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Occidental Petroleum (Oxy) said this week it has agreed to sell almost 25,000 net acres in the Permian Basin of Texas to Colgate Energy Partners III for nearly $508 million. Average output of the properties amounts to 10,000 BOE/D from about 360 wells in the southern Delaware Basin, Houston-based Oxy reported in its announcement. The sale, expected to close in the third quarter, will boost Midland-based Colgate's holdings in the Permian to about 83,000 acres with an estimated production of 55,000. Colgate said it plans to run up to six drilling rigs by year's end and boost average production to 75,000 BOE/D by 2022. Proceeds from the sale will be used to pay down Oxy's debt that was around $35.4 billion in March, down slightly from the $36.03-billion debt reported last June.
As industry buzzwords go, "automation" has spent its time in oilfield vernacular climbing the ranks of widely used terms. It now resides as one of the go-to designations for signs of advancement in any number of disciplines. Its use has been tied most frequently with drilling operations as contractors look to keep employees out of harm's way via a robotic takeover of most motion-intensive jobs on the rig's drill floor--basically anything that grips, clamps, or spins. More recently, the term has moved away from the drill floor and into other well construction operations allowing for things such as remote, real-time measurements without the need for boots on the ground. For areas like west Texas and the Permian Basin shales, having the option for remote readouts and a component of automation that can allow for corrective actions should the need arise can go a long way in terms of safety and efficiency gains as well as better manpower application.
US shale producers Cabot Oil & Gas and Cimarex Energy are the latest to declare a "merger of equals" in a deal valued at around $17 billion, based on recent equity prices. Announced today, the terms of the deal will result in Cimarex shareholders owning about 50.5% of the combined company and Cabot shareholders owning approximately 49.5%. The deal brings together Houston-based Cabot's gas-rich portfolio, comprising almost 173,000 acres in the Marcellus Shale, with Cimarex's oil-dominated 560,000 net acres in the Permian Basin and Anadarko Basin. On a pro forma basis, the merged company will produce around 600,000 BOE/D from the three basins. The companies expect $100 million in savings to materialize within 2 years of the deal closing and to generate around $4.7 billion in free cash flow from 2022 to 2024.
James Blaney is an engineer on a hydraulic fracturing fleet for Liberty Oilfield Services, and is based in the Permian Basin. He holds a bachelor's degree in petroleum engineering from the Colorado School of Mines (CSM). While at CSM, he was an active member of the CSM SPE Student Chapter. He volunteered regularly at fundraising events and was a member and captain of the CSM PetroBowl team.
Abstract Growth in the coal seam gas industry in Queensland, Australia, has been rapid over the past fifteen years, with greater than USD 70 billion invested in three liquified natural gas export projects supplied by produced coal seam gas. Annual production is of the order of 40 Bscm or 1,500 PJ, with approximately 80% of this coming from the Jurassic Walloon Coal Measures of the Surat Basin and 20% from Permian coal measures of the Bowen Basin. The Walloon Coal Measures are characterized by multiple thin coal seams making up approximately 10% of the total thickness of the unit. A typical well intersects 10 to 20 m of net coal over a 200 to 300 m interval, interbedded with lithic-rich sandstones, siltstones, and carbonaceous mudstones. The presence of such a significant section of lithic interburden within the primary production section has led to a somewhat unusual completion strategy. To maximize connection to the gas-bearing coals, uncemented slotted liners are used; however, this leaves fluid-sensitive interburden exposed to drilling, completion, and produced formation fluids over the life of a well. External swellable packers and blank joints are therefore used to isolate larger intervals of interburden and hence minimize fines production. Despite these efforts, significant fines production still occurs, which leads to failure of artificial lift systems and the need for expensive workovers or lost wells. Fines production has major economic implications, with anecdotal reports suggesting up to 40% of progressive cavity pump artificial lift systems in Walloon Coal Measures producers may be down at any one time. The first step in solving this problem is to identify the extent and distribution of fines production. The wellbore completion strategy above, however, precludes use of mechanical calipers to identify fines production-related wellbore enlargement. A new caliper-behind-liner technique has therefore been developed using a multiple-detector density tool. Data from the shorter spacing detectors is used to characterize the properties of the liner as well as the density of the annular material. This is particularly important to evaluate as the annulus fill varies between gas, formation water, drilling and completion fluids, and accumulated fines. The longer spacing detector measurements are then used in conjunction with pre-existing open-hole formation density measurement to determine the thickness of the annulus, and hence hole size, compensating for liner and annulus properties. This methodology has been applied to several wells completed in the Walloon Coal Measures. Results have demonstrated the ability to identify zones of borehole enlargement behind slotted liner, as well as intervals of either gas or fines accumulation in the annulus. In addition, the technique has been successful in verifying the placement of swellable packers and their integrity. The application of this solution has been used to drive improvements in the design of in-wellbore completion programs and in the future will help drive recompletion decisions and trigger proactive workovers.
