New Technology Magazine Supplement - November 2011

November 2011

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Features

A fast-moving goal post Technology playing catch-up as producers firm up plans to tackle tight oil plays

Meeting the tight oil challenge Service outfits respond with a range of products, systems and innovations

20

Crude’s comeback Technologies developed for natural gas set to transform tight oil production

23

Stars aligned Technology, timing and tenacity unlock long-slumbering Bakken shale oil play

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Conventional crude’s second chance Evolving technology opens doors for new oil resource plays

Baker Hughes Canada Company . . . . . . . outside back cover

IHS Energy (Canada) Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Calfrac Well Services Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

NCS Oilfield Services Canada Inc.. . . . . . . . . . . . . . . . . . . . . . . 19

Departure Energy Services . . . . . . . . . . . . . . inside front cover

Quantum Downhole Systems . . . . . . . . . . . inside back cover

Frac Knowledge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-9

Sanjel Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

Ground Effects Environmental Services Inc.. . . . . . . . . 14-15

New Technology Magazine supplement | November 2011

1

All in a day’s work.

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Specialized pumping equipment, a state-of-the-art research and development facility that advances fracturing applications ever further and reliable sand storage and delivery thanks to our longstanding relationships with suppliers. Our highly experienced crews are involved from advance planning to on-site supervision.

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www.calfrac.com Service first philosophy • Technologies that work in the field • People that make the difference

editor's view

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Déjà vu all over again

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T

o witness the re-emergence of production growth in the conventional oil sector after almost four decades of steady production declines is to bring to mind that famous Yogi Berra witticism: “It’s déjà vu all over again.”

The sense of déjà vu comes straight from the experience of oil’s sister commodity, natural gas,

where the origins of crude’s comeback are traced. Much ink has been spilled describing the remarkable turnaround in the fortunes of natural gas, which as recently as the early years of this century was viewed as running out across North America. Multi-billion-dollar arctic gas pipelines and liquefied natural gas import terminals by the dozens were widely viewed as the inevitable response to make up for the coming shortfall.

That, of course, was before the paradigm-shifting transformation brought about by the twin techno­ logies of horizontal drilling and multistage fracturing. Originally pioneered by Mitchell Energy & Development in the Barnett Shale of Texas, the new techniques transformed the industry as they spread to other basins with such success that the pending shortage has turned into a persistently oversupplied market, driving down prices and reversing import plans to opportunities for natural gas exports.

And now, the same scenario is playing out for conventional crude oil as the marginal oil once left behind as not economical to produce, is transformed into new liquid assets due to the same technologies, adapted for use in oil pools.

In a sense, the technologies that have been too successful for the industry’s own good, among gas producers at least, are now offering a lifeline as they are being adapted to the oilfield. Horizontal drilling and multistage fracking, combined with healthy oil prices, have allowed the industry to take up much of the slack left by the gas glut by putting rigs, workers, capital and technology to work on tight and shale oil prospects.

While the application of these new technologies to conventional oilfields may not have quite the transformative impact they have had on natural gas, they have been credited with halting the decadeslong decline in North American conventional oil output in recent years, with mild upticks in production—once thought extremely improbable—now forecast over the short term.

As we report in this supplement, service companies large and small are actively pursuing new tools, processes and concepts to advance development of these plays, resulting in rapidly evolving technological change that will benefit not only themselves and the producers that put the technology to work, but the resource owners through increased royalties and the economy in general as activity levels are sustained in troubled economic times.

While this is to be welcomed, it is also instructive to bear in mind the conclusions of the U.S.–based National Petroleum Council (NPC), which cautions the industry to keep public perceptions in mind as activity ramps up. In its September report, Prudent Development: Realizing the Potential of North America’s Abundant Natural Gas and Oil Resources, the NPC acknowledges “public confidence in natural gas and oil development and in some of the associated regulatory mechanisms has frayed,” in part due to concerns about the impact of the increasingly widespread use of hydraulic fracturing.

While the rejuvenated conventional oil sector offers a resource base that “could provide substantial supply for decades ahead,” the NPC states that access to these resources depends on “responsible develop­ment practices being consistently deployed.”

Certainly, conventional oil is back on the front burner and will be increasingly under the spotlight as a result. It is still premature to say how large a contribution it will make to the energy picture in the dec­ ades to come, but if the experience of natural gas is any indication, further optimization of multistage horizontal techniques applied on the oil side could end up making current projections look altogether conservative in the years ahead.

Already, the NPC notes, “through technology leadership and sustained investment, the United States and Canada together now constitute the largest oil producer in the world.” A remarkable accomplishment, considering the sentiment of a few short years ago of an industry in North America in irreversible decline. To those who preached hydrocarbons represented a sunset industry, another Yogi-ism comes to mind: It ain’t over till it’s over.

Maurice Smith New Technology Magazine supplement | November 2011

3

Photo: Weatherford Canada Partnership

A fast-moving goal post Technology playing catch-up as producers firm up plans to tackle tight oil plays

By Ashok Dutta

SUNRISE INDUSTRY A Nabors Canada rig is at work near Dawson Creek, B.C. The advent of horizontal drilling and multistage fracturing is leading to a resurgence of oil drilling across North America.

T

alk to anyone in the energy industry about tight oil prospects in

and Ellerslie have had oil production going back decades,

western Canada and invariably the conversation will revolve around

yet only a fairly small percentage of the in-place resource

two issues: a major resurgence in the prospects of producing

has been recovered.

several more barrels and the strategic role of cutting-edge technology to make that happen.

While major Canadian oil companies are raring to go in their ef-

expect it to continue to be vibrant until at least the end

forts to invest big bucks in tapping into the resources in Alberta and

of my children’s careers and likely much longer. The future

Saskatchewan, some have also unveiled details of their ambitious capital

will depend on oil price and continuing the technical

expenditure plans.

entrepreneurial culture that has created the industry we

A case in point is Penn West Exploration, whose president and chief executive officer, Murray Nunns, said in midsummer that some $1 billion would

have today.”

be invested in the current year in four oil plays in western Canada, following

Innovative solutions

successful appraisals of the respective geology.

