Shale Oil Fiasco

[James Gautreau + 86]

Early goings I'm not so sure. Sure the technology is impressive, but the Data While Drilling technology only means you're not drilling dry holes or questionable holes. It is not increasing the EUR. Extreme Limited Entry may increase a little as it matches pressure to rock formation to length, but it does not seem to me a game changer. Sorry we are in the late innings of the shale revolution. You will never be able to match the decline rates, let alone grow. 

[Coffeeguyzz + 454]

Mr. Gautreau

Interesting perspective.

Ancient Greeks are said to have gleaned future probabilities by 'looking backwards' ... somewhat akin to viewing the wake of a boat in saltwater.

(Late Saturday afternoon return after a few beers provides a good example).

By seeing where one has been, the future destination may be more accurately determined.

Using that filter, a quick backwards glance at analyses from 2010, 2014, heck even 2017 would show how wildly wrong most everybody was compared to the actual numbers of today.

No, Mr. Gautreau, there are a LOT of hydrocarbons out there.

Based upon my decade of closely following these developments, I am convinced that the 'best' is yet to to come in terms of amount t recovered.

Gar. Own. Teed.

[Ward Smith + 6,615]

WPX just paid $2.5 billion for Felix Energy II. More Permian Delaware position

[James Gautreau + 86]

We shall see. 

[Gerry Maddoux + 3,627]

16 hours ago, James Gautreau said:

Sure the technology is impressive, but the Data While Drilling technology only means you're not drilling dry holes or questionable holes. It is not increasing the EUR. Extreme Limited Entry may increase a little as it matches pressure to rock formation to length, but it does not seem to me a game changer.

I'm not sure about that. Both Halliburton and Schlumberger have these drill-bit sensor-computer programs that allow you to take these Measurements While Drilling and optimize not only drilling, but, as Coffeeguyzz noted, examine the lithology they're drilling through, basically in real time. As he pointed out much better than I could, that data basically drives the next stage: completion. By knowing the rock, one can tailor the fracking for maximal internal rock exposure, creating a rivulet of penetrations, farther and farther into the interior. One of these fractures might not be a big deal but there are hundreds of thousands, almost like aftershocks following an earthquake, and each one drives proppant into the fissure. These vintage wells up in the Bakken were fracked by Braille; nobody had a clue what to do. Try guar gum. Slickwater. Polymers. It's rock, isn't it? Split it open. Hell, give it another shot. Well, rock is different in structure, grain, integrity, compactness.

Take a rock and soak it in oil for 250 million years and it gets even more complex. These software systems are exceptionally enabling. The one Halliburton has is called Cerebro--though that's probably "old" by now. Oil makes "Tombstone Rock" more easily fractured, not less, because oil crowds in and fiddles with the internal architecture of the matrix. Therefore, one could almost say that the software is oil-seeking. Integral information is stored in the cloud. It can be called down ad lib for a tailor-made fracturing process. And that right there is how you get from 10% recovery to 20%, just like that.

I may sound like nothing but a cheerleader but I'm as serious as a crutch. This is a business to me, and I'm passionate about it. I sincerely believe, in my heart, that were it not for shale basins yielding up LTO, the United States of America would be in a jam right now. I think these shale pioneers are getting the short end of the stick. Let's stop laughing at them and give them a hand-up; employ them to interface projects and roll the dice that have by now become loaded. These are real men, taking risks because the folks in various and sundry administrations told them to take them, in order to make America energy-independent. Well, when you take risks, sometimes you win and sometimes you lose. But were it not for those pioneers, there would be no Cerebro. And you can take that to the bank.

Edited December 17, 2019 by Tom Kirkman
Added paragraphs to break up wall of text

[Douglas Buckland + 6,308]

12 hours ago, James Gautreau said:

Early goings I'm not so sure. Sure the technology is impressive, but the Data While Drilling technology only means you're not drilling dry holes or questionable holes. It is not increasing the EUR. Extreme Limited Entry may increase a little as it matches pressure to rock formation to length, but it does not seem to me a game changer. Sorry we are in the late innings of the shale revolution. You will never be able to match the decline rates, let alone grow. 

I am not familiar with this Data-While-Drilling technology, so perhaps someone can help me out.

