Refrac Candidate Identification, Design & Economics

The science of refracturing has become a serious topic when discussing unconventional reservoirs in the US. Whether that's a derivative of the primary hydraulic fracturing market slowing down as a function of commodity pricing, or a trend driven by the convergence of developing technology and economics, remains to be seen. Hopefully, the latter, because it is science and technology – not hydraulic horsepower – that delivers production.

Hydraulic frac programs applied to any reservoir – conventional or unconventional, vertical or horizontal, initial frac or refrac – have inherent operational and economic challenges. Selecting locations with the best likelihood of success is critical. Best practices in approaching vertical and horizontal refracs is similar to prospecting for initial frac/stimulation candidates. Are there quantifiable reserves and appropriate reservoir pressure? Is the well conduit integrity competent enough to avoid hazards? Addressing these questions in a robust, methodical way is essential to success.

A comprehensive engineering approach ensures that you apply inter-disciplinary, optimal well design, maximize ROI and optimize stimulation effectiveness. This process is equally as critical when considering a refrac campaign on any existing well. And in today's market, one must process NPV of recovery of the reserves vs. the "Contango" concept of leaving hydrocarbons in the ground until commodity prices are higher. 
 

Steamline Refrac Programs at a Fraction of the Cost of a New Well
The goal of the SIGMA³ Engineering team is always to lower costs and maintain or increase production. This is especially the case during economic downturns. One method that improves production in existing vertical wells is to recomplete or "refrac". In horizontal shale wells, refrac'ing has the same goal but greater technical challenges. IHS reports that by 2020 up to 11% of all horizontal wells in the U.S. will be refrac'd.¹

To effectively refrac a horizontal well, one must (1) identify candidates, (2) design refracs, (3) oversee the refrac on-site, and (4) evaluate post-refrac production.

SIGMA³ is a member of a consortium that provides these engineering services.

Find the Good Ones
To identify refrac candidates, we gather and sort their public and operator-supplied data, including completion and production. From the these data, the poor candidates are culled and the top candidates are kept.

For each top candidate, we generate a model that matches its production history. We then use the model to forecast future production. Next, we design a refrac completion program specific to each well. Using the new completion programs, we create an altered production forecast. We then cull the poor candidates again, comparing the altered refrac forecasts to the original forecasts. The final list of wells contains those whose refrac forecast is substantially greater than the original forecast.

Make Them Better & More Cost-Effective
For the final candidates, we model new, streamlined refrac designs in conjunction with cost-effective economics. Each new refrac design generates a family of fracture geometries along the lateral. We compile the geometries for each design and forecast each design's production.

Modeling hydraulic fracture geometries for
neighboring perforation clusters.
 

These forecasts are combined with client-specific operating costs and oil and gas pricing. The oil and gas pricing includes future indexes, constant percent escalation, and constant price. The production pricing scenarios and refrac capital costs determine payoff time and net present value (NPV). The highest NPV and the quickest payoff time point to the optimum refrac design.

Breathe New Life into your Reservoir
An optimum refrac design is only a design and requires experienced execution and analysis. SIGMA³ will execute the refrac stimulation using real-time, on-site management to make any design changes necessary to address and overcome unexpected anomalies. After the refrac, we will evaluate the stimulation (i.e., production) while maintaining a focus on learning and innovating, as needed.

The current cost of producing oil makes revitalization of existing reservoirs very enticing, but it requires close scrutiny to ensure worthwhile ROI. Cookie-cutter drilling and completion strategies are not appropriate for any well, especially heterogeneous shale. While there's no such thing as a silver bullet, refracs work, depending on when and where and how they are applied. Through the advent of better technology concerning both fracturing fluids and proppants, incremental conductivity is possible. Job sizes can be increased to expose the wellbore to additional new rock, as well as accessing new areas of the reservoir via isolation/diverting techniques. You can re-energize natural fractures, frac past condensate blocks, induce additional complexity, and rearrange existent proppant packs.

With proper supervision and engineering, all of this is possible at a fraction of the cost of drilling and completing a new well. SIGMA³ engineers apply the same, proven methodology to refrac a well as we do when designing completions for new wells. Treating every frac like the first frac ensures you will identify the best stages, optimize stimulation effectiveness, and maximize EURs.

 

Support Materials


¹Refracturing Technology Waiting for Next ‘George Mitchell' to Drive Innovation, Reduce Risk & Costs, IHS Newsroom, 7 July 2021