The service industry is well aware of the challenges and is

At stake for Penn West are tight oil formations in the Cardium play in

constantly sharpening its tools to come up with the most

central Alberta, the Spearfish Formation in Manitoba, carbonate geology in

apt and suitable solutions and to rise to the expectations

north-central Alberta and the Viking Formation of the Colorado Group in

of oil companies.

south-central Saskatchewan.

“We have gone through a learning curve and drilled horizontal wells with

“They [oil companies] are waiting for us to develop innovative solutions,” says Randal Biedermann, sales man-

multistage fracture stimulations,” he said then. “Western Canadian light oil

ager for completions with Weatherford Canada, adding,

plays have been underdeveloped for the past 40 years and the basin is now

“New products are being installed no sooner than they

undergoing a renaissance. We are positioning ourselves to be a major pro-

are being tested and commercially released. Over the

ducer in North America in the 100,000–500,000-barrel-per-day range.”

past five years, the industry has been growing immensely

It is not Nunns alone who is upbeat about the prospects.

and is pushing us towards new challenges and breaking

John Zahary, president and chief executive officer of Harvest Operations

new barriers. We have to chase different avenues to

Corp., says formations in western Canada such as the Cardium, Viking, Dina 4

“We have been forecasting the end of the conventional industry since the start of my career,” he says. “I

Conventional Oil's Comeback

make the product work.”

Technology Advances

According to Darryl Firmaniuk, Canadian engineering manager for

ments to it,” says Don Cappelle, regional business unit

for the industry are primarily a combination of multistage fracturing and

manager for drilling services with Weatherford Canada.

horizontal drilling. “Since 2005, we have been directly involved in rolling out

MWD is a tool used to gather several measurements

new technology for the Canadian market, and this is an ongoing process,”

while drilling downhole.

he says.

The latest products being showcased by Baker Hughes include the

“The EM tool is now retrievable and can be run with a dual battery setup. We have also added an Inc-Sonde

FracPoint systems used for open-hole applications. “It [the product] is run

[a system that gives the angle of the hole] to the bot-

in horizontal wells, with packers being placed strategically at intervals.

tom of the MWD tool. It offers a simple, economical,

That helps in realizing the complete production potential. We have also

sonde-based alternative, compared with more compli-

improved upon existing systems, like phenolic balls, that were encoun-

cated at-bit measurement systems,” he says.

tering some issues and have now been replaced with a new design,” Firmaniuk says.

The recently introduced IN-Tallic frac balls incorporate controlled

The Inc-Sonde measures inclination closer to the bit and on the fly while sliding and rotating, Cappelle explains. These capabilities help land the build section

electrolytic metallic technology, which allows for the balls to disintegrate

of the well and assist in avoiding severe doglegs in the

chemically during the production phase and to do away with any restric-

laterals, improving the potential for drilling higher-

tions during the flowback and production phase of a well. The technology

quality wellbores.

is based on an electrochemical reaction controlled by varying nanoscale coatings within the composite grain structure, the company says.

Two other new products in Baker Hughes’ arsenal are its FracPoint EX-C frac sleeve and OptiPort. While the former is a new sleeve design that

“With the information from the Inc-Sonde, our directional drillers will be able to react quicker and be more efficiently in drilling the well,” he says.

Weatherford has also introduced new HyperLine mud

allows for additional fracturing intervals, the latter—using coiled-tubing

lube motors that deliver almost double the operating

frac sleeve technology—offers unlimited numbers of interval capability to

torque and power output in comparison with other stan-

open the sleeves.

dard motors, thanks to its proprietary high-performance

Specifically designed for horizontal shale completions, the FracPoint EX-C multistage fracturing system uses 1/16-inch incremental changes

elastomer and high torque-bearing sections.

Other products on offer from Weatherford are the in-

in ball size to achieve an increased number of ball seats. The patented

field reference (IFR) and the multi-station analysis (MSA)

design provides additional mechanical support to the ball during pumping

for drilling multi-lateral wells with tight in-field spacing.

operations. “With EX-C, fracturing intervals could go up to 40 [stages], when

IFR surveys evaluate the magnetic influence of local

compared with 24 in our current FracPoint offering. More intervals imply

geology and measure how the direction of the earth’s

more entry points, increasing the prospects of enhanced recovery of crude

magnetic field varies through the oil or gas field. Apply-

oil from wells,” Firmaniuk says.

ing IFR corrections can improve the accuracy of existing

The benefits derived from OptiPort are best viewed from savings that

MWD data and all future MWD surveys by up to 30

could potentially accrue to an oil company from reduced surface costs.

per cent, says the company. MSA combines data from

The OptiPort frac sleeves are isolated and opened by the coiled tubing-

multiple survey shots to calculate any residual magnetic

deployed bottomhole assembly (BHA), eliminating perforating or pumping

interference from the BHA. This calculation can be

balls. The company says it has reduced average treating time by 45 per cent

applied to ensure survey data are not being corrupted

or eight hours and fluid usage per treatment by 30 per cent or 120 cubic

by magnetic interference or applied as a correction to

metres per well.

downhole data to improve the quality of survey results.

For its part, Weatherford has also rolled out several cutting-edge solu-

Houston-based Halliburton’s new XBAT is the

tions, particularly for horizontal drilling, to the Canadian marketplace. “Even

industry’s first azimuthal sonic imaging tool to

though our EM MWD [electromagnetic measurement while drilling] is not

measure anisotropy—which facilitates real-time

IMAGE: Baker Hughes Inc.

TECHNOLOGY EVOLUTION Baker Hughes’ next-generation Frac-Point EX-C completion system, specifically designed for horizontal shale completions, is capable of delivering up to 40 frac stages.

new to the industry, we have made some enhance-

completion systems at Baker Hughes Inc., the meat-and-potatoes solutions

New Technology Magazine supplement | November 2011

5

Technology Advances IMAGE: Weatherford Canada Partnership

DOUBLE THE TORQUE Weatherford’s new HyperLine mud lube motors deliver almost double the operating torque and power output compared to standard motors.

sonic geosteering—sonic fracture characterization and stress profiling for optimizing wellbore stability, the company states in an email.

