Surviving the New Oil Price Landscape: A Case Study Breaking Down Liquid-Rich Basins in the Rockies
- Karthik Srinivasan (Schlumberger) | Jayanth Krishnamurthy (Schlumberger) | Shannon Borchardt (Schlumberger)
- Document ID
- Society of Petroleum Engineers
- SPE Western Regional Meeting, 22-26 April, Garden Grove, California, USA
- Publication Date
- Document Type
- Conference Paper
- 2018. Society of Petroleum Engineers
- 1.6.9 Coring, Fishing, 1.6 Drilling Operations, 7 Management and Information, 7.1.6 Field Development Optimization and Planning, 2 Well completion, 2.4 Hydraulic Fracturing, 1.6.6 Directional Drilling, 2.5.2 Fracturing Materials (Fluids, Proppant), 7.1 Asset and Portfolio Management, 7.4.3 Market analysis /supply and demand forecasting/pricing, 7.4 Energy Economics
- Large fracs, high-graded well locations, Unconventional resources, Rockies, Williston, DJ, Uintah and Powder River Basins, Proppant and fluid volumes, Proppant intensity, Oil price volatility, Market uncertainty
- 5 in the last 30 days
- 173 since 2007
- Show more detail
- View rights & permissions
|SPE Member Price:||USD 9.50|
|SPE Non-Member Price:||USD 28.00|
The oil and gas production landscape in North America has seen a paradigm shift since the collapse in oil prices in 2014. Although prices remain challenging, several operators have managed to sustain the relatively long period of low margins through some aggressive approaches. This paper inspects changes in operating strategies and field development plans across all oil-rich basins in the US Rocky Mountain fields and how operators have used a combination of low oilfield service prices, high-graded well locations, and incremental fluid/proppant volumes to increase production.
The paper investigates the transformation in operating philosophies since 2014 in four oil-rich basins in the Rocky Mountain region—Williston, Denver-Julesburg (DJ), Uinta, and Powder River. The Bakken formation in the Williston basin represents one of the best-quality rocks in all of North America. However, high oil-price differentials and well costs have made it difficult for drilling to remain profitable. The core of the DJ basin (Wattenberg) has one of the lowest break-even prices in the region, and rig count continues to increase as operators start seeing signs of recovery in the market. The Uinta basin, although relatively small in size, has shown tremendous return potential in the form of multiple stacked pays and promising production results. The Powder River basin poses one of the toughest operational environments in the region owing to wildlife stipulations, harsh weather, and deeper targets.
High-graded well locations in the Bakken are limited to few fields, which limits the scope of expansion in the current oil price environment. The DJ basin is challenged with high-density well spacing; estimated ultimate recovery (EUR) per drilling spacing unit (DSU) continues to increase, but EUR per well has gone down by as much as 60%. In the Uinta basin, formations never known to be continuous in the Green River group have shown significant return potential. The Powder River basin has recently attracted large investments from major independent operators as they tackle drilling challenges associated with abrasive rocks and testing optimum lateral landing points.
Case studies show how operating strategies have changed with changes in oil prices. The Bakken and DJ basins are relatively mature, and as drilled-but-uncompleted (DUC) inventory continues to increase, depletion from existing wells and interference between fractures is impacting production from new wells. The Powder River basin is still in the exploratory phase, and operators are still working on reducing well-costs, optimizing fracturing-fluid/proppant volumes, and examining productivity of other target rocks. The Uinta basin is in the early phases of expansion, with many of the fields still being explored for scalability. Changes in production maps and completion trends provide a comprehensive understanding of how these variables have impacted oil output from the region since 2012.
|File Size||3 MB||Number of Pages||21|
Fouch, T. D., Wandrey, C. J., Pitman, J. K.. 1992. Natural Gas Accumulations in Low Permeability Tertiary and Cretaceous (Campanian and Maastrichtian) Rock, Uinta Basin, Utah. U.S. Department of Energy Office of Fossil Energy, DOE/MC/20422-3051 (DEC92001132). https://www.osti.gov/scitech/servlets/purl/5677188 (accessed 29 January 2018).
Gonzales, V., Barham, M., Lawless, P.. 2012. Understanding Production Drivers and Challenges in Converting a Vertical to Horizontal Oil Play Utilizing Single Well Modeling. Presented at the SPE Canadian Unconventional Resources Conference, Calgary, Alberta, Canada, 30 October–1 November. SPE-161771-MS. https://doi.org/10.2118/161771-MS.
Kringstad, J. J. 2017a. https://ndpipelines.files.wordpress.com/2012/04/ndic-meeting-10-24-2017-full-page-slides.pdf (accessed 28 January 2018).
Kringstad, J. J. 2017b. Bakken Economics Full Slide Deck. https://ndpipelines.files.wordpress.com/2012/04/kringstad-ndpa-econ-slides-march-2017.pdf (accessed 28 January 2018).
North Dakota Department of Mineral Resources. North Dakota Daily Oil Produced Price. https://www.dmr.nd.gov/oilgas/stats/DailyProdPrice.pdf (accessed 28 January 2018).
North Dakota Pipeline Authority. 2012. Williston Basin Petroleum Conference, May 23, 2012. https://ndpipelines.files.wordpress.com/2012/04/ndpa-wbpc-5-23-2012.pdf (accessed 28 January 2018).
North Dakota Pipeline Authority. 2017. Estimated Williston Basin Oil Transportation. The Pipeline Publication 8 (2). https://ndpipelines.files.wordpress.com/2012/04/ndpa-newsletter-v8i2-august-2017.pdf (accessed 28 January 2018).
Ruble, T. E., Lewan, M. D., and Philp, R. P. 2001. New Insights on the Green River Petroleum System in the Uinta Basin from Hydrous Pyrolysis Experiments. AAPG Bulletin 85 (8): 1333–1371. https://doi.org/10.1306/8626cab9-173b-11d7-8645000102c1865d.
US Department of the Interior, Bureau of Land Management. Greater Sage-Grouse in Wyoming. https://www.blm.gov/programs/fish-and-wildlife/sagegrouse/state-sagegrouse-efforts/wyoming
US Energy Information Administration. 2015. Lower 48 States Shale Plays. https://www.eia.gov/oil_gas/rpd/shale_gas.pdf (accessed 28 January 2018).