Mr. Gautreau stated that this technology prevents you from drilling dry or questionable holes. How does it do this as you are already drilling ahead when this tool is deployed? I assume that it doesn’t change the fluid or rock properties. Furthermore, wouldn’t this tool be basing any ‘machine learning’ or AI on material which has already been drilled through? How does this predict a properties change or suggest a different wellpath?

With any of this computer assisted equipment or processes, it is still ‘crap in= crap out”. What I am alluding to is that various assumptions must be made to set up the tool, if these assumptions are wrong then there is a good chance that the ‘suggestions’ emanating from the tool are wrong as well.

The same thing happens in seismic work, if you input an assumed sonic travel velocity for the assumed lithology you can make the lithology look fantastic or like a goat.

Finally, your geologists and geophysicists came up with the drilling location long before a rig moved on it. Are you telling me that once this occurs that you are now going to believe a tool making decisions on rock already drilled to ensure you do not drill a dry or questionable well?

It sounds to me as if some operators are forcing themselves to believe in this new technology as opposed to doing their ‘due diligence’ in regards to the geology, geophysics and proper well planning and construction.

[James Gautreau + 86]

By comparing the rock and geology of gushers to dry holes you can get a good idea of whether a well is worth fracking. Drilling is about $2 million of the cost. A frac is $3 million. Completion is another $3 million. Ballpark. So if you drill the well and the rock looks bad, you count it as a DUC, you don't frac it, and you move on. Save $6 million. Assuming of course that the software made the right call. 

[Gerry Maddoux + 3,627]

2 hours ago, Douglas Buckland said:

I am not familiar with this Data-While-Drilling technology, so perhaps someone can help me out.

Measurements While Drilling. Nothing new there, except for marked improvement in analysis of the rock. More data than ever before.

2 hours ago, Douglas Buckland said:

What I am alluding to is that various assumptions must be made to set up the tool, if these assumptions are wrong then there is a good chance that the ‘suggestions’ emanating from the tool are wrong as well.

You're correct, except that the assumptions in this case aren't really made-up assumptions, they're usually accurate enough to not only help change the trajectory of the drill bore but tell the operator the lithology and oil-bearing content. That's stored for later.

 

2 hours ago, Douglas Buckland said:

The same thing happens in seismic work, if you input an assumed sonic travel velocity for the assumed lithology you can make the lithology look fantastic or like a goat.

Right again. Enhanced 3-D seismography can slap a lot of lipstick on a pig. But you know a lot about this--the moment to moment data that is coming back from the sensors regarding rock composition have improved dramatically with these new software programs. 

 

2 hours ago, Douglas Buckland said:

It sounds to me as if some operators are forcing themselves to believe in this new technology as opposed to doing their ‘due diligence’ in regards to the geology, geophysics and proper well planning and construction.

Due diligence about geology, geophysics and proper well planning was what resulted in the parent-child catastrophe of the eastern Permian. The wildcat wells were terrific, the pressure was high, and when infill was limited to a couple of wells per pad--just to test the waters--the results were good. Then, after humongous prices were paid for "great" properties, so high in fact that to be profitable an outfit had to drill a whole bunch of infills, it was discovered that there was a finite limit to how many wells could be drilled in many areas. In other spots, the same number of infill wells produced great and didn't adversely affect the parent well. That data--from heartache--was used to improve the software. In the Delaware, rich with stacked Wolf Camp and Bone Spring formations, I'm not all that sure it makes as much difference. But in the Niobrara, for example, the new software has shaved off at least one or two drilling days, allowed a single drill, and directed the sensibility of spacing. E-fracking has cut the expenses as well. 

*This is a bit frustrating: I'm not on here to try to be a know-it-all, and in fact, I can tell from your posts that you know much more about any of this than I do. I'm old and definitely not a cheerleader of shale. My supposition all along is that, were it not for the shale, the United States would be in a pickle. Sure, the KSA has been our "friend" for decades--ever since FDR met with the old king in the Suez Canal during WWII and gave him one of his wheelchairs. But the Saudis have been shown to be vulnerable, and if they were our main supplier I imagine the Iranians would have gone after them harder. Venezuela has been kaput. Russia? Well, maybe. The shale may be nothing more than a transition source of hydrocarbons but it won't be for lack of trying on the part of the drilling services. Right now, shut down fracking and you have an immediate supply issue of the first water. Maybe offshore will supplant this. Perhaps renewables will make it obsolete. But with 1.5 billion Chinese emerging, and 1.2 billion Indians as well, I suspect there's going to be a supply deficit in the not-too-distant future. That's all. I don't wish to argue these points, as your statements are more thoroughly steeped in firsthand knowledge than mine, but I am thrilled to see these new techniques flourish at last. On a personal note, Aubrey McClendon and Tom Ward drilled in the Hogshooter a long time ago, helped pull my family out of sheer poverty. I can't say for sure but I'd surmise that has something to do with my endorsement. 🤔

