Addressing low oil prices with new technologies

February 1, 2015

Packers Plus has been one of the key players in the development of hydraulic fracturing in the Bakken play, as well as around the world.

While their ball-set frac system fell somewhat out of favour in some areas of Saskatchewan a few years ago when cemented liners became all the rage, the company has continued its long-standing strategy of innovation, and has some solutions could be just the right fit for oil producers seeking to reduce costs in a world where oil prices have dropped by more than half.

To that end, Packers Plus now has products that are used in cemented liner applications, and yes, they are still very much using balls to activate their systems, having found ways to dramatically overcome what was once a limitation due to sizing.

On Jan. 14, Dan Themig, president, CEO and one of the founders of Packers Plus spoke to Pipeline News about three of their new products that are just being deployed in the field now or in coming weeks. A further four are in development, but it’s a little too early to discuss those at this time.

“We’re getting ready to distribute information on three new technologies we’re in the process of releasing,” Themig said.

Diffusor system
The first is the Diffusor system, composed of cemented ports activated with actuation balls.

“What makes this system unique is that it’s the only cemented system we know of in the world that can be set up to induce ‘complexity,’” Themig said. “What complexity is, if you frac out of a perforation or cemented port in most company’s systems, the fluid moves out of a single port and makes a single crack in the rock to drain fluid.”

“Some people will think that’s good, but the evidence is otherwise. There’s something of a newer concept that’s been around for about five years. What it says is if you can create a complex network of fracks instead of a single fracture or single crack, then the oil can drain much more efficiently. It would be like bringing all the traffic to downtown in a city on a single street. Instead you are bringing the traffic in on 49 different streets to downtown. Which one delivers more cars efficiently? Clearly it’s is one that has 49 different streets headed down at the same time.”

“So the technology is very unique. It does allow an operator to cement, but when they cement, there is a system set up that that makes sure there are some areas that are not cemented in the well, so the fracture fluids can find different pathways to create fracs. It creates what’s been determined to be the most efficient drainage network that we’ve found in unconventional plays.”

“This cemented liner also has typical ball-activated ports. The unique thing about it is that even though the port creates only one exit out of the pipe, once the fluid gets outside the pipe, it is free to move along the liner to whatever length we determine is optimal. The pressure can affect the rock not just at the port, but perhaps for 100 feet along the port, so that you can have more than one entry point into the rock or formation. It’s a cemented port, but it’s not like any cemented port currently being used, for example in the Bakken or anywhere else we know of.”

“With the standard Diffusor, we can do roughly 40 to 45 stages.”

It is a ball-size limitation. They can go up to 40+ stages with balls now, much more than just a few years ago. Themig explained, “We have continued to develop ball manufacturing technology that allows us to get finer and finer with our sizing. Then we’ve developed technology that prevents the fracturing sand from causing abrasion on the ports, so we have been able to get to some very small increments that will still effectively shift ports and deflect the frac to the next stage. So we actually can get to do those numbers. We weren’t able to probably four years ago, but now a lot of the systems we use utilize these very meticulously designed port sizes so that we’re at what most people call ultrahigh density fracturing or high frac intensity.”

There are some methods using coiled tubing that may take 30 or 40 hours to frac the well, he noted. “The Diffusor system utilizes cement, but can reduce that time down to probably less than 24 hours, in the Bakken and Shaunavon. It’s a lot more time efficient and cost effective as well.”

Instead of a frac job taking two days, it could be done in a day, resulting in a large savings.

It will be most applicable to the Bakken, Themig noted. “It’s huge because if you’re looking at drilling numbers that say (a larger oil company) does, you spent a lot of time on location with a coiled tubing unit trying to execute something that can be done a lot more efficiently.”

“It will save a lot of money and a lot of human resources.”

“We’ve had some of the operators in Saskatchewan say that when the technology is released and available, they are ready to go in and run it.”

“The unique thing about the Diffusor is it allows the development of fracture complexity, which is a more efficient drainage mechanism to recover reserves.”