“Identification of natural fractures and of formation stress-profiling is extremely important in identifying an optimal fracture stimulation program. Our GeoSharp LWD tool allows imaging while drilling in oil-

Along with enhanced output, oil companies also desire cost savings. Firmaniuk says it could vary between 30 and 80 per cent, depending on the number of horizontal wells.

Cappelle says the advantages could be virtually limit-

based and other non-conductive muds—commonly ran in oil and gas

less with the drilling of an increasing number of multi-

shale reservoirs—which are not available from any other oilfield service

lateral wells. “A smoother wellbore with minimal dogleg

company in the industry,” the company says. “From the completions and

severity is very critical when it comes to the production of

fracturing side, we have successfully deployed a number of cased and

the well. The savings are tremendous when you talk about

open-hole completion technologies, which significantly reduce the time

staying in the hole for double the time with the dual

and associated costs required for multiple fracturing treatments along a

battery, as it could save the client NPT [non-performance

horizontal wellbore.”

time]. Besides, the Inc-Sonde system allows companies to

Advantages A prime benefit oil companies target by applying the “latest and greatest” technology is improved recovery rates from wells. One of the most exciting results of horizontal multifrac technology is that it not only makes many

stay in the pay zone which results in better ROP [rate of penetration] and more production,” says Cappelle.

The new products carry varying price tags, ranging from $50,000 to $500,000.

But it is not cost but rather the benefit an oil company could derive that proves to be the win-win factor

used to give a second life to older depleted reservoirs originally completed

in the long run, according to Weatherford’s Biedermann.

with vertical wellbores only, the Halliburton statement says.

“Cost is generally overruled when measured against

Image: Baker Hughes Inc.

newly discovered tight oil reserves economic, but can in many cases also be TARGETING TIGHT OIL Baker Hughes’ FracPoint technology, often used in the Williston Basin’s Bakken tight oil play, is a modular system that can be optimized according to customer specifications.

The Cardium is one example of a previously exploited reservoir that is

We can now fracture five intervals with a single ball,

tal multifrac technology on production has been to reverse the trend of

increasing efficiency five times,” he says.

declining WCSB [Western Canadian Sedimentary Basin] oil production. We

According to Halliburton, the application of horizon-

are now seeing a steady increase in WCSB output as a result of this new

tal multifrac technology has allowed some newer tight

technology. In addition, Canada is becoming recognized globally as a cen-

oil plays to be economically viable.

tre of excellence for this technology, which other countries are beginning to beneficially apply.”

6

increased production and with higher efficiency levels.

seeing renewed activity, the company says. “The overall impact of horizon-

Conventional Oil's Comeback

From a drilling perspective, saving rig time saves the operator money. Having a good understanding of

Technology Advances

the formation being drilled and definitive measure-

techniques and deliver benefits to the customer. The success of this

ments to the adjacent formations allows operators to

project contributed to us being awarded another 60 horizontal well

drill more quickly with confidence of not drilling out

project utilizing MSA,” Cappelle says.

of the zone. It is not uncommon to save days off a well

While some oil companies are receptive to the latest technology and are willing to go that extra mile, others are as yet staying put.

from unplanned exits and sidetrack mitigation, the

“The real drivers are the majors, who have more money in their coffers.

company says.

The new products come with their fair share of chal-

For now, the small- and medium-size operators are playing a wait-and-

lenges, however, with service companies being pushed

watch game and evaluating successes of majors before taking that plunge,”

constantly to test the limits.

Firmaniuk says.

“For multistage fracturing, at its infancy the design

Service companies are not waiting for their order books to become heavy. Rather, they are on a treadmill to produce more innovative solutions.

was ball-activated sleeves. We then moved to coilactivation, and now there is activation of more than

“Technology is being developed all the time and we are using our

one sleeve with a single ball. Looking ahead, we are

engineering resources. A large engineering team from Weatherford is in

working to eliminate the ball altogether, as it will

Edmonton working with clients,” Biedermann says.

IMAGE: Baker Hughes Inc.

reduce the need to introduce a component to a wellbore that could be a potential obstruction,” Biedermann says.

Weatherford is also pursuing development of a product to keep a close eye on real-time, in-line fracture monitoring that would allow oil companies to monitor what is happening downhole.

At Baker Hughes, the envelope is being pushed constantly for the ability of completions equipment to handle higher differential pressures, says Firmaniuk. The company, which currently offers 10,000

Ball unseated

Test begins with ball on seat

pounds per square inch (psi), is working

460 hrs 100 hrs

210 hrs

0 hrs

to increase that to 15,000 psi to enable oil companies to crack rocks and geological structure more efficiently.

“It is being worked out of our R&D [research and development] centre at Houston. There are challenges

Innovation, both on the domestic and global fronts, is the mantra for service companies.

The Opti packer system, introduced recently in Canada, is a homegrown

involved in the process, as a new component will have

product that has performed successfully during field trials, Firmaniuk says.

to be tested from metallurgic and elastomeric perspec-

The product will now be introduced to the U.S. market. In a reverse vein,

tives,” he says.

the expectation is for the IN-Tallic controlled electromagnetic system to be

The verdict will be awaited, but success stories are already in hand for service firms.

“We have successfully completed a complex geom-

offered in Canada, given the success it has achieved after being used at the Bakken Formation in North Dakota.

Meanwhile, at a major industry conference in New York in early

etry well, which was a 20-leg multilateral, for Baytex

September, a top official of Halliburton said public concerns about

Energy [Corp.] in the Seal field. We worked along with

water usage and the chemicals used in fracturing fluids are driving his

the client to create efficiencies and complete the well

company to develop more environmentally sensitive fluids and reduce

in a safe and timely manner. A well of this magnitude

fresh water use.

requires precise engineering and tools, constant communication and teamwork,” Cappelle says.

He also cites another success story Weatherford accomplished recently for an unidentified firm in Alberta.