[Jabbar + 465]

12 hours ago, Gerry Maddoux said:

I'm not sure about that. Both Halliburton and Schlumberger have these drill-bit sensor-computer programs that allow you to take these Measurements While Drilling and optimize not only drilling, but, as Coffeeguyzz noted, examine the lithology they're drilling through, basically in real time. As he pointed out much better than I could, that data basically drives the next stage: completion. By knowing the rock, one can tailor the fracking for maximal internal rock exposure, creating a rivulet of penetrations, farther and farther into the interior. One of these fractures might not be a big deal but there are hundreds of thousands, almost like aftershocks following an earthquake, and each one drives proppant into the fissure. These vintage wells up in the Bakken were fracked by Braille; nobody had a clue what to do. Try guar gum. Slickwater. Polymers. It's rock, isn't it? Split it open. Hell, give it another shot. Well, rock is different in structure, grain, integrity, compactness. Take a rock and soak it in oil for 250 million years and it gets even more complex. These software systems are exceptionally enabling. The one Halliburton has is called Cerebro--though that's probably "old" by now. Oil makes "Tombstone Rock" more easily fractured, not less, because oil crowds in and fiddles with the internal architecture of the matrix. Therefore, one could almost say that the software is oil-seeking. Integral information is stored in the cloud. It can be called down ad lib for a tailor-made fracturing process. And that right there is how you get from 10% recovery to 20%, just like that. I may sound like nothing but a cheerleader but I'm as serious as a crutch. This is a business to me, and I'm passionate about it. I sincerely believe, in my heart, that were it not for shale basins yielding up LTO, the United States of America would be in a jam right now. I think these shale pioneers are getting the short end of the stick. Let's stop laughing at them and give them a hand-up; employ them to interface projects and roll the dice that have by now become loaded. These are real men, taking risks because the folks in various and sundry administrations told them to take them, in order to make America energy-independent. Well, when you take risks, sometimes you win and sometimes you lose. But were it not for those pioneers, there would be no Cerebro. And you can take that to the bank.

" . . . and give them a hand-up;"

"These are real men, taking risks because the folks in various and sundry administrations told them to take them, in order to make America energy-independent.".  

Gerry,

Really ?  

I appreciate your posts .  You obviously have useful knowledge to contribute.  However, I have to ask .  .  Did you invested all that money in shale producers and bought up all that prime shale acreage because as you now say " taking risks because the folks in various and sundry administrations told them (you) to take them,"

The government made you do it ? 

.  .  .  .  and you want   ". . . give them (you) a hand-up;"

Is "hand-up" the same as "hand out" ?

Is " hand up" a pseudonym for government bailout ? 

I agree with one statement, "sometimes you win , sometimes you lose."

Nobody takes responsibility for their decision, everyone is a victim.

The Federal Justice System is dead, now Capitalism and Free Markets are dead.  Is anything sacred  left to your United States ?

God Help America

Can't have an honest discussion with closed minds.  There is no known cure for SDS (Shale Derangement Syndrome).   Investors and Producers losses have traumatised.

 

Edited December 17, 2019 by Jabbar

[James Gautreau + 86]

I don't know. OPEC's 36 mbpd in 2017 is now 31.7 mbpd. 4% decline rate is 1.44 mbpd X 3 years is 4.3 mbpd. Now they say this is production cuts. When shale starts to decline, I don't believe they can turn on the spigot. 

[Jabbar + 465]

31 minutes ago, James Gautreau said:

I don't know. OPEC's 36 mbpd in 2017 is now 31.7 mbpd. 4% decline rate is 1.44 mbpd X 3 years is 4.3 mbpd. Now they say this is production cuts. When shale starts to decline, I don't believe they can turn on the spigot. 

Yes, thanks to your favorite President Trump's sanctions on Iran and Venezuela. 

