The business model for the “first wave” of the shale revolution (2008 to 2014) was built on drilling and fracturing wells as efficiently as possible and, as production declined, often rapidly, constructing even more wells to maintain desired production levels. But when oil prices plummeted last fall, this business model, which required recouping the operator’s full capex investment in as little as 18 to 36 months and left up to 90% of a well’s potential production untapped, was exposed as unsustainable.
To remain competitive in today’s marketplace, operators in the North American shale plays must be willing to embrace the “next wave” of unconventional resource development. This requires shifting their primary focus from well construction efficiency to maximizing recovery rates at the lowest price per barrel.
This needs to start with the recognition that existing well inventories represent renewable resources that can be rejuvenated through a variety of means—from chemical treatments and well cleanout to artificial lift or restimulation—to deliver production rates that can exceed initial levels. And because many startup costs related to well construction and infrastructure are eliminated, this incremental production is typically achieved with a lower lifting cost than the initial production.
Even prior to the recent downturn, refracturing has been used to increase production and recovery. However, not all wells have benefited equally from it as not every well is a rejuvenation candidate.
By leveraging a new science-based workflow, it’s possible to improve production, reserves recovery and economics by reinvesting only in those wells with the greatest potential and the least risk.
Baker Hughes’s NextWave production rejuvenation solution helps operators maximize value from existing wells by following a four-step workflow and leveraging a variety of proprietary technologies and techniques.
To select the best rejuvenation candidates, public data such as historic production and initial completion information are screened and used to identify wells with the greatest production potential. A financial model is then used to estimate each well’s rejuvenation economics—helping zero in on wells with the most value and avoiding those with limited prospects.
The diagnostics phase of the workflow includes diving deeper into the well’s historical record to review all available formation evaluation and production data and form a comprehensive evaluation of a specific well’s potential.
Following diagnostics, various rejuvenation methods are evaluated. If sand, scale or wax reduced initial well productivity, mechanical screens or chemical inhibitors are introduced to deliver long-term flow assurance. When artificial lift is called for, many North American operators have experienced excellent success with electric submersible pump solutions. If refracturing is necessary, an appropriate restimulation program is designed and executed to meet the well’s technical, economic and production objectives. Results from the rejuvenation treatment are then assimilated to further refine the reservoir model and production forecasts.
“I hope it stabilizes between a $80 to $100 range over the next several years. We need stability in the oil markets,” Scott Sheffield, the CEO of top U.S. shale producer Pioneer Natural Resources Co., said.
Industry giants Chevron and Exxon Mobil are making heavy investments in low-carbon solutions in pursuit of decarbonization goals but aren’t abandoning oil and gas advancements.
"For the first time in a long time, we will see a buyer looking for a barrel of oil, as opposed to a barrel of oil looking for a buyer," Halliburton CEO Jeff Miller said at the 23rd World Petroleum Congress.