8

3a. Is spacing between stages closer now than a year ago?
Same spacing: 8*
*Spacing between stages decreases for sliding sleeve fracks since more, but smaller stages are utilized.

3b. What is the average distance between frack stages in your area?
Spacing P&P* SS**
250’ spacing: 3 -
250’-300 spacing: 3 -
80-100’: - 2
Average: ~263-ft. ~90-ft
*Plug & Perf
**Sliding Sleeve

3c. How are you fine tuning your frack program downhole?
Sliding sleeves with coil tubing: 2
Slickwater w/heavy loading of sand for each stage: 2
No real changes 4

4. What fracking technique is most common in your area?
Plug and Perf Only: 5
Both Plug and Perf and Sliding Sleeve: 3

5a. Would you characterize the supply of downhole tools in your area as excessive, sufficient or insufficient to meet early 2015 demand?
Excessive: 8

5b. Are there any new downhole tools being tried in your area?
Nothing new: 8

6. What is the average number of wells being completed per pad in
your area?
3-4 wells: 6
4-6 wells: 1
Average ~4 wells per pad 7 total responses

7. What percentage of fracks drilled from pads are zipper fracks vs.
individual fracks?
Zipper Frack Solo Frack # Responses
40% 60% 1
75% 25% 1
50% 50% 5
Avg 42% 58% 7*
*1 respondent uses coiled tubing fracks which are done one well at a time.

8a. How much proppant (in lbs.) are you using per well?
10-15 million lbs. 5
12-16 million lbs.: 1
10-12 million lbs: 2
Average per well: ~12.4 million pounds*
*This report shows much higher volumes common in Bone Springs wells.

8b. On a percentage basis, how much proppant in your area is used by type?
Average Among Respondents
Natural Sand* only: 100%
*Respondents reported 20/40, 30/50, 40/70 and 100 mesh sand most common.