“We have just completed a program to drill 30

“We know water is an emotional issue,” says Dave Lesar, Halliburton’s president chief executive officer. “The issue of chemicals in fracturing fluids is a hot topic today and we are disclosing the chemicals that go into the ground. But we are also working to develop a new fracturing fluid that contains no petroleum products,” he says.

horizontal wells. With tight well spacing require-

One new Halliburton fracturing formulation is called CleanStim, with

ments, this project made use of two new survey

ingredients sourced exclusively from the food industry. “One ingredient

techniques to improve accuracy of the MWD system.

goes into cake mixes. Who can argue against these chemicals if they go into

An IFR survey was used to measure the variation of

our food every day?” Lesar says.

the Earth’s magnetic field across the area and the MSA analysis technique was used to measure and reduce the effects of BHA magnetic interference.

VANISHING BALLS Baker Hughes’ IN-Tallic controlled electrolytic metallic frac balls are designed to dissolve downhole.

At left, a ball in its seat measures 3.5 inches. It shrinks to 2.9 inches after 100 hours and 1.5 inches after 210 hours. At right, little is left after 460 hours.

Despite all their efforts, a major issue that service companies have to come to terms with is that technology is still proving to be a fast-moving goal post.

“With multistage fracturing, the whole industry was trying to make

Weatherford worked in partnership with our Tech 21

things work. However, now it seems we still have miles to go,”

Engineering Team out of the U.K. to introduce these

Biedermann says.

New Technology Magazine supplement | November 2011

7

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Meeting the tight oil challenge

FLUIDS DELIVERY Calfrac has launched several custom frac fluid solutions in the past two years designed to increase production, result in quicker cleanup and better flowback, and reduce produced water.

Service outfits respond with a range of products, systems and innovations

By Godfrey Budd

average, account for about 70 per cent or more of total completions and stimulations costs when using MSHF. Pointing to a chart used in the analysis, Tim Leshchyshyn, president of Fracturing Horizontal, says it refers to all formations, based on data his firm has gathered. He adds, though, that because some completions expenses are entered as part of drilling reports, “particularly in the case of open-hole packers,” his figure of around 70 per cent may understate the actual percentage of completions costs. “[It] could be five to 10 per cent higher.”

Leshchyshyn says that, once the oil is found, as much as 90 per cent of well productivity optimization is “fracrelated.” So, given the costs involved and importance of its role, implementing the best possible fracking program—for every well that uses MSHF—has become imperative for operators.

Also, because of the demand for fracking services, he

T

says, companies can no longer count on free consulta-

that are designated as “tight oil” because of their low porosity and perme-

of experience in the fracturing sector, Leshchyshyn is in

ability. Armed with these technologies, companies smell fresh profit potential

demand for his consulting services in North America and

from old oil reservoirs. In the Western Canadian Sedimentary Basin (WCSB),

overseas and as a conference speaker. He was conference

as the Canadian Energy Research Institute (CERI) noted in a report published

chair at the recent Shale Oil Summit for Western Canada

in June, “The industry is returning to old, thought to be depleted, reservoirs

in Calgary and will chair the Insight Tight Oil Forum in

equipped with horizontal well drilling techniques to recover more of the

Calgary in December. The reason has to be his firm’s

resource that remains in the ground.”

unique suite of services, which are geared to resolve

he stunning success of horizontal drilling and multistage fractur-

tions from fracking outfits, and must plan their comple-

ing technologies in shale gas has doubtless played a role in the

tions programs carefully in advance.

increased application of these technologies in conventional oil plays

With the lion’s share of conventional oil’s low-hanging fruit in the WCSB

some of the key well history/data challenges of the hori-

already exploited, and oil prices rebounding since the third quarter of 2009,

zontal fracking era—as well as play a key role in helping

operators have increasingly pursued tight oil plays in the Cardium, Viking,

companies figure out how best to proceed with each of

Bakken and elsewhere across the basin. CERI’s numbers for Alberta, for ex-

their specific frac jobs.

ample, highlight the expanded role of horizontal wells and tight oil plays in the

Fracturing Horizontal, in partnership with Geo

region’s conventional oil sector. “In Alberta, in 2010, the number of horizontal

Webworks Inc., which has been providing public explora-

oil-directed licences grew to 62 per cent of all oil-directed licences. This is a sig-

tion and production (E&P) data to industry since 2000,

nificant change from 2006 where the number was 24 per cent,” said the report.

appears to have a critical tool for MSHF completions and

Multistage horizontal fracturing (MSHF) has not only a critical role in

10

A chemical engineer with more than a dozen years

improving productivity in the form of a fast-growing

the productivity of a well in a tight oil formation, but, as in shale gas, it

completion, fracturing, drilling and well files database

typically accounts for a huge part of a completion budget. According to

that is tied to production figures. “It’s a database for

an analysis from Fracturing Horizontal Well Completions Inc., frac days, on

optimizing frac completions,” says Leshchyshyn.

Conventional Oil's Comeback

Technology Advances

Besides bridging a knowledge gap between key input variables of fracking

see the actual bottomhole pressure because of static

completions and production figures, the firm’s Fracknowledge database—

pressure inside the tubing, and it is being measured right

which is supported by software, maps, graphing, reports, tables and ways

where the ports are. By having an accurate pressure read-

to export to Excel from Geo Webworks—can save engineers a lot of time.

ing, it’s easier to predict screen out and avoid it,” he says.

“Reports go to provincial libraries—fine—but about 10 years ago, companies

NCS’s new Multistage Unlimited system’s frac

started scanning all documents and putting the [well] reports on a site. But an

isolation assembly, which combines the new sleeve

engineer might have to look at over a hundred reports, each 100–300 pages

technology with many elements of its existing

long. It took too much time. With Fracknowledge, all the key variables of the

Mongoose packer and frac system, includes among its

reports are captured and categorized,” says Leshchyshyn.

key components a resettable bridge plug, a mechanical

The database, supported by Geo Webworks software tools and Fracturing

sleeve locator, an abrasive jet perforating sub and an

Horizontal’s consulting, when needed, is a significant step in the develop-

equalizing valve/reverse-circulating sub. “The locator

ment of data-supported analytic tools for fracking optimization, says David

saves time by only recognizing frac sleeves, which

Burns, business development manager at Geo Webworks.

makes locating the next stage of the frac operation fast

The complexity of today’s completions sector and the lack of data tying MSHF completions variables with production history have been a challenge

and simple,” says Schmelzl.