Abstract Conventional resistivity models often overestimate water saturation in organic-rich mudrocks and require extensive calibration efforts. Conventional resistivity-porosity-saturation models assume brine in the formation as the only conductive component contributing to resistivity measurements. Enhanced resistivity models for shaly-sand analysis include clay concentration and clay-bound water as contributors to electrical conductivity. These shaly-sand models, however, consider the existing clay in the rock as dispersed, laminated, or structural, which does not reliably describe the distribution of clay network in organic-rich mudrocks. They also do not incorporate other conductive minerals and organic matter, which can significantly impact the resistivity measurements and lead to uncertainty in water saturation assessment. We recently introduced a method that quantitatively assimilates the type and spatial distribution of all conductive components to improve reserves evaluation in organic-rich mudrocks using electrical resistivity measurements. This paper aims to verify the reliability of the introduced method for the assessment of water/hydrocarbon saturation in the Wolfcamp formation of the Permian Basin. Our recently introduced resistivity model uses pore combination modeling to incorporate conductive (clay, pyrite, kerogen, brine) and non-conductive (grains, hydrocarbon) components in estimating effective resistivity. The inputs to the model are volumetric concentrations of minerals, the conductivity of rock components, and porosity obtained from laboratory measurements or interpretation of well logs. Geometric model parameters are also critical inputs to the model. To simultaneously estimate the geometric model parameters and water saturation, we develop two inversion algorithms (a) to estimate the geometric model parameters as inputs to the new resistivity model and (b) to estimate the water saturation. Rock type, pore structure, and spatial distribution of rock components affect geometric model parameters. Therefore, dividing the formation into reliable petrophysical zones is an essential step in this method. The geometric model parameters are determined for each rock type by minimizing the difference between the measured resistivity and the resistivity, estimated from Pore Combination Modeling. We applied the new rock physics model to two wells drilled in the Permian Basin. The depth interval of interest was located in the Wolfcamp formation. The rock-class-based inversion showed variation in geometric model parameters, which improved the assessment of water saturation. Results demonstrated that the new method improved water saturation estimates by 32.1% and 36.2% compared to Waxman-Smits and Archie's models, respectively, in the Wolfcamp formation. The most considerable improvement was observed in the Middle and Lower Wolfcamp formation, where the average clay concentration was relatively higher than the other zones. Results demonstrated that the proposed method was shown to improve the estimates of hydrocarbon reserves in the Permian Basin by 33%. The hydrocarbon reserves were underestimated by an average of 70000 bbl/acre when water saturation was quantified using Archie's model in the Permian Basin. It should be highlighted that the new method did not require any calibration effort to obtain model parameters for estimating water saturation. This method minimizes the need for extensive calibration efforts for the assessment of hydrocarbon/water saturation in organic-rich mudrocks. By minimizing the need for extensive calibration work, we can reduce the number of core samples acquired. This is the unique contribution of this rock-physics-based workflow.
