The time it takes for an oil and gas company to drill, complete and put a well on production is not a metric the industry or investors have traditionally focused on. However, cycle time, meaning “time to market”, has a major impact on operator cash flow and overall profitability.
A critical component of cycle time is work-in-process (WIP).
WIP is the set of wells that have been spud but have not been put on production including all wells being worked on or waiting for next operation. Almost all operators track WIP, but few know how much WIP there should be and even fewer operators are actively controlling WIP.Another metric not well tracked by the industry: DUCs. DUCs are tracked by some but no has really figured out how to "quantify" them.
And finally, a third metric, the number of wells "off line" or "inactive" for operational reasons, generally while neighboring wells are being fracked. In the "old days" a neighboring frack might affect one older producing well. These days, a neighboring frack will easily take six neighboring wells off line for one to three months. On top of that, we are seeing fewer and fewer "single" wells being fracked. Now, due to pad drilling, we see six wells being fracked in rapid succession.
The newly fracked wells are producing upward was six times or more what we used to see with the Bakken wells drilled ten years ago.
And, finally if that's not enough, the older, neighboring wells are positively affected by new neighboring fracking (advantaged oil) and even if not significantly affected positively, they are "never" affected negatively in the Bakken.
"And, finally if that's not enough, the older, neighboring wells are positively affected by new neighboring fracking (advantaged oil) and even if not significantly affected positively, they are "never" affected negatively in the Bakken."
ReplyDeleteIt's probably just improvement over time, overshadowing the impact of infill drilling. It is well known that tighter spacing leads to lower EURs. Both for the new well and the parent.
https://www.enverus.com/blog/well-spacing-bakken-shale-oil/
Nope.
ReplyDeleteThe EURs in the early Bakken were in the 375,000-bbl range. The older parent wells -- with no new work whatsoever on the parent well itself -- in the Bakken -- either maintain their original EURs or get better. I've not seen any get worse. In some fields, the older wells are getting spectacularly better with no additional work. Mike Filloon noted the same thing some years ago and had the graphics to prove it.
Per the reader: "It is well know that tighter spacing leads to lower EURs. Both for the new well and the parent."
Let's say you put in one well in Williams County. A year later, you put in a new well, 50 miles away in Williams County. Those two wells are unlikely to affect each other but by definition, the spacing has gotten tighter -- in fact, the spacing has been cut by 50%; the spacing has been cut in half.
The trick is to find the optimum spacing. To say "across the board" that "it is well known that tighter spacing leads to lower EURs, both for the new well and the parent well" tells me that the reader does not understand the difference between conventional plays and unconventional (shale) plays.
Of course, we will never know. I have no idea whether using Rogaine actually helped prevent baldness in my case. There is no controlled study (I have no twin), and likewise, in the oil business, there are no controlled studies. One can try to get as good a study as possible, controlling for as many variables as possible, but it will never be 100%.