OPEC Members ran up production the month before the Cuts they knew were coming. Example: Saudis had been avg 10 million/day all year.  After Oct 2, crash ran up to 10.6 million/day.   December 2018 cuts are an illusion.  December 2019 cuts are a joke.  

[Gerry Maddoux + 3,627]

16 hours ago, James Gautreau said:

1 hour ago, Jabbar said:

Nobody takes responsibility for their decision, everyone is a victim.

Not me, pal. But a bit of humiliation wouldn't hurt you. For the record, I am about as independent as they come. I had a successful career and am a registered Republican. However, to put a little color on this, as the young like to phrase it, every administration since about 1970 has deplored those in the oil and gas industry to "make America energy-independent." After the stark picture from depletion of onshore conventional wells and the sputtering along of offshore, making America energy-independent was reliant on LTO sources. I'm not saying a floor should have been placed under domestic oil, but it's sure as hell not a good idea to tweet out an admonition to the Saudis to pump and dump every time oil gets above $50. I don't care what you think you know about this, how much of an "expert" you've become in your thirty-something years of slam-bam thinking and analysis from listening to quarterly conferences, there are precious few places in the shale basins where <$50 oil is consistently profitable. At that price, the Saudi's welfare system doesn't get funded, either, even though they can lift for $12/bll. I'm just saying that when you encourage your homegrown drillers to go for it, and the only way they can do that is to frack, you need to give them a little political support, that's all. I voted for Mr. Trump but I think his stand on oil largely supports Big Oil, not the little outfits that actually pioneered this shale thing. In the future, please be aware that when you attempt to demean me, or what I may stand for, I will go for your jugular (in print, of course). I'm too old to take much of your bullshit.

28 minutes ago, James Gautreau said:

I don't know. OPEC's 36 mbpd in 2017 is now 31.7 mbpd. 4% decline rate is 1.44 mbpd X 3 years is 4.3 mbpd. Now they say this is production cuts. When shale starts to decline, I don't believe they can turn on the spigot. 

James, you left out a + sign. It's now OPEC+, and my sources tell me that Russia has found more oil than you can imagine. Not only that but their oil is actually consistently profitable at well less than $50. OPEC+ could flood the market in a month's time. I'm not a fan of Russia, and certainly not Putin, and even though they say they would never frack, they've been doing it for decades. Not only that but Russia has engineered ways to offload their natural gas burden: Nord Stream under the Baltic to Germany, the new pipeline through the spine of Pakistan, LNG to China. Have very little doubt, OPEC+ could ruin the market. Now just what they'd gain from that is debatable, but please don't delude yourself in underestimating what has happened under the radar in Russia, mostly in the Arctic Ice Circle.  

 

[Jabbar + 465]

1 hour ago, Gerry Maddoux said:

 

Not trying to demean anyone.  Just looking to clarify your statement

Don't understand your response so let me ask you .   .   .   .

* First, are you now saying the government should not bail out over-leveraged shale producers ?

* Second, are you now recinding your statement that oil busnessmen took risks and over leveraged because, "  .  .  .  .  the folks in various and sundry administration's told them to take them." 

Thanks in advance for your response.

Edited December 17, 2019 by Jabbar

[James Gautreau + 86]

1 hour ago, Gerry Maddoux said:

 

Why do you say that? They didn't in 2008. Saudi Arabia didn't increase production one twit when oil was $150 a barrel. Also have you seen a chart of oil discoveries? They peaked in the 1960's. 

[Jabbar + 465]

 

Some Conoco Unconventional Plans

 

In the Bakken, the company is incorporating its learnings from the Eagle Ford, bringing online three refrac pilots this quarter. It has earmarked some 300 candidates in the play.

Target plateau production in the Bakken will be 90,000–100,000 BOE/D with 3–4 rigs working. The company has moved to lower intensity completions, following “three drivers that really matter” in the play: tighter cluster spacing, less proppant, and a lower proppant-to-fluid ratio.

“With less proppant, our completion time and cost has fallen, and yet, our well productivity has increased, all resulting in a $2/bbl costs of supply improvement,” Macklon said.

The company also conducted an Eagle Ford stimulated rock volume pilot where it collected pore data parallel to the wellbore in an effort to better understand how to boost recovery (URTEC-2019-263). Macklon said the team found that its stimulation design was “creating a lot fractures but not allowing proppant to travel to fractures in between the clusters.”

