Posted on 08/18/2015 4:55:50 AM PDT by thackney
Shale oil producers from West Texas and North Dakota have harvested enough crude to overwhelm the global oil market and force Saudi Arabia's oil cartel to play offense on the world's energy stage.
But U.S. producers have recovered only a small fraction of the oil that's trapped in those rocks, and though the oil-market crash has put the nation's energy boom on hold, some oil-technology companies are pursuing what they say will be a second American shale revolution.
That belief lies partially in re-fracking - giving oil shale deposits a second blast of water, chemicals and sand - to get more oil out of depleted or under-performing wells. The process could be up to two-thirds cheaper than drilling a new well, which is an alluring possibility for cash-strapped U.S. producers who are straining to keep operational costs down and drilling operations intact.
Over the next few years, thousands of wells could be in play for re-fracking, said Priyesh Ranjan, who manages the re-frack business and technology development at Halliburton...
Re-fracking can boost a well's productivity by a third to half, reaching up to 12 percent of the oil stored underground. "Which is still quite deplorable," Freitag said. But it's comparable to amounts early oil companies were able to extract from sandstone nearly a century ago. The oil is down there, and as technology improves, drillers will eventually be able to reach it, he said....
Talk of re-fracking has grown in recent months, but it hasn't hit it big yet....
"This technology is very much in its infancy and it's not going to be something that's going to change the game or move the needle at least in the near term," said Jonathan Garrett, an analyst at Wood Mackenzie....
(Excerpt) Read more at houstonchronicle.com ...
Take that opec!!
Did we have the technology for fracking in the 1970s but just didn’t know how to use it? (Just curious)
Yes, we did have it then but it was more expensive than regular drilling. This now really changes things, especially when the Arabs thought they could flood the markets, no pun intended.
American exceptionalism and ingenuity on display again. Imagine that!
What is different now in the cost equation about fracking? Why was it more expensive than a new well in 1973 but less expensive than a new well in 2015?
I suspect this is called “reworking” a well. Yes, it is cheaper than exploration and step out drilling. Some of the conference calls I have listened to have been touting these actions as a response to lower prices. What they cannot do anything about though is the over supply that exists in the market these days. So those firms which are producing below the costs of production and debt service are in a lot of financial trouble IMO. It also blows out of the water the concept of “peak oil”.
It has been many years since I have had any success at all with refracking.
Given the political instability of the Middle East, Nigeria and Venezuela, oil consumers around the world can no longer trust OPEC to get stable supplies of crude oil, especially since one wrong move could result in a crude oil supply cutoff. As such, that's why the USA is expanding domestic production and China signed that US$400 billion deal with Russia so they can avoid as much as possible having to depend on OPEC for crude oil supply.
Hydraulic Fracturing has been used by oil/gas companies since the late 1940s.
http://www.geosociety.org/criticalissues/hydraulicFracturing/history.asp
The more recent change that allowed tight formations like shale to become economic was steerable horizontal drilling.
That combined with hydraulic fracturing made the difference. But many advances in hydraulic fracturing, changing details were done by George P. Mitchell.
The firm spent nearly two decades developing hydraulic fracturing, finally finding success in North Texas’ Barnett Shale formation in the 1990s.
“There’s no point in mincing words. Some people thought it was stupid,” Dan Steward, a geologist who began working with the Texas natural gas firm Mitchell Energy in 1981 told The Associated Press in an interview last year. Steward estimated in the early years, “probably 90 percent of the people” in the firm didn’t believe shale gas would be profitable, and that Mitchell’s company didn’t even cover the cost of fracking on shale tests until the 36th well was drilled.
Reworking is a more generic term that covers many different treatments. The vast majority of reworking a well is not hydraulic fracturing.
Yet gasoline is still 2.50 a gallon.
Hydraulic Fracturing is not comparable to drilling. It does not use a drill rig. It is a completion method done after the well is drilled. It is more comparable to acid treatments than drilling.
Thanks. Very interesting. I will read those links.
I’ll start googling for “refrac-earthquakes” in about a month.
< spit > Treehuggers! < /spit >
Thanks Thackney...how’s biz in the Spraberry/Wolf/Cline?
This is a good one on the history as well.
http://www.ourenergypolicy.org/wp-content/uploads/2013/07/Hydraulic.pdf
>Did we have the technology for fracking in the 1970s ?
Yes, but didn’t have horizontal and directional drilling. Directional drilling can go horizontally along thin layers of oil bearing shale. That allows the fracking to be more effective.
As others have said, directional made fracking more useful.
But the real LESSON we should learn is that the industry is not sitting on its ass while prices are low. There is tremendous investment into R&D to lower costs, extract more hydrocarbons and to improve technologies.
Meanwhile, solar is using 1970s technology and wind is stuck in the dark ages. In fact, muslims should support wind power because it fits with their 12th century mindset!
Seriously, the productivity improvements that have happened in the last 10 years within the hydrocarbon sector puts all other sources of energy to shame.
Energen Ups Capex 10% to Focus on Wolfcamp, Spraberry
http://www.naturalgasintel.com/articles/103276-energen-ups-capex-10-to-focus-on-wolfcamp-spraberry
Permian-focused Energen Corp. said it will increase its capital expenditure (capex) budget by 10%, to $1.1 billion, for the full-year 2015 so it can focus on development and appraisal programs in the Wolfcamp and Spraberry formations, and expects the company’s overall production to increase by nearly 20% as a result.
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ExxonMobil Increases Position in the Permian with 48,000 Acre Acquisition
http://www.oilandgas360.com/exxonmobil-increases-position-in-the-permian-with-48000-acre-acquisition/
“We are continuing to grow our position in a prolific area of the Permian Basin,” said Randy Cleveland, president, XTO Energy. “The recent emergence of strong Lower Spraberry results, combined with the established Wolfcamp intervals, demonstrates the significant potential of the stacked pays in the Midland Basin core.”
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Recent Investment Analysts’ Ratings Updates for Pioneer Natural Resources (PXD)
http://www.dakotafinancialnews.com/recent-investment-analysts-ratings-updates-for-pioneer-natural-resources-pxd/364651/
7/16/2015 – Pioneer Natural Resources was downgraded by analysts at Zacks from a “buy” rating to a “hold” rating. According to Zacks, “Pioneer Natural Resources’ expects over 10% year-over-year production growth or the second quarter of 2015. The company’s first-quarter revenues increased but earnings declined year over year. Total production in the most recent quarter also rose by approximately 28%, due to robust yields in the core growth assets of Spraberry field and Wolfcamp Shale. Moreover, its joint venture in the southern Wolfcamp acreage is helping to accelerate activities in the area. The company has reduced its capital expenditure by 45% from 2014 to $1.85 billion in 2015. Of this, the company has planned drilling capex of $1.6 billion and capital for development of the Spraberry/Wolfcamp water infrastructure and vertical integration of $0.25 billion.”
Peak Oil!
I almost bought into it.
Next question, Should I buy Tesla now? I hear it is going to the moon!
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