Exploration and Production

Maximising ultimate recovery

from unconventional reserves
By Jeff Miller
Chief Operating Officer, Halliburton

T
his is certainly a golden age for drilling and optimism about the size of the unconventional resource.
completion technology. Across the board, in This is true in the US, where the resource is developed,
deep water reservoirs, in unconventional and internationally where the resource is still being
formations and in mature fields our industry evaluated. Various estimates show reserves of natural
continues to innovate and invent new ways to produce gas increasing by 60 per cent in the US and 20 per cent
more oil and gas more efficiently. Necessity truly is globally and reserves of oil increasing by about 25 per
the mother of invention. One of the things that really cent both in the US and globally.
excites me about this business is how we as an industry It is clear that to sustain this trend, we must find better,
consistently use technology to meet growing energy faster and cheaper ways to get every gas and oil molecule
demand in the face of a more challenging resource base. out of every field and formation. We have always known
Looking forward, almost all analysts see a demand that we leave a lot of oil and gas in the ground when a
for energy that would be difficult, if not impossible to well or a field comes to the end of what we normally think
meet if we were simply doing things “conventionally.” of as its economic life. The average recovery factor is 70
We are becoming more efficient at using energy, but per cent for gas and 35 per cent for oil. For conventional
most analysts still expect the world’s energy demand resources, there is a wide variety of techniques: CO2 and
to grow at about 1.5 per cent a year for the next 20 water flooding, infill drill and artificial lift that can create
years. Even at that historically low rate of growth, the a new peak of production, extend the life of the well and
world will be consuming energy at a rate that is 35 per increase its recovery rate. Those techniques are proven
cent higher in 20 years than it is today. to be effective and have very favourable economics.
At the same time, the “easy” oil and gas are gone forever. Incremental oil and gas production from mature fields
There are very few places left in the world where you can has been and will continue to be an important piece of
drill a well on dry land and expect oil or gas to come out of the energy supply puzzle.
the ground on its own. If we are going to meet demand, we A similar narrative is unfolding for unconventional
must forge into increasingly harsh environments, such as resources. There is a lot of uncertainty about the amount
deep water and the Arctic and become increasingly clever of effort required to sustain and grow production to
at coaxing oil and gas out of the ground from resources the levels assumed by current forecasts. We just do
that had been previously unreachable or from reservoirs not have enough experience to reliably estimate the
that we believed had been tapped out. expected ultimate recovery (EUR) of unconventional
The most exciting thing that has happened in the wells. For conventional wells, we know a lot about how
energy industry in my lifetime has been the phenomenal quickly a well’s production will peak and how long it
growth in oil and gas production from unconventional will take for the production to decline to a level where
formations. We have all known for a long time that it is not economical to keep producing. The US Energy
shale rocks held huge quantities of oil and natural gas. Information Administration recently released an analysis
What was missing was the technology necessary to of well-level data for tight oil and noted that “EURs based
bring those hydrocarbons to the surface. Around 2007, on only the first year of monthly production ranged from
operators and the service companies began to master as much as 385,000 barrels higher to 173,000 barrels
that technology and we started to produce large amounts lower than the EURs based on four years of production”.
of gas using horizontal drilling and hydraulic fracturing That is a pretty wide range, when you consider that the
techniques. What has happened since then has been average EUR for a well drilled in 2012 in the Eagle Ford
nothing short of phenomenal. Gas production from shale formation is about 191,000 barrels.
reservoirs has increased from about 1,000 billion cubic Unconventional resource plays have been developed
feet (bcf) in 2007 to over 10,000 bcf in 2013. Oil production at an extraordinary rate. Many of them are already
has increased by 47 per cent over the same period. mature, meaning their production has moved past its
Companies are investing in LNG liquefaction plants and (first) peak. Unconventional plays typically reach their
pretty soon, the US will be exporting gas. Some analysts hydrocarbon peak and quickly decline, hastening the
even believe that North America may start to export oil time that they can be labelled mature assets. Extending
in the next five years. Going forward, there is a lot of their mature productive life and ultimate recovery is

54 21st World Petroleum Congress

 Exploration and Production

paramount. That is going to require us to think about optimise fracture growth in infill drilling applications.
longer-term developmental drilling and completion It is also well documented that initial production
strategies. Fortunately, there are a lot of solutions to this rates and EUR can decline as a result of “gaps” in the
challenge already working their way into the market. fracture network along the lateral. Thousands of existing
wellbores have vast untapped hydrocarbon reserves
Infill drilling and its challenges in existing perforation clusters that did not receive
Unconventional reservoirs have very low permeability. effective stimulation. These unproduced or bypassed
Because of the short drainage radius of a given fracture, portions of the reservoir may be exaggerated if they
the reservoirs require more closely spaced wells to were under-stimulated when compared to the more
properly drain the reservoir and boost production rates recent stimulation techniques and perforating designs.
and incremental hydrocarbon recoveries. Infill drilling, Most unconventional multistage horizontal wells
particularly focussed on down-spacing, has become become potential re-stimulation candidates at some
the most widely used method to accomplish proper point in their life, particularly those completed early in a
drainage and enhance the recovery of a field. play’s development. In some basins re-stimulating, using
Aptly designated, down-spacing involves decreasing only the existing perforations, is yielding up to 50 to 60 per
the space between wells laterally to optimise overall cent of the original production. The success or failure of
economics and increase the present value of the field. re-stimulation can have a big impact. Treatments involve
In some plays, like the Eagle Ford shale, operators in reusing the existing wellbore can potentially deliver a cost
their multi-well pad drilling programmes have reduced savings of US$2-4 million in some North American wells
the amount of acreage allocated to each well from 160 compared to drilling a new well.
to 40−60. While this infill drilling methodology reduces We work in an industry that is alive with challenges
costs and improves efficiencies, it also comes with and opportunities. Demand is growing, the resource is
daunting challenges. The biggest of these challenges getting tougher, but technology continues to outpace
is well interference, which occurs when a new infill both of those forces. Our industry has always stepped
well is drilled between two existing wells, intercepting up again and again when it looked like the cost and
hydrocarbons flowing toward those wells and reducing availability of energy might be a drag on the economy.
their productivity. The types of innovative approaches to increasing the
We have developed technologies to mitigate well productivity and efficiency of unconventional resources
interference and provide more optimal fracture networks are an example of this. When I look at innovations like
on infill wells including diversion technologies designed these, I cannot help but be optimistic and excited about
to increase uniquely stimulated areas of the reservoir and the future of our business.  n

Halliburton’s Frac of the Future™ equipment, including SandCastle® proppant storage units, working in North Dakota

Responsibly Energising a Growing World 55