Fractures close as pressure depletes without proppant to hold them open. A primary goal for ConocoPhillips will be to improve proppant placement and enhance near-wellbore drainage in its newer stimulation designs.

As for EOR, which fellow Eagle Ford operator EOG Resources has employed with some success, ConocoPhillips has identified opportunities to apply the method on its acreage that is not considered high volatility, or 40% of its total position in the play. Three natural gas EOR pilots are under way with results expected in 2020.    

In the Bakken, the company is incorporating its learnings from the Eagle Ford, bringing online three refrac pilots this quarter. It has earmarked some 300 candidates in the play.

Target plateau production in the Bakken will be 90,000–100,000 BOE/D with 3–4 rigs working. The company has moved to lower intensity completions, following “three drivers that really matter” in the play: tighter cluster spacing, less proppant, and a lower proppant-to-fluid ratio.

“With less proppant, our completion time and cost has fallen, and yet, our well productivity has increased, all resulting in a $2/bbl costs of supply improvement,” Macklon said.

[Ward Smith + 6,615]

7 hours ago, Douglas Buckland said:

I am not familiar with this Data-While-Drilling technology, so perhaps someone can help me out.

Mr. Gautreau stated that this technology prevents you from drilling dry or questionable holes. How does it do this as you are already drilling ahead when this tool is deployed? I assume that it doesn’t change the fluid or rock properties. Furthermore, wouldn’t this tool be basing any ‘machine learning’ or AI on material which has already been drilled through? How does this predict a properties change or suggest a different wellpath?

With any of this computer assisted equipment or processes, it is still ‘crap in= crap out”. What I am alluding to is that various assumptions must be made to set up the tool, if these assumptions are wrong then there is a good chance that the ‘suggestions’ emanating from the tool are wrong as well.

The same thing happens in seismic work, if you input an assumed sonic travel velocity for the assumed lithology you can make the lithology look fantastic or like a goat.

Finally, your geologists and geophysicists came up with the drilling location long before a rig moved on it. Are you telling me that once this occurs that you are now going to believe a tool making decisions on rock already drilled to ensure you do not drill a dry or questionable well?

It sounds to me as if some operators are forcing themselves to believe in this new technology as opposed to doing their ‘due diligence’ in regards to the geology, geophysics and proper well planning and construction.

I have a friend who's a PhD geologist who used to work for the Big boys and made serious bank working out the why's and the where's for drilling projects. Lately he's been working (when he can find it) as a mud logger. The "disintermediation" that has occurred in other industries for decades has come to roost in the oil patch. 

Up above @James Gautreauclaims no new oil has been discovered since the 1960's. He's partly right, all this oil in the Permian and Bakken and elsewhere was discovered in the 1950's and before. The geologists knew it was there, they just didn't have a way to profitably produce it at the time. Because of him I'm more familiar with the Bakken then the Permian. In the Bakken you have a payzone about 17 feet thick on average. Not very much, but it's got very high oil saturation if you can mobilize it. Hence horizontal drilling and fracking. 

While you've been right about poor well performance, a decade ago they were drilling by hook and by crook. They aimed and "hoped" they stayed in the "zone". Quickly they realized they needed better info on the drill floor and that's where you saw the mud logging companies spring up. They were as much as an hour behind, but missing some zone for the penetration rate (horizontal mind you) they were making wasn't the end of the world. They could even adjust their frac job to try and compensate. 

You and others keep saying there's no "new" technology and you're as right as James above. The basics were known, but the prize is big enough and computer dweebs are smart enough to digitize multiple lifetimes of deep knowledge and implement it in algorithms. Like Cerebro. 

Instead of trying to drill a straight line in what almost certainly is Not a homogeneous lithography, the smart software "dolphins" up and down like a sine wave. Peeking out of the payzone top and bottom tells them how thick it is and helps them largely stay in the midst of it (when not peeking). You might be "wrong" for a few hundred feet, but you're "right" for two miles. 

My friend worked a job recently with the newest doo dads and sensors running. He still did all the logging with state of the art equipment, but he wasn't there to guide anything. They just used him (and other PhD's trying to earn a living) to validate what the hardware and software was doing. 

