Tech Marches Forward to Boost Productivity in Permian

---

Written by Paul Wiseman for Industrial Info Resources (Sugar Land, Texas)--On one hand, changes in demand may cause changes in total oil and natural gas production--see 2020 as an example--but increases in per-well production march on. This is according to a report from the U.S. Energy Information Administration (EIA). Since the start of the shale revolution in 2010, when horizontal wells with increasingly long laterals began to expose more producing zones to wellbores, the average production from each well has stayed on the upward path.

This is a major opportunity. A 2019 Penn State report states that more than half of U.S. production comes from shale plays. It adds that, with total reserves totaling 35 billion barrels, even a 1% increase in production rates would generate huge returns.

"By 2021," says the EIA report, "each new well drilled in the Permian Basin was producing an average of 960 barrels of oil equivalent per day."

A basic reason for the production improvement, the agency says, is longer laterals. In 2010, the average Permian Basin lateral was 3,879 feet. By 2022, the length has expanded, to 10,064. The year 2022 is the first time the average has surpassed 10,000 feet.

The year 2022, so far, has not been home to the longest individual lateral, however--not within a mile. The report shows that 2021's longest lateral was more than 4.5 miles long, as opposed to 2022's top of approximately 3.5 miles.

The Permian Basin is the top oil and gas producing area in the nation, accounting for 43% of all U.S. oil production and 17% of natural gas production in June, 2022. Multiple stacked plays, especially in the Midland and Delaware basins, allow producers easy access to layers of oil from each site, making its oil more accessible than that of other basins.

How Technology Helps Grow Production
Exxon Mobil Corporation (NYSE:XOM) (Irving, Texas) is one of the basin's most prolific producers. The company's website says it uses cube development to "drill multiple horizontal wells in stacked intervals from a single-surface location." This allows the company to speed development. Its impact on per-well production lies in the fact that this technology limits "potential parent-child production impacts," which can reduce the productivity of both wells by overlapping their production areas.

Improved data also is boosting oil and gas production in new wells. It does this by helping drillers understand geology and trajectory, to connect more accurately with producing zones. One example comes from Superior QC, a subsidiary of Patterson-UTI Energy Incorporated (NASDAQ:PTEN) (Houston, Texas). Its new service, HiFi Nav (High Fidelity Navigation), combines standard measurement while drilling (MWD) data with extensive additional drilling data to better inform the wellbore trajectory perspective.

Synthesizing this data allows drillers to more accurately track wellbore shape and trajectory in 15-foot increments, keeping the wellbore more in the heart of the producing zone. It allows them to track not only horizontal positioning, as has been done historically, but also to map true vertical depth (TVD).

In addition to drilling, completions have changed over that period. In a 2020 report, the U.S. Geological Survey (USGS) estimated that per-well water use in fracturing had grown from 3,003 million gallons per year (Mgal/yr) in 2010 to 72,220 Mgal/yr in 2019 in Texas and from 353 Mgal/yr in 2010 to 11,403 Mgal/yr in 2019 in New Mexico. Both figures represent just areas of those states that include the Permian Basin. The years from 2016 to 2018 alone saw per-well water use triple, according to the report.

Click on the image at right for a USGS graphic showing annual water use in the Permian Basin.

Frac sand also has changed, with operators using more product per well. Frac sand is used as a proppant, whose job is to prop open pores in tight sands; pores that were opened by the massive flows of water and chemicals during the frac process.

In a 2018 post, Black Mountain Sand, a Permian-based frac sand supplier, estimated that per-well sand use more than doubled between 2014 and 2018, from 1,000 pounds per lateral foot in 2014 to 2,250 pounds per lateral foot in 2018. Total consumption in the Permian also more than doubled during the period.

Some operators theorized that smaller grains (100 mesh) would penetrate more deeply into formation, propping open more pores than previously specified 20-40 mesh. But, says a 2019 story published in the Journal of Petroleum Technology (JPT), that is not necessarily true--and many Permian producers began simply using the cheapest local sand they could find, due to the expense of greatly expanding the amount used. It seems quantity was more important to increasing production than a particular quality.

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 Trillion (USD).