Abstract Organic-rich mudrocks are complex in terms of rock fabric (i.e., the spatial distribution of rock components), which impacts electrical resistivity measurements and, therefore, estimates of hydrocarbon reserves. Conventional resistivity-saturation-porosity methods for assessment of water/hydrocarbon saturation do not reliably incorporate the spatial distribution of rock components and pores in the assessment of fluid saturation. Extensive calibration efforts are required for indirectly projecting the impact of rock fabric on resistivity models. For instance, none of the existing shaly-sand models incorporate a realistic distribution of clay network. This might be acceptable in conventional reservoirs. However, oversimplifying assumptions can cause significant uncertainty in reserves evaluation in organic-rich mudrocks. It should be noted that even the methods which incorporate the realistic distribution of rock components are difficult to calibrate. To address the aforementioned challenge, we introduce a joint interpretation of conventional resistivity and resistivity image logs to improve water saturation assessment by honoring the type of rock component, the spatial distribution of the conductive and non-conductive rock components, and the volumetric concentration of fluids and minerals in the rock. Borehole image logs are a source of high-resolution continuous rock sequence records and can provide detailed rock-fabric-related features. In this paper, we propose a method for the estimation of lamination density and mean resistivity value from image logs within each rock type. These fabric-related features are used to quantify the geometric model parameters for each conductive component of the rock. We use these geometric model parameters as inputs to a new resistivity model that considers volumetric concentration and spatial distribution of rock components for a depth-by-depth assessment of water saturation. The other inputs to the workflow are the volumetric concentration of conductive and non-conductive rock components, electrical conductivity of rock components, and porosity estimates from the joint interpretation of well logs. We successfully applied the proposed workflow to a dataset from the Wolfcamp formation in the Permian Basin in which resistivity image logs were available. We observed a measurable variation in estimated image-log-based geometric model parameters, which were in agreement with the visual content of the images. Incorporation of the estimated rock-class-based geometric model parameters in the resistivity model improved water saturation assessment. Results demonstrated a relative improvement in water saturation estimates of 44.2% and 59.1% against Waxman-Smits and Archie's models, respectively. We then used the estimated geometric model parameters for each rock type for a depth-by-depth assessment of water saturation in one additional well without image logs. This led to a faster and more reliable assessment of water saturation within a certain distance from the well with image logs, where the rock types remain comparable. This distance can be evaluated using variogram analysis. We demonstrated that using the estimated geometric model parameters could improve estimates of hydrocarbon reserves in the Permian Basin by approximately 34%. It should be noted that the proposed method for assessment of geometric model parameters is completely based on the actual spatial distribution of rock components and does not require core-based calibration efforts.
Swiss oil trader Vitol said on 30 April that its oil and gas subsidiary, Vencer Energy, was buying Hunt Oil Company's assets in the Permian Basin for an undisclosed sum. Media outlets including Bloomberg and Reuters cited sources that pegged the asking price at around $1 billion. Houston-based Vencer was established last year as the trading giant's first foray into the upstream sector. The assets include leases on 44,000 acres in the Midland Basin side of the Permian, with an output about 40,000 BOE/D. "This is an important day for Vencer as it establishes itself as a significant shale producer in the US Lower 48. We expect US oil to be an important part of global energy balances for years to come, and we believe this is an opportune time for investment into an entry platform in the Americas," said Ben Marshall, the head of Vitol's Americas business unit.