[James Gautreau + 86]

Russia may have found some oil in the Arctic but they lack the technology to get it out. US sanctions aren't getting lifted anytime soon, and Putin shows no signs of leaving Crimea. 

[Gerry Maddoux + 3,627]

2 minutes ago, James Gautreau said:

Russia may have found some oil in the Arctic but they lack the technology to get it out. US sanctions aren't getting lifted anytime soon, and Putin shows no signs of leaving Crimea. 

That used to be true, but their engineers learned an awful lot from all the time Exxon and Shlumberger spent there. Go check out the big wells they've discovered. Again, this is not about how much Saudi Arabia can increase production--because I think you're dead right; they have declining fields with no new discoveries to speak of--but how much Russia (the + of OPEC+) can increase production. These new wells are massive, and why does that surprise anyone, they have methane whistling out of the ground now that the ice cap is getting softer. Thank God for the sanctions or Schlumberger would double their production for them in no time.

[James Gautreau + 86]

What massive wells are you talking about? Payakha fields?

[Gerry Maddoux + 3,627]

44 minutes ago, James Gautreau said:

What massive wells are you talking about? Payakha fields?

The Yamal Shelf in shallow waters in the Kara Sea. Said to be 1.5-2 billion boe. That's a damn big find. 

Not far from the big Pobeda (old name University-1) well that Exxon brought in six years ago. A bunch of Norwegian and Russian engineers were on-board; a lot of them are still working there. They know exactly what they're doing. 

Don't forget: Exxon only pulled out of its association with Rosneft in February 2018, due to the sanctions. It wasn't right at the time Russia invaded Crimea, as so many people think it to be. Heck, Exxon stayed in the Arctic Ice Circle long after Rex Tillerson became Sec. of State. Russia may be a crap place to live, and they may have sold Alaska for about what the big field produced in a day back when, but the same conditions that created the Arctic Ice Circle put a pot load of oil in the ground.

The only good news for US domestic oil? Global climate change is indeed happening . . . though I don't think it's manmade. So, the permafrost in the Arctic Ice Circle is melting, letting their drilling equipment sink into the soil. Ergo, these offshore wells are being drilled. Pity the time when they figure out how to drill in a softening landmass. 

[James Gautreau + 86]

Yeah it's not bad. 

[Gerry Maddoux + 3,627]

2 hours ago, Ward Smith said:

You and others keep saying there's no "new" technology and you're as right as James above. The basics were known, but the prize is big enough and computer dweebs are smart enough to digitize multiple lifetimes of deep knowledge and implement it in algorithms. Like Cerebro. 

The following is from Oil & Gas 360:

“The findings clearly show that a one-size-fits-all approach to well design and completions is wasteful, and that it’s time for the industry to choose the right well design, not the biggest, to maximize efficiencies and profitability,” said John England, partner, oil, gas and chemicals, Deloitte & Touche LLP.

Other key findings in the study include:

• Rock quality is important but is not necessarily the main performance differentiator. According to Deloitte’s analysis of all drilled wells in the Eagle Ford and Permian, the ranking of acreage (e.g., “Tier 1, Tier 2, Tier 3”) does not influence well performance to the extent previously assumed. More than 40% of wells drilled outside the core of the western Delaware area reported initial 180-day normalized productivity of more than 1,000 barrels of oil equivalent per day (boed). In the Eagle Ford, a comparable number of high-performing wells exist across acreage tiers.
• Bigger is also not always better. The statistical analysis further notes wells drilled over the last two to three years, with complex and intense completion designs (i.e., longer laterals, more proppants, etc.) actually led to diminished productivity, explaining some of the concerns from investors and financial markets. During this period, more than 3,000 wells that were completed with massive volumes of proppant (in excess of 1,800 pounds per foot) yielded productivity below 750 boed per 10,000 feet of perforated interval. Despite an increase in completion intensity of more than 40%, approximately 50% of U.S. horizontal wells had the normalized 180-day productivity of below 750 boed in the past four years.
• Optimizing well designs can boost capital efficiency. Deloitte found approximately 67% of wells in the Permian have been under- or over-engineered. A more balanced formation-and-engineering equation could improve the capital efficiency of Permian operators by approximately 23%. Similarly, approximately 60% of Eagle Ford wells have been under- or over-engineered. An optimal completion design strategy could increase capital efficiency of Eagle Ford operators by 19%.
• $24 billion could be at stake via optimization. Improving well-designs has the potential for U.S. shale drillers to reduce capital requirements by $24 billion. If achieved, E&Ps could achieve economic targets in a broader range of price scenarios, and thereby revive investor interest, per the analysis.

[Ward Smith + 6,615]

4 minutes ago, Gerry Maddoux said:

The following is from Oil & Gas 360:

“The findings clearly show that a one-size-fits-all approach to well design and completions is wasteful, and that it’s time for the industry to choose the right well design, not the biggest, to maximize efficiencies and profitability,” said John England, partner, oil, gas and chemicals, Deloitte & Touche LLP.

Other key findings in the study include:

• Rock quality is important but is not necessarily the main performance differentiator. According to Deloitte’s analysis of all drilled wells in the Eagle Ford and Permian, the ranking of acreage (e.g., “Tier 1, Tier 2, Tier 3”) does not influence well performance to the extent previously assumed. More than 40% of wells drilled outside the core of the western Delaware area reported initial 180-day normalized productivity of more than 1,000 barrels of oil equivalent per day (boed). In the Eagle Ford, a comparable number of high-performing wells exist across acreage tiers.
• Bigger is also not always better. The statistical analysis further notes wells drilled over the last two to three years, with complex and intense completion designs (i.e., longer laterals, more proppants, etc.) actually led to diminished productivity, explaining some of the concerns from investors and financial markets. During this period, more than 3,000 wells that were completed with massive volumes of proppant (in excess of 1,800 pounds per foot) yielded productivity below 750 boed per 10,000 feet of perforated interval. Despite an increase in completion intensity of more than 40%, approximately 50% of U.S. horizontal wells had the normalized 180-day productivity of below 750 boed in the past four years.
• Optimizing well designs can boost capital efficiency. Deloitte found approximately 67% of wells in the Permian have been under- or over-engineered. A more balanced formation-and-engineering equation could improve the capital efficiency of Permian operators by approximately 23%. Similarly, approximately 60% of Eagle Ford wells have been under- or over-engineered. An optimal completion design strategy could increase capital efficiency of Eagle Ford operators by 19%.
• $24 billion could be at stake via optimization. Improving well-designs has the potential for U.S. shale drillers to reduce capital requirements by $24 billion. If achieved, E&Ps could achieve economic targets in a broader range of price scenarios, and thereby revive investor interest, per the analysis.

Wanted to find a link to back my contention about computing so googled and imagine my surprise to find the answer Right next door.

Bottom line Re your points above, a lot of good information gets buried in gross statistics. If company A drills a long lateral with great engineering, companies B-Z copy them, but skip the great engineering part. Then the average looks bad, but they weren't all apples being compared. 

[Gerry Maddoux + 3,627]

4 hours ago, Ward Smith said:

In the Bakken you have a payzone about 17 feet thick on average.

Ward, the Three Forks shale is up to 250 feet thick in places. Usually, where that's the case, the Lower Bakken shelf is thicker too. If this data above translates to the Bakken, and I suspect it does, then this is a massive discovery! Already, up there, a lot of stuff that was previously tier 2,3 has been reclassified to tier 1 due mainly to some of the largest IP wells in what had been tier 2,3 acreage. The great thing about the Bakken is that (probably due to the fact that it's "clayey" shale) when a batch of child wells are fracked, the vintage well that has HBP'd the tract for several years and is now in freefall, usually gets refracked, even if it's shut in to prevent frac hits. Thanks for bringing the Bakken into the conversation, especially regarding technology. Marathon, Zavanna, Whiting and Crescent Point are real innovators in using drill bit sensors to make directional variations and to tailor a frack program for each well that is unique to that singular well. I'm always pleased when one of those operators comes onto a property where I hold an interest. I am personally a much bigger fan of the Three Forks than the Bakken shelfs, even though it's deeper. It seems to me that well economics are better in the TF.

[Douglas Buckland + 6,308]

‘Measurements While Drilling. Nothing new there, except for marked improvement in analysis of the rock. More data than ever before.’

This is what threw me! Someone mentioned a technology ‘data-while-drilling’, which I had never heard of. If they were referring to measurement-while-drilling (MWD), this technology has been available and being utilized for decades. 
 

Again, this is not ‘new’ technology.