After a frac stage is done, a pull on the coiled tubing

and source of debate within the industry. The advent of Fracknowledge looks

opens the equalizing valve and un-sets the bridge

like an important step toward reducing risk and improving the chances of

plug and the isolation assembly is moved to the next

success, putting uncertainty and debate to rest on some issues, while, as

sleeve. Once all frac stages are completed, tubing and

Burns suggests, sparking new debates on other issues as the fast-growing

isolation assembly are pulled from the hole, with no

completions sector continues to evolve.

components to remove and no plugs or ball seats to

For decades, the key determinants of productivity were porosity and permeability, says Leshchyshyn. “But in the last five years, multifrac horizontals have changed everything.”

drill out.

With only about five minutes between fracs, Schmelzl says a key benefit of Multistage Unlimited is the money

When vertical wells dominated the industry, the number of key input

saved with a speedier, more seamless fracking operation.

variables, aside from geology, when deciding on the type of frac to do, could

“With this system, we have routinely placed 10 30-tonne

be boiled down to three, he says: frac fluid type, proppant type and amount

stages in less than eight hours,” he says. The system can

of sand. “Today, the inputs are cost, frac fluid chemistry, total number of stages,

accommodate additional frac stages on the fly, even

spacing, the type of isolation or diversionary liners—for example, cemented

where there is no sliding sleeve, by using the system’s

liner versus openhole are among the variables—tonnes of proppant per stage,

integral jet-perforating sub.

production figures; all these can be cross-referenced in several ways,” he says.

Fortunately, “about 90 per cent of the time, all the key input variables are reported to the provinces—for us to find,” he adds.

Geo Webworks provides clients with training on running the software

Schmelzl estimates that between 1,200 and 1,300 Multistage Unlimited sliding sleeves are now in the ground. He expects accelerating sales in the wake of a new low-cost version of the sleeve, which targets the

analytic tools and Fracturing Horizontal provides some consulting to help

lower pressure frac requirements found in some of the

clients understand the data content and, says Leshchyshyn, “we support their

more shallow Viking, Spearfish and Bakken formations.

getting more data of a specific type that they might request.”

New product diversity

Better aim Earlier in the E&P process, during horizontal drilling, guid-

To meet the demand for fine-tuned fracking solutions, established com-

ing the drill bit along what is sometimes a relatively thin

panies and firms in the service sector have been expanding their product

formation pay zone can be tricky, especially in some of

offerings, with newer firms often filling a gap with niche solutions or, as

today’s tight oil plays. Horizontal Solutions International

in the case of Fracturing Horizontal, specialized products with potentially

(HSI) has worked on horizontals since the late 1980s

BUILT-IN FLEXIBILITY Sanjel is launching large-capacity, skid-mounted 3,500horsepower pumpers that can run on diesel, natural gas or combinations of both.

broad application.

Another case in point of the latter is NCS Energy Services Inc., relaunched in 2008 as a downhole tool company focused on MSHF. In 2010, NCS introduced a new sliding sleeve which sits as a section of the casing string and runs with the same internal diameter, burst and collapse strength of the host casing. Instead of perforating at the frac-initiation point, the sleeve’s frac ports provide access to the formation and are opened by the Mongoose packer on the tubing string. There is thus no need for pump-down plugs for stage isolation or sleeve actuating balls. The casing annulus sealing can be either cement or swellable packers.

The key benefits of the new sleeve, says Eric Schmelzl, sales manager at NCS, are cost reduction, better reliability and improved speed of execution.

“You don’t need to go in and out of the hole for each stage,” he says.

In the event of a sand-off, “Since you have the tubing in the hole, you just circulate to remove the sand. Also, while doing the frac, the operator can

Photo: Sanjel Corporation New Technology Magazine supplement | November 2011

11

Technology Advances

and provides software and consulting services to keep

the Cardium, Bakken and Viking, which are predomi-

the drill bit on track. “We’ve geosteered and geo-navigated

nantly low permeability. It’s green and low-viscosity and

about 8,000 wells. We also provide software to some

minimizes filter cake, and, more importantly, chemical

end-users that use the software on their own,” says Ken

residuals. The proof is in the numbers. We’ve seen higher

Bowdon, president and chief executive officer of HSI.

production, lower produced water, quicker cleanup and

The company uses LatNavNet software to incorporate a range of data sets from the well and the formation, including gamma ray data. “It models the data so that the distortion that results from the horizontal plane is removed. The software does require an interpreter. The

Most fracking fluid suppliers include both oil- and

times to a geologist on site. Directions typically come

Energy Services Inc., has been focused almost exclusively

back within a short time,” says Bowdon.

on a particular type of petroleum-based fracking system since it was launched in 2007. According to its latest annual report, GASFRAC is the only fracture stimulation

current growing demand, says Bowdon, who is a co-founder and managing

company using gelled liquefied petroleum gas (LPG),

partner at Gydex.

usually propane, as the frac fluid.

A technology for augmenting horizontal drilling, which has been success-

One of the main reasons for the LPG-based system is

fully used in the United States to depths of over 12,000 feet, has begun to

that fracking operations can benefit from the exception-

be used more in Canada. Departure Energy Services Inc. recently added an

ally low surface tension of liquefied propane—about

electromagnetic measurement-while-drilling tool to its suite of downhole

one-tenth the surface tension of water and about a third

equipment. The technology is much less expensive than those used offshore

that of most frac oils.

but can improve the depth capacity of horizontals. Also, “it helps operators

“When you use a liquid wedge with such a low

steer better within reservoirs,” says Dan Robson, director of strategic develop-

surface tension, the fluid cleans out the fracture almost

ment at Departure. In some of the thin formations of tight oil plays in the

completely, increasing the effective fracture length. This

Cardium, it’s likely this could be helpful.

translates into improved well productivity over the short

Quality materials and high-end metallurgy are also assuming a greater role

and medium life cycle of the well, higher recovery factors

in the composition of downhole tools for horizontal drilling. “We now build a

and improved reserves,” says Reid MacDonald, president

mud motor for the horizontal drive train to advanced metallurgy [standards]

and chief operating officer at GASFRAC. He says the

in order to support the aggressive [action] of drill bits and power sections,”

system has been successfully used in tight oil formations

says Robson. Until recently, some of Departure’s downhole tool steel compo-

in the Cardium and depleted reservoirs in the Viking.

nents had a yield strength that equalled that of landing gear for a Boeing 747 jumbo jet. But now those same parts are made to specs that compare with those on a satellite, he says.

