Speaking on April 21 during Hart Energy’s Refracturing: Cracking the Code breakfast seminar, experts from Baker Hughes, Weatherford, Fracknowledge and Eventure Global Technology agreed that refracturing has benefits. Potential also exists to learn more about which methods work best for certain reservoir conditions by testing concepts on some of the 8,000 or so drilled but uncompleted wells (DUCs) across North America.
However, low commodity prices have put refracturing programs in the Haynesville and Barnett on hold.
“We’re in a pricing environment where there is yet one more round of layoffs. Who’s going to go take risks like that?” asked Tim Leshchyshyn, president of Fracknowledge. “But if you actually look at the statistics, it’s amazing.”
Refracs account for less than 25% of the original drilling and completion costs, according to Leshchyshyn. Given oil is about half of what the industry wants it to be to thrive, there is inherently a 100% return on investment—with a quarter of the cost at one half of the return, he added. But, “The return on investment is sometimes 400%. This is above the incremental reserves. This is above net present values.”
The talk about refracturing opportunities and challenges came as companies continued to seek cost-efficiencies during a downturn brought on by a supply-demand imbalance. Refracturing instead of drilling could be among the options, considering costs associated with refracturing a well are about $1 million compared to between $6 million or $7 million to drill a new well.
What’s New? What Works?
Harsh Chowdhary, engineering manager for Eventure Global Technology, referred to a 2009 refrac job involving three wells from the same pad. Two wells used a chemical diverter and one used expandable lining. “When the refrac was done, the mechanical isolation well showed 40% higher production rates than the chemical diverter,” he said. “It is more costly than the other options, but I think experimentation and R&D is going to drive the technology.”