by Dava Jennings, Marketing Manager, Industrial Project Solutions
With the upstream oil sector currently facing pricing declines, production efficiency and cost cutting is on everyone’s mind. One of the solutions may be refracking existing wells. The cost of a new well can be more than $8 million, compared to the cost of refracking an older well which is around $2 million.
Many existing shale wells hold secret treasures waiting to be discovered. Older technology only recovers about 8% of the oil during the initial fracking process. However, utilizing newer, more advanced extraction methods through refracking, production rates can greatly increase. A recent study of 80 wells that were refracked in North Dakota’s Bakken formation shows a production increase of more than 30% over the output from their original tapping (analysts William Foiles and Peter Pulikkan).
Additionally, refracking helps to solve the problem of the rapid production decline of tight oil wells in their first year (44 to 70 percent). Instead of drilling more and more wells to maintain production, companies are focusing instead on refracking existing wells, which represents a large potential market.
Top industry producers have done the numbers and are in the process of developing improved technologies.
As new refracking methods are being developed for horizontal shale wells, the pool of potential wells for refacking is growing. In North America there are over 100,000 wells that have been fracked. Of those wells, over 50,000 of them in the US alone are potential candidates for refracking (Bloomberg).
David Adams, a Halliburton vice president, recently told Bloomberg: “If you look at the top operators across North America that we work with, there’s not a single one of them that’s not talking about re-fracks today.” http://www.bloomberg.com/news/articles/2015-02-10/drillers-take-second-crack-at-fracking-wells-to-cut-cost-energy
“There’s tens of thousands of candidates throughout North America that have got the same issue here — they have failed to get all of the frack clusters to contribute,” says Robert Drummond, president of Schlumberger North America, who has developed improved technology to carry the sand further, opening up new channels in the rock. http://worldindustrialreporter.com/refracking-boom-oil-gas-industry-innovate-propel-shale-oil-revolution/
The outlook is exciting. Refracking is forecasted to represent 11% of all US fracking activity by 2020 (IHS Inc), bringing with it all of the processing, transportation, inbound and outbound logisticsof fracking back to the older wells.
Petroleum Connection additional comment:
Don’t miss the opportunity to meet with the Industrial Project Solutions team at Booth 51 the 4th Annual Frac Sand Supply & Logistics Conference on September 24 – 25, 2015! They will also be moderating a Roundtable Discussion on “The Need for High Capacity Movable Transload” at the event. Visit the conference website to learn more and to register.