Frac fluid customization Fracking fluids have assumed increased importance because of MSFH and their growing variety is a response to the need for precisely targeted products. Sanjel Corporation’s recently introduced Kappajel water-based surfactant is geared to clean up, so there is no chemical residue left to reduce porosity at the wellbore. “It’s becoming more widely used in light oil in the Cardium and Viking plays. Its single purpose was flowback without residue. It can be used in oil and gas,” says Ken Berg, vice-president of sales at Sanjel.

The company is also adding large-capacity, 3,500-horsepower pumpers to its fleet. Each of these almost replaces two standard units.

“Construction costs are cut and the pumps are so robust that repairs and maintenance are also cut. A frac job could go from 25 to 15 units by using them,” says Berg.

The skid-mounted units can run on diesel or natural gas or combinations of both.

The renewed interest in the Cardium and other tight oil plays requiring MSFH has also prompted others to expand their fracking fluid offer. Calfrac Well Services Ltd., for instance, has introduced several new targeted, custom solutions in the last two years. Under the company’s rating system, some are classified as green, including one called CleanTech. “CleanTech was designed specifically for

12

The water-based frac fluid can be pumped on its own or foamed with nitrogen. water-based products, but one company, GASFRAC

up infrastructure and client support services to meet the

R&D Sanjel, below, and Calfrac, right, are among those companies devising a growing variety of fracture fluid formulations in the laboratory for application in emerging tight oil fields.

Leir, sales and marketing manager at Calfrac.

data is sent off site to the geosteering team, or some-

Supported by Gydex LLC IT, HSI has recently beefed DRILLING GUIDANCE Supported by Gydex, Horizontal Solutions International, a provider of software and consulting services for geosteering and geo-navigating horizontal wells, has been able to strengthen its infrastructure and client support services in response to greater demand.

better flowback, and faster production start,” says Chad

Conventional Oil's Comeback

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technologyprofile

Ground Effects Environmental Services Inc. Thirteen years of environmental remediation in the industry Ground Effects Environmental Services Inc. (GEE) is a full-service environmental remediation company specializing in innovative, in-situ remediation solutions.

GEE has developed more than 70 technological innovations in a wide variety of areas including multi-phase extraction, electrokinetic remediation, electro-coagulation water treatment, bioremediation, electrokinetic and high pressure injection, pneumatic fracturing systems and more.

GEE provides turnkey solutions (manufacture, installation and maintenance) of environmental remediation equipment that can effectively treat impacted soil and groundwater on site, offering the lowest lifecycle costs in the industry.

Founded 13 years ago in Regina, GEE manufactures a variety of technologically advanced equipment, including mobile and fixed wastewater treatment packages, serving clients across Canada, the United States and Australia.

On the service side, GEE is predominantly active in Western Canada, providing complete turnkey options for all of its technologies.

ElectroPure Technology Water Treatment System One of GEE’s newest, most exciting technologies is its ElectroPure water treatment system, developed nearly three years ago for the oil and gas industry, utilizing electricity to destabilize and remove contaminants.

Exploration and Production (E&P) companies can reduce their operating costs while lowering greenhouse gas emissions with GEE’s ElectroPure technology, which uses a chemical-free process to treat frac flowback, produced, and other wastewater streams on site at rates of 500—3,000m3 per day. Fully automated and easy to use, GEE’s system can be efficiently set up in short order and requires minimal maintenance when in operation. It uses a proprietary two-stage electro-coagualtion process that achieves outstanding results. It’s 99 per cent effective

on a majority of contaminants (http:// groundeffects.org/index.php?option=com_ content&task=view&id=176&Itemid=119) and environmentally sustainable since the water is treated for reuse on site. GEE’s system is one of very few in North America to use electrocatalytic oxidation to purify frac flowback and produced water.

“The unique thing about the ElectroPure platform is that it can treat a very wide range of contaminants in frac flowback and produced water,” says GEE President and CEO, Sean Frisky.

For mobile treatment of frac flowback water in the oil and gas industry, ElectroPure’s capabilities are unmatched. GEE can fine tune the system to reduce radically varying levels of polymers, total suspended solids (TSS), guar gum, iron, bacteria, scaling agents, H2S and almost any other contaminant resulting from the fracking process to required levels for reuse. GEE has consistently treated gel fracs and hybrid fracs, which generate the most difficult types of wastewater to treat.

As Frisky puts it: “The system has worked for every single water source we’ve hit.”

GEE’s systems can be remotely accessed, controlled and optimized from anywhere in the world via satellite or cellular link, including real-time access to critical process information and intelligent trending.

GEE can build fixed facilities, so that E&P companies have their own treated supply for fracking. As a completely scalable and mobile service, treatment can be completed at the well head or at a location centralized to multiple drilling sites in one area.

“So far we’ve deployed the system in Western Canada, with awesome results,” Frisky says, noting that the system creates high quality brine that can be used for fracking and other oilfield uses such as water flood.

The ElectroPure mobile water treatment system consists of three trailers, which are completely plug-and-play, provide protection in the most extreme of weather conditions,

can be operated in a Class I Zone II environment, and have a typical set-up time of approximately one hour. GEE operates six mobile water treatment plants and is currently fabricating more.

GEE’s ElectroPure system can substantially reduce costs for E&P companies when compared to current methods, which require trucking, water disposal and the purchase of fresh water. In comparison, GEE estimates that producers save anywhere from 30—80% of conventional trucking and disposal costs by using GEE’s ElectroPure system.

“The economics really work when you figure out the real cost of your water, including all of those hours of trucking and waiting at the disposal site, the disposal costs themselves, and buying and trucking the equivalent volume of fresh water back to site,” says GEE Business Development Manager, Calvin Prokop.

And by eliminating the constant flow of trucks, the ElectroPure system not only reduces CO2 emissions, but also enhances safety for everyone in the area by taking trucks off the road.

