[Editor's note: This story was updated at 11:42 a.m. CT May 22.]
Shale players in the U.S. could continue to see falling drilling and completion costs in 2017, according to a report compiled by IHS Markit for the Energy Information Administration.
For the most part, operators have continued to bring down costs through drilling rate efficiencies in the major U.S. shale plays such as the Bakken, Eagle Ford, Marcellus and Permian. However, there is still considerable cost variability between each shale play partly driven by proppant use, the IHS report said.
Overall, current proppant costs make up an average of 14% of total capital costs and include the amount and rates for the particular type of material introduced as proppant in the well. Other well costs included rig and drilling fluid, casing and cement, frack pumps/equipment and completion fluids/flowback.
In the report, Bakken wells were the most costly because of long lateral lengths and use of higher‐cost manufactured and resin coated proppants. In contrast, the Marcellus had the least pricey wells because of shallower and less expensive natural sand proppant.
Similar to the Bakken, proppant costs per pound in the Eagle Ford Shale were higher due to heavy reliance on artificial proppant. Overall, pressure is high in the Eagle Ford but more so in the deeper gas-prone areas, which also drives completion costs and artificial proppant use up.
Despite the Bakken having long lateral lengths (up to 10,000 ft with 30-40 frack stages), proppant use and fluid per foot was much lower than other plays. Still, costs are comparable, as the Bakken uses more of the higher-cost artificial and resin coated proppants, which ends up driving the completion costs higher.
A Wolfcamp discovery by Abraxas Petroleum Corp. (NASDAQ: AXAS) in the Phantom Field was reported in Ward County, Texas (RRC Dist. 8), according to IHS.
Abraxas’ well, #101H Caprito 99, was completed in Wolfcamp A2 through a 4,963-ft lateral with a 25-stage fracturing. It initially flowed 1,053 barrels (bbl) of oil and 1.285 million cubic feet (MMcf) of gas per day or 1,267 barrels of oil equivalent per day (boe/d).
The well was drilled to 15,671 ft and is on a 640-acre Delaware Basin lease in Section 99, Block F, G&MMB&A survey, A-53. The horizontal leg bottomed about a mile to the west-southwest at a true vertical depth of 11,067 ft.
Abraxas owns a 100% working interest in the well, and additional completion details are not currently available from the San Antonio-based operator.
Jagged Peak Energy LLC, based in Denver, completed a Delaware Basin-Wolfcamp well in the Winkler County, Texas (RRC Dist. 8), portion of Phantom Field.
The #1H University Lands 4344-21 well is flowing 1,505 bbl of 40.6-degree-gravity crude, 1.534 MMcf of gas and 3,681 bbl of water per day. Drilled to 21,862 ft, 11,652 ft true vertical, production is from acid- and fracture-stimulated perforations at 11,774 ft-21,770 ft.
The well is in Section 48, Block 20, University Lands Survey, A-U040. The lateral bottomed two miles to the east-northeast in Section 44. Tested on a 32/64-inch choke, the flowing tubing pressure was 2,839 pounds per square inch (psi).
The completion offsets the bottomhole of a Bone Spring well completed in 2011 at #1H University 48-20.
GMT Exploration Co. LLC filed permits for four horizontal Third Bone Spring Sand oil tests in a single section in Lea County, N.M.
All four of the Houston-based company’s tests will be in Antelope Ridge North Field.
Located on the northern flank of the Delaware Basin, #001H Excitebike 12 will be in Section 12-23s-34e. The 16,050-ft horizontal test will bottom to the south. A quarter-mile to the east will be #001H Double Dragon. Farther to the east will be the proposed #001H Duck Hunt 12 and #001H Ninja Gaiden 12—both tests are also permitted to 16,050 ft with south-trending laterals.
Houston-based EOG Resources Inc. (NYSE: EOG) plans to drill four long-lateral horizontal Upper Wolfcamp wildcats in the Lea portion of the Delaware Basin, IHS said.
The #701H Antietam 9 Federal Com will be in Section 9-25s-33e. It has a proposed depth of 19,861 ft, 12,430 ft true vertical, and will bottom within three miles to the south. From an offsetting surface location, #702H Antietam 9 will have a parallel south-trending lateral with a proposed depth of 19,885 ft, 12,430 ft true vertical.
A third of a mile to the east will be the offsetting #703H Antietam 9 Federal Com and #704H Antietam 9 Federal Com in Section 9-25s-33e. Both of these tests will have roughly one-mile long laterals, both with proposed depths of 19,872 ft and true vertical depths of 12,430 ft.
Two offsetting Leonard Shale wells in the Delaware Basin were completed by Oklahoma City-based Devon Energy Corp. (NYSE: DVN), IHS said.
The Thistle spacing pilot in Lea tested 400-ft vertical spacing between the Leonard B and C intervals. The Triple X Field-Thistle wells were drilled with 7,000-ft laterals.
The #124H Thistle Unit flowed 127 bbl of oil, 214,000 cubic feet of gas and 1,906 bbl of water per day from acid- and fracture-stimulated perforations at 9,962ft-16,995 ft. The 17,057-ft venture is in Section 22-23s-33e and the true vertical depth is 9,777 ft. The lateral bottomed about 1.5 mile to the south in Section 27.
The deeper Leonard C well, #109H Thistle Unit, runs parallel #124H Thistle Unit. The #109H Thistle Unit was shut-in after being drilled in late 2015 to 17,602 ft, 10,101 ft true vertical. No other details were reported.
Manti Tarka Permian Operating LLC, based in Houston, completed the company’s first Ward (RRC Dist. 8) well.
The #1HA Whirlaway 99 was tested on-pump flowing 1,183 bbl of 40-degree-gravity crude, 1.167 MMcf of gas and 3,239 bbl of water per day. Production is from fracture-stimulated Wolfcamp perforations at 11,642 ft-16,318 ft.
The Phantom Field well was drilled out of a 12,300-ft pilot hole and is on a 640-acre Delaware Basin lease in Section 99, Block 34, H&TC RR Co Survey, A-227. The lateral extends almost a mile to the southwest. It was drilled to 16,500 ft, 11,375 ft true vertical.
A Phantom Field discovery in Reeves County (RRC Dist. 8), Texas, was announced by San Antonio-based Silverback Exploration LLC.
The extended-lateral horizontal Wolfcamp producer, #1H Admiral 4-48-47, is producing from fractured perforations at 10,815 ft-19,478 ft. It was tested flowing 1,119 bbl of 46.4-degree-gravity oil, 3.732 MMcf of gas and 4,498 bbl of water per day.
The well is in a 1,285-acre Delaware Basin lease in Section 48, Block 4, H&GN RR Co Survey, A-1380. It was drilled to 19,606 ft, 10,221 ft true vertical, and bottomed to the southwest in Section 47. Gauged on a 34/64-inch choke, the flowing casing pressure was 1,601 psi.
Larry Prado, activity editor, can be reached at firstname.lastname@example.org.
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