Nov. 25–Forecasts have the Permian Basin increasing oil production to as much as 5 million barrels a day. in the coming years. The challenge is finding the best way to measure that production and the best ways to complete the wells for optimal production.
“Everyone’s seen on the charts how every four years they double production in the Permian Basin,” said Allen Gilmer, co-founder and executive chairman at Drillinginfo. “Part of that is the zone, but also by being smarter.”
How to be smarter was the topic of a panel discussion at the recent Executive Oil Conference presented by Hart Energy.
Gilmer listed what he called “the four horsemen” of greater production: longer laterals, precise lateral landings, closer stages and greater proppant loading.
“Everyone is looking at how they can lower their dollars,” said said Kumar Ramurthy, director, North American Technology for Halliburton. “Those four horsemen contribute to that. Those are happening in horizontal drilling. If your goal is to maximize capital returns, it may take three or four years to get into development. It will take a scientific approach, it will take the next generation of completion technology.”
In discussing the best way to determine the value of the production, Ramurthy said it’s important to properly measure a well’s potential.
“When a well starts flowing, sometimes you don’t get a real measure of production in 30 days or even 60 days,” he said. “It takes probably six months to a year to truly assess a well. You need at least six months to see if a well is meeting its true potential.”
Phil Webb, chief operating officer with Surge Energy, agreed that a minimum of 90 days of cumulative production is best to establish a financial metric. He said there are also technical metrics for drilling and placing wells on production that must be used to justify the financial metrics.
Gilmer said extrapolating a well’s potential from a 24-hour flow “is the most useless measure.”
With acreage on the eastern side of the Midland Basin — 80,000 continuous acres in Borden and Howard counties — Surge has relied on innovation and technical excellence to succeed, Webb said.
“We’ve drilled 300 wells. We’re quick to innovate, quick to change. We like longer stages but closer clusters,” he said. “We don’t look at individual well performance.”
He said 100 percent of Surge’s wells are completed using regional sand and produced water or a produced water mix. Next year, two-thirds of the company’s development will be cube development — drilling a large number of wells from one drilling pad and using zipper fracs — or fracturing multiple wells on the single pad at the same time, he said.
Webb said it’s too early to write an obituary for independent producers.
“Fixed, rigid thinking on the way to complete wells is not the way to go. We’ll make changes today and evaluate them. If it doesn’t work, we’ll change again. If it works, we’ll do it again,” he said.
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