GEE’s ElectroPure water treatment system has applications in many industries in addition to oil and gas, including the mining, industrial, agricultural and marine industries.

For more information, please contact:

Calvin Prokop: Business Development Manager Ground Effects Environmental Services Inc. T: (306) 352.0279 ext. 229 Toll Free: 1.866.425.1400 F: (306) 352.1412 E: cprokop@groundeffects.org www.groundeffects.org

frac flowback water treatment tHe results Contaminants

Result

Corrosion Enhancing Bacteria

>99%

Coliform Bacteria

>99%

BOD

99%

Turbidity

99%

Chlorinated hydrocarbons Hydrocarbons (F1-F4)

>98% 85-99%

Total Suspended Solids

>99%

H2S

100%

PCB

99%

Iron

>99%

Manganese

>99%

The ResulTs speak foR Themselves.

TuRNKEY. HIGH-VOLUME. MOBILE SOLUTION. The ElectroPure water treatment system by Ground Effects is a proven turnkey technology for the mobile treatment of frac flowback water in the oil and gas industry. ElectroPure can radically reduce varying levels of contaminants resulting from the fraccing process to required levels for reuse. With systems ranging in flow rates from 500 – 3000m3 per day and set-up times of approximately 60 minutes, ElectroPure is ready to play an essential role on your

Barium

87%

Strontium

91%

Calcium

89%

for more information or to book an electropure

Hardness

79%

demonstration, please call us toll-free at 1.866.425.1400.

water management team.

ILLUSTRATIOIN: Packers Plus Energy Services Inc.

QuickPORT sleeves

RockSEAL II packers

One fracture treatment four simultaneous stages

Single Treatment

Single Treatment

TRANSFORMATIVE TECHNOLOGY Horizontal multistage fracturing systems, like Packers Plus Energy Services' QuickFRAC multistage batch fracturing system, were instrumental in making shale gas and tight oil plays economic.

Single Treatment

Stars aligned Technology, timing and tenacity unlock long-slumbering Bakken shale oil play

By Jim Bentein

W

That technology was further refined so that fractures could be accurately positioned, creating multiple flow points, sending oil gushing into one long horizontal well.

Trent Yanko decided early in the decade the potential of the Bakken was too great to pass up, and he has since become a wealthy man as a result and one of the pioneers of development there.

In the early part of the decade, the start-up he led, Mission Oil and Gas Inc., began picking up land positions

e’ve always known the oil was

Dubbed Saskatchewan’s and North Dakota’s equivalent

in Saskatchewan and contracting with oilfield service

there, but it took a convergence

of the oilsands, the king of the shale oil plays is the

companies deploying the new technologies being used

of factors to make it happen.

Bakken, a pool of light oil trapped under an impermeable

to unlock the Bakken’s potential. Mission expanded its

layer of 350-million-year-old shale within the Williston

production there from just 500 barrels of oil equivalent

of new, more sophisticated horizontal drilling

Basin, a huge formation under the plains of North Dakota,

(boe) per day to 7,000 boe before being sold in 2007 to

and fracturing technologies, timing—as higher

eastern Montana, southeastern Saskatchewan and the

dominant Bakken player Crescent Point Energy Corp.

oil prices made investments in those costly

western corner of Manitoba.

for $670 million. Calgary-based Crescent now produces

Those elements included the development

technologies viable—and the tenacity of start-

Until the early part of this decade, that potential mother­

up explorers and producers, and oilfield service

lode—Saskatchewan alone has an estimated 5.5 billion

firms who made it possible.

barrels of crude trapped in its Bakken, with North Dakota

almost 50,000 boe, mostly in Saskatchewan’s Bakken and North Dakota.

But for Yanko that wasn’t the end of his tight oil adven-

Those three Ts—technology, timing and

having that and more—lay virtually dormant, since conven-

ture, as soon after he and partners formed Legacy Oil +

tenacity—have led to the development of a

tional vertical wells were only able to tap about one per cent

Gas Inc., which evolved after the takeover of the former

number of tight and shale oil plays in North

of the crude in place, rendering the Bakken uneconomic.

Glamis Resources Ltd. in 2009. A series of acquisitions

America that is unlocking billions of barrels of

Then came a series of technological advances, led by

followed, starting with buying privately owned Medora

oil and turning once-sleepy economies like

horizontal drilling, which allowed for access to more of

Resources Inc. and Renegade Oil & Gas Ltd. and then with

those of North Dakota, southern Saskatchewan

the reservoir. By drilling horizontally into the shale, then

the purchase of a land position in Saskatchewan from

and now even parts of southwestern Manitoba

fracturing the rock with high-pressure liquid and sand,

Bonavista Energy Trust for $282 million.

into booming areas where there are never

fissures were created in the source rock through which

enough skilled workers, houses or hotel rooms.

the oil could flow.

16

Conventional Oil's Comeback

Those acquisitions have continued as Legacy more recently bought Connaught Energy Ltd., CanEra Resources

EARLY ADoPTERS

Inc. and also picked up a land position from

to seven per cent, that could mean 70 [million] to 100

Athena Resources Limited.

million barrels more of potential reserves.”

All those acquisitions have been focused on shale oil plays in Saskatchewan, North Dakota and Manitoba and on an emerging

And Yanko believes that kind of potential and beyond is possible.

Even as Bakken production surpasses the 60,000barrel-per-day mark this year in Saskatchewan, up from just 750 barrels in 2004, it continues to be a developing technology story.

It starts with relatively simple approaches, such as in-

North Dakota production, almost all from the Bakken,

play in southeastern Alberta dubbed, optimisti-

fill drilling, then moves on to waterfloods, which Legacy,

has risen from 100,000 barrels per day to almost 400,000

cally, the Alberta Bakken (although it is not

Crescent Point and other large Bakken producers have

per day.

geologically connected to the Saskatchewan

deployed. Eventually, he sees CO2 injection unlocking

and North Dakota Bakken). Legacy also has

even more of the oil in place.

a substantial land position now in the Turner Valley area of Alberta.

While the Bakken is the most established of the tight oil developments, other tight oil plays, such as the Cardium, Viking and Lower

Yanko believes it’s not inconceivable that eventual re-

The technology most often credited with unlocking the Bakken’s potential was Calgary-based Packers Plus Energy Services Inc.’s StackFRAC completion method,

coveries, now at 10–15 per cent, could reach 35 per cent

which allows individual zones in the same horizontal well-

from his company’s lands and from much of the Bakken.

bore to be isolated and fracked separately. Legacy and

“We are big believers in enhanced recovery,” he says.

other producers utilize similar approaches, which dramati-

So is Mike Carlson, Calgary-based manager of reser-

cally raised Bakken production rates and profitability.

Shaunavon, are either in development or seen

voir engineering with RPS Group Canada, who points

as having great promise.

out the miscible floods with hydrocarbons (gas and

liners for its completions, based on the belief they are

Illustrating tight oil’s potential, two-year-

Crescent Point has increasingly shifted to cemented

oil) have long been used in aging oilfields in western

better suited to large-scale waterfloods, which it is turn-

old Legacy has now achieved production of

Canada, such as Swan Hills, Alta., and CO2, abundant

ing to increasingly to boost production.

about 13,000 boe, and Yanko says it should be

in parts of the United States, has been used there to

producing 15,750 boe by the end of this year.

boost recoveries.

He continues to be a strong believer in the

PetroBakken continues to utilize Packers Plus completion technology (see sidebar on the next page),

“CO2 injection probably makes more sense than

along with bilateral horizontal wells. In this approach,

potential of tight oil, likening it to the “resource

waterfloods, but government policy [which would lead

two 1,400-metre horizontal legs are drilled from one

plays” in shale gas areas such as the Horn River

to the capture of more CO2, which could be used in

vertical wellbore with 15 fracs per horizontal leg. Most of

Basin of northeastern British Columbia or the

enhanced oil recovery] would be a big part of that.”

PetroBakken’s wells are now bilaterals, says Peter Scott, its

Alberta oilsands.

A government move to force large polluters to

chief financial officer.

“You know the resource is there, and there’s

capture CO2 or some form of climate tax that compels

a big target,” he says. “It’s technologically driven.

them to do so might be the answer, he suggests. CO2

Bakken lands. “It would be a new approach there,” he says.

The frac is the secret to a lot of these plays and

is already being used successfully to coax oil out of

“Crescent Point and Legacy have done waterfloods, but

execution by management is the key. We’re

an aging conventional oilfield in the Weyburn area of

we feel natural gas might be more effective.”

spending $1.5 million to $10 million per well,

Saskatchewan.

so you need to have a technical focus and you need to execute.”

Calgary-based engineering consultant Granger Low,

Scott says it is doing pilot tests of gas floods on its

He says the company tested CO2 injection but has decided gas floods may have more potential, especially

of Proven Reserves Exploitation Ltd., argues that miscible

since it co-produces gas. It has been testing gas since

floods using natural gas would unlock hundreds of bil-

late March in one well and plans to test it in two or

and the payout is in 12–18 months, he says,

lions of barrels of oil in reservoirs like the Bakken and in

three more.

contrasted with years for oilsands invest-

conventional oil pools.

Most wells cost $1.6 million to $1.7 million

ments. But the plays have characteristics

“Injecting low-priced gas to produce high-cost oil

similar to oilsands investments, since they are

just makes sense,” he says, commenting on a paper he

long-lived, says Yanko. “Once you’re there, and

recently produced on the subject.

you have the land position, you can produce

He calculated that doing so would lead to the production of 30 billion barrels of oil in Alberta’s conventional

years of inventory.”

pools alone, almost double the 16 billion barrels that has

As with the oilsands, it also helps that oil

culated that at today’s prices, that would cost $1 billion

be doing these tight oil plays if oil prices were

and would unlock $1 trillion in oil production.

It is also an economy-of-scale process, much like other resource plays, says Yanko. “It’s tough to be a 10-person, 1,000-barrel-a-day operator,”

Injecting gas into tight and other unconventional oil plays would multiply those production levels many times more, he argues.

However, Carlson is a skeptic, arguing that gas prices

he says. “If you’re producing 10 barrels a day

won’t always stay low and it would be better to shift to

from 500 drilling locations, the economics are

CO2 floods.

more challenging than if you’re producing 10 boe per day from 1,500 locations.”

The good news is secondary recovery methods will only lead to increased production.

“We have 120 sections overall and we could

Robin Bertram of AJM Petroleum Consultants says production from Bakken and other tight oil plays will

already been produced from those reservoirs. He also cal-

prices have remained elevated. “We wouldn’t at $15 a barrel,” he says.

from about 17,400 barrels per day to 23,000 barrels per day.

PetroBakken Energy Ltd., with over 1.8 billion barrels of light oil in place in its southeastern Saskatchewan Bakken lands, is also a big believer in enhanced recovery. The company has only booked five per cent of its reserves there as proven and probable, but company executives

have 1.2 billion barrels under management,”

have said they think that could rise to 25 per cent once

he says. “If we can increase recoveries by five

secondary recovery technologies are applied.

UNLOCKING TIGHT OIL High-end horizontal multistage fracking like that provided on an industrial scale by Packers Plus Energy Services vastly outperforms vertical well completions while limiting the surface footprint.

New Technology Magazine supplement | November 2011

IMAGE: Packers Plus Energy Services Inc.

for years,” he says. “You could have 10 or 15

The company has stakes in 430 net sections of land in the Bakken, all in Saskatchewan, with production ranging

17

EARLY ADoPTERS

only grow over time. “I attribute it to cracking the code,” he says. “Companies are continuing to push the envelope with technology.”

Horizontal drilling technologies have improved,

Themig and partners Ken Paltzat and Peter Krabben, who had all worked together at the former Dresser Industries and then for Halliburton Energy

the number of stages per lateral when they utilize existing Packers Plus systems.

“When we started the company we saw the

better fracking fluids and muds have been developed,

Services Inc., which bought out that company,

need for high-end fracturing completions technol-

computerized approaches have allowed for better place-

knew exactly what they wanted to do with the

ogy,” says Themig. “There was horizontal drilling

ment of stages