Wu, Yinghui (Silixa LLC) | Hull, Robert (Silixa LLC) | Tucker, Andrew (Apache Corp.) | Rice, Craig (Apache Corp.) | Richter, Peter (Silixa LLC) | Wygal, Ben (Silixa LLC) | Farhadiroushan, Mahmoud (Silixa Ltd.) | Trujillo, Kirk (Silixa LLC) | Woerpel, Craig (Silixa LLC)
Abstract Distributed fiber-optic sensing (DFOS) has been utilized in unconventional reservoirs for hydraulic fracture efficiency diagnostics for many years. Downhole fiber cables can be permanently installed external to the casing to monitor and measure the uniformity and efficiency of individual clusters and stages during the completion in the near-field wellbore environment. Ideally, a second fiber or multiple fibers can be deployed in offset well(s) to monitor and characterize fracture geometries recorded by fracture-driven interactions or frac-hits in the far-field. Fracture opening and closing, stress shadow creation and relaxation, along with stage isolation can be clearly identified. Most importantly, fracture propagation from the near to far-field can be better understood and correlated. With our current technology, we can deploy cost effective retrievable fibers to record these far-field data. Our objective here is to highlight key data that can be gathered with multiple fibers in a carefully planned well-spacing study and to evaluate and understand the correspondence between far-field and near-field Distributed Acoustic Sensing (DAS) data. In this paper, we present a case study of three adjacent horizontal wells equipped with fiber in the Permian basin. We can correlate the near-field fluid allocation across a stage down to the cluster level to far-field fracture driven interactions (FDIs) with their frac-hit strain intensity. With multiple fibers we can evaluate fracture geometry, the propagation of the hydraulic fractures, changes in the deformation related to completion designs, fracture complexity characterization and then integrate the results with other data to better understand the geomechanical processes between wells. Novel frac-hit corridor (FHC) is introduced to evaluate stage isolation, azimuth, and frac-hit intensity (FHI), which is measured in far-field. Frac design can be evaluated with the correlation from near-field allocation to far-field FHC and FHI. By analyzing multiple treatment and monitor wells, the correspondence can be further calibrated and examined. We observe the far-field FHC and FHI are directly related to the activities of near-field clusters and stages. A leaking plug may directly result in FHC overlapping, gaps and variations in FHI, which also can be correlated to cluster uniformity. A near-far field correspondence can be established to evaluate FHC and FHI behaviors. By utilizing various completion designs and related measurements (e.g. Distributed Temperature Sensing (DTS), gauges, microseismic etc.), optimization can be performed to change the frac design based on far-field and near-field DFOS data based on the Decision Tree Method (DTM). In summary, hydraulic fracture propagation can be better characterized, measured, and understood by deploying multiple fibers across a lease. The correspondence between the far-field measured FHC and FHI can be utilized for completion evaluation and diagnostics. As the observed strain is directly measured, completion engineering and geoscience teams can confidently optimize their understanding of the fracture designs in real-time.
Huckabee, Paul (Shell Exploration & Production Co.) | Ledet, Chris (Shell Exploration & Production Co.) | Ugueto, Gustavo (Shell Exploration & Production Co.) | Tolle, John (Shell Exploration & Production Co.) | Mondal, Somnath (Shell Exploration & Production Co.)
Abstract This paper presents design considerations and field trial applications for determining practical dimensions and limits for interdependencies associated with stage length, perforation clusters and limited entry pressures. Recent applications by multiple authors and companies have begun to reverse the decade-long trend of reducing stage length and perforation spacing, in favor of extending stage lengths, to capture free cash flow value for unconventional resource development. Aggressive limited entry has been an enabler for successful extended stage length applications. Multiple authors have advocated "eXtreme Limited Entry" (XLE) applications. We present diagnostics data and applications that challenges the need for XLE and better constrains the necessary amount of limited entry pressures for effective stimulation distribution for resource development across multiple North American Basins. Data is presented from integrated application of field trials, stimulation distribution diagnostics, and well performance analysis. Field trials and well performance analysis are from the Permian Delaware Basin Wolfcamp. The field trials include both: greater perforation cluster intensities for base design stage lengths; and extended stage lengths of 50% greater than the base designs. Diagnostics are from multiple North American Basins and include discrete treatment pressure diagnostics and optic fiber distributed sensing. Data is presented to quantify the magnitude and variability for components necessary for maintaining active fracture extension for multiple perforation clusters. Components include: fracture breakdown pressures; in-situ stress, net fracture extension pressure, and near wellbore complexity pressure drop. Data and examples are presented from multiple wells, and resource development areas, to show the variability in measured treatment pressures for different length scale dimensions. This variability is used to determine the amount of limited entry pressure required to maintain fracture extension, dependent on the stage length dimension. Although Aggressive Limited Entry (ALE) is generally required to enable effective stimulation distribution and extended stage lengths in multiple cluster stages, examples are presented that demonstrate XLE is generally not required. We also discuss some of the considerations and observations that limit perforation cluster spacing intensities. Well performance data from the field trials is presented to validate the applications. This work demonstrates the value of integrated application of field trials, stimulation distribution diagnostics, and well performance analysis to capture free cash flow value from improved completions and stimulation designs. The discussion will include an assessment of future opportunities for further extension of stage length dimensions.