“The bottom line on what we have seen production wise is that fracs with complexity will often recover almost double the total reserve per well as ones with a single frack extending from the well.”

Asked if the Torquay is different from the Bakken, he said, “The Torquay is primarily utilizing coiled tubing fracking and most of the Bakken is typically utilizing coiled tubing fracking as well.”

“While we haven’t applied the technology and the crew currently in the Torquay, I think you can expect to see a lot of very similar gains in efficiency and reduction in time and cost. The fracturing methodology is very similar in both formations.”

Quadrant Coiled Tubing System
The second new technology being introduced is the Quadrant coiled tubing system, which is a coiled tubing conveyed frac system.

Themig said, “What makes a Quadrant system so unique is typically fracturing operations that are done with coiled tubing they’ll go open a single port and then pump a single frac and then move to the next zone and repeat the process. That’s how they end up getting to the 25 stages or 20 stages they are running per well and is also how to get their 40 hours per well.”

“The unique thing about the Quadrant system is we’re actually able to shift open two to three, maybe even four ports at a single time and then pump one fracturing operation that effectively distributes the fluid in all three or four segments at the same time. Again, if you’re looking at a well that might take 30 hours to frac using single-port entry methods, this can reduce your timeframe by approximately two thirds. So it might take you 10 hours to complete all of your stages by utilizing the Quadrant system.”

“It’s got a specialized port that allows you to distribute your fluids. I guess the best analogy to what most people would understand is if you have a garden hose, one of those sprinkler types, what this does is something similar. It has ports that are cemented in place and then shifted open. When the ports are moved to the open position, there  is a regulating device inside the port that limits how much fluid can go out at one time.”

“So if you were pumping in a Bakken scenario, half a cube per minute out of the single port, you would set up your ports to regulate so that half a cube per minute comes through each port, but combined you could pump two cubes per minute and do four stages at the same time, but it will distribute the fluid equally.”

Quadrant ports can be used either as single-port entry or multiple ports at the same time. Typically, the spacing between ports would be 20 or 30 metres. When the fluid is injected, it is distributed evenly to all of the ports that are open. Thus the system can do 120 metres at a time.

Based on 40 hours doing a singleport entry, using this system should allow the same operation to be done in approximately 10 hours, according to Themig. “You pretty much go out and finish a well in a single day.”

He noted it might be a little more “family friendly” to get these jobs done during the day instead of running 24 hours. Asked if the reduction in fracking time would also result in less work for the frac operators, he noted, “Oil just fell from $100 to down to $45 a barrel, so dad might not be making any money if we can’t be more efficient.”

“We also have the ability to develop complex fractures by combining some of the features of the Diffusor with the Quadrant system. One of the main features of the Quadrant system is we can be more efficient, and combined with the ability to develop complexity it should enhance ultimate recovery for the reservoir.

QuickFRAC IV System
The third new technology is the fourth iteration of the QuickFRAC system, known as QuickFRAC IV.

“It is a multiport system that can be run either cemented or uncemented. This is the first technology that gets us to where we can truly pump 100 stages with a single technology.”

“QuickFRAC IV is a ball-activated system, but the ball will shift open anywhere from 2 to 5 ports and allow you to simultaneously treat all five ports equally with a single pumping operation. You’re not getting a lot of requests for 100-stage systems currently in the Saskatchewan side of the Bakken, but if you went down to North Dakota, where the wells are a little bit deeper and the reservoirs a little bit more complex, you will see a lot of people requesting 100 stages to be performed with a single technology.”

Those North Dakota wells are typically two miles long and two miles deep, while a Saskatchewan Bakken well in the Viewfield area is more typically a mile long and a mile deep.

“Where is the future of other reservoirs, even in Saskatchewan, we’re not exactly sure where that is. Every time we think we reach an understanding of a reservoir, we’ll find another reservoir that is less prolific or is more challenging to drill or is deeper. If you hit the south end of Saskatchewan, there are some deeper segments of the Bakken that will act more like the North Dakota Bakken. Maybe we will be doing two mile-long laterals.”

“Another thing you have is what they call the Alberta Bakken, an extension of the Bakken further west. There are companies that are drilling there that have been quite successful, but we think this technology will allow them to be more efficient in this cost-sensitive environment. The fact that you can do this either cemented or open hole gives you the option to build into your well construction whatever technologies are most effective from a producing standpoint.”

The trend has continually been more and more stages. Asked when was the last time they did an eight-stage frac, Themig laughed. “It probably was somewhere international where they haven’t caught up with the technology trend. It’s been a very long time in Canada since we’ve done an eightstage job. We’re typically 20 to 45 stages now on most wells were doing.”

Multi-lateral wells
Asked about multileg wells, he said that took off in really good areas of the Bakken. In Saskatchewan, a lot of the best Bakken reservoir is drilled up. That technology began to move to other areas like northern Alberta in the Slave Point.

In North Dakota where there’s a lot of existing wellbores in the Bakken, he said, “You’re going to see a lot of those wellbores now twinned and drilled as a multi-lateral well perhaps into the Three Forks or infield drilling in the Bakken.”

“Currently there aren’t a lot of active areas with multi-lateral wells, but we think the future holds a lot of that,” Themig said.

He’s had recent meetings in Texas where companies are planning wells such that their initial drilling is planned in such a way for additional laterals to be added later.

“I think the future is going to have a lot of re-entry drilling.” Re-entries are a way for companies to dramatically reduce expenditures on new drilling, according to Themig.

“In some areas of Saskatchewan, you will definitely see that, and in some areas of North Dakota. It saves you the cost of building a location, setting surface casing and a conductor pipe, drilling and setting intermediate… in some cases it may save you as much as maybe 50 per cent or 60 per cent of the cost of constructing a new well.”

The company has a lot of experience with dual laterals, he noted.

“Packers Plus, as far as dual-lateral wells with fracturing systems, has done more of that type of work as the rest of the industry worldwide has done combined, as far as I can tell. It’s very reliable. It’s very repeatable. We can do slim-hole systems out of four-and-half inch, five-and-ahalf inch and seven-inch casing. The capabilities are outstanding. The repeatability is close to 100 per cent, so no one should cross it off as an unreliable technology, nor should they cross it off because casing sizes are small,” Themig said. “When you look at all the wells in Saskatchewan, I would view every single wellbore, regardless of the casing size, as a potential candidate for re-entry and drilling, adding additional laterals.”

Using technologies to address $50 oil
Asked about life at $50 (or less) per barrel, he responded, “There are dozens of ways to become more efficient, no matter where we’re at in our current technology and field practices.

“What I’ve been telling people, and I’ve been giving this talk before prices dropped … is the Holy Grail we should be looking for is how do we reduce total well costs by 10 per cent? The other part of that is how do you increase production and ultimate recovery by 25 per cent? Maybe by 50 per cent? I’ve got one operator that is using our technology that has increased productivity and ultimate recovery of their wells by more than 100 per cent by using these technologies and using them in a cost-effective manner.”

“The industry gets pretty used to working at a certain price. When the price changes, we’re a pretty innovative industry. We always find a way to survive and operate in different cost environments fairly quick. You look at our industry when we were at $100 WTI price, and you thought of it dropping to $80, everybody thought, ‘How could we ever survive?’”

“Now that prices are $45, $80 sounds really good, and I think we’d be all glad to recover to that factor. We’ll adjust our efficiencies and cost structures and our methodologies now to work in this environment. Granted, $45 is going to be very difficult, but you’re going to see operators find new, more efficient methods. Our timing is really good in launching these technologies.”

The Diffusor system is ready to go to the field immediately, and the Quadrant system is expected to be in the ground in late January. The QuickFRAC IV system is expected to be launched by mid-February.