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Scoop-Stack Playbook 2017

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SCOOP/STACK: PRODUCTION FORECAST UGcenter.com | September 2017 | 39 Because of the region's complexity, it is tricky to characterize using generalizations, said Allen Gilmer, chairman at Drillinginfo. "You have the Scoop and Stack, which represents the Woodford and various Mississippian plays, along with the Cleveland and Tonkawa and a variety of other plays that are being drilled unconventionally. Each has its own economics," he said. "When you move away from that which has always been considered the Scoop and Stack and expand that aperture a little, you start to see some very interesting things. The sexy part of the extended play is that it is a nice column of rock that has a lot of carbon-generation capacity throughout." "What's going to be interesting is to find out how many benches there are, particularly in the Stack," Kugler said. "Are there really three zones in the Meramec? If so, where are they present? What do some of the other formations have to offer? What will the Stack pay really look like once we get it a lit- tle bit more de-risked and know where the effective acres are in each bench?" Rig counts and drilling activity Rig counts have been relatively constant, but the rigs in these plays have been very active and have produced positive results. Gilmer said Drillinginfo recorded rigs being added in the play until four or five months ago. "Now it is pretty stable," he said. "The economics of some of these emerging plays are such that I would think they would be encouraging for rigs, but that isn't across the whole play." Some analysts, like IHS Markit and Freedonia, do not consider rig count to be a big indicator of the level of drilling activity in these plays. According to Freedo- nia's Carnovale, "The biggest thing about the rig count is that we don't think it matters as much as it used to." One of the reasons, he said, is that pad drilling is expanding the number of wells drilled by a single rig in a small space; so rig moves within the plays— rather than the number of rigs working—are a better gauge for determining productivity. Simply put, "Rig count is not the strong indica- tor of future production that it used to be," Car- novale said. "We look much more at well count than at rig count." According to Chu, there are two philosophies for drilling. "The 'old school' approach is to go after the best wells first," he said. The other is to drill as many wells as possible in a section. The reason, he explained, is that if they fracture them at once, the entire area is pressured, raising more rock above the frack gradient; so higher volumes of sand can be pumped into the cracks. The end result is not only an increase in production but also a lower drilling cost per well from operating and logistical efficiencies. "Continental has mentioned that more wells per drilling unit not only increases the productivity of the producing wells but decreases the cost of the well by as much as 30%," he said. Gilmer believes positive results have to do with three things: the fracturing job, the well spacing and when the adjoining wells are drilled. "Tight spacing works if all these happen in a short time frame but tends not to add value when wells are drilled later to infill," he said. Well spacing pilots carried out in 2016 produced sufficient data for companies to develop more precise drilling plans into this year and next. "Cimarex con- ducted a 10-well pilot that has informed its decision to carry out a 19-well pilot, which would precede a 19-well-per-section development in 2018," Chu said, "and Devon is looking at 20 wells per section." Capitalizing on new ideas As operators drill more wells, they are looking for ways to do so as effectively as possible. According to Debelius, "The biggest thing is more complicated fracturing, with tighter stages and more clusters within the stages." In short, "Operators are trying to find out how far they can push the technolo- gies." One result is a drastic increase in the amount of proppant being used. Today, proppant usage is nearly twice as high as it was a couple of years ago, he said. Kugler agreed, noting that proppant intensity nearly doubled between early 2015 and mid-2016 in the Stack, made possible by applying lessons learned from other shale plays. "Operators are comfort- able ramping things up," he said. "When you have high-quality reservoirs and high-quality rock, it will respond pretty well to proppant."

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