SAN ANTONIO – Better, faster, cheaper, safer – and with a lot more sand.
Operators and service companies in the Eagle Ford Shale have moved well beyond talking about the discovery of the Eagle Ford Shale and instead have shifted into sharing ideas about how to improve the recovery of oil and gas.
Companies are drilling more than one well on each pad location. The U.S. Energy Information Administration expects the field to produce around 1.5 millionbarrels of liquids daily this month. But even with big production gains, operators are leaving about 95 percent of the oil and gas molecules behind.
“We’re leaving a lot of rock unstimulated, and we’re leaving a lot of reserves behind,” said Richard Stoneburner, senior adviser with Pine Brook Partners and the retired president of BHP Billiton Petroleum’s North American shale production division.
Stoneburner spoke Wednesday at Hart Energy’s DUG Eagle Ford Conference in San Antonio. About 4,800 oil and gas professionals attended the event, which ended Wednesday.
The average volume of sand used per well during hydraulic fracturing was 8.6 million pounds in August, said Richard Mason, chief technical director for Hart Energy. That’s up about fourfold in the last nine months.
Mason said the field has gone from a “land grab” to a “sand grab” as companies scramble to secure consistent sand supplies for their wells.
“Are we opting to use more sand because everyone else is doing so or because it works? And how do we know it works?” Mason asked.
Some of the improvements companies are making have to do with speed and cost savings that come with repetition and experience. Houston-based BHP, which has 17 drilling rigs in the Eagle Ford, has had some wells that started drilling and reached total depth in seven days.
Other improvements are technical – understanding how the shale varies across the region, and often within the same ranch.
David Banks, Eagle Ford general manager for BHP, said Tuesdaythe lateral reaches on the company’s original wells were oriented north-south because that lined up neatly with the boundaries of the ranches that were leased. Shifting the well orientation by 30 degrees resulted in a 20 to 30 percent uptick in production, he said.
He said that shale development is more complex that people realize. The Eagle Ford rock that BHP targets isn’t a shale at all, but limestone, he said.
“I think as an outsider looking in before we got into shale, a lot of us thought they’re just big homogeneous slabs of rock,” Banks said. “You drill your wells, you frack it and everything is good. Nothing could be further from the truth.”
No matter the technical improvements in drilling and completing wells, Glenn Hart, a petroleum engineer and the chairman, president and CEO of Houston-based Laredo Energy IV, said it still comes down to the quality of the rock itself.
On Tuesday at the conference, Marathon Oil Corp. President and CEO Lee Tillman said the industry should address key “legitimate issues” including air quality, water management and roads with a sense of urgency.
“We must be responsible corporate neighbors and never lose sight of the fact that we’re guests in these communities and will be judged by our individual and collective actions,” Tillman said. “We as an industry must earn our license to operate each and every day.”
Houston-based Marathon, he said, has dropped its water use by 45 percent for hydraulic fracturing and relies on a water supply that’s mostly brackish, even though those wells are deeper (and more costly) for it to drill.
With production surging, industry talk also has turned to what to do with all the production. Crude oil exports have been banned since 1975, but the federal government said in June that condensate could be exported with minimum processing through a distillation tower.
Condensate is an ultralight oil that condenses from gas to liquid when it reaches the surface. It’s clear and resembles lighter fluid more than black crude. It’s prolific in the Eagle Ford – up to 45 percent of the liquids production in the field is condensate, according to Hart Energy.
Pioneer Natural Resources Co. and Enterprise Products Partners already have the green light to export the condensate. Pioneer President and COO Timothy Dove said at the conference that the companies in August and September shipped three cargo loads.
“They’re finding homes in places like Singapore, Japan and also Rotterdam, so there’s a very, very large petrochemical market out there that would love to diversify with U.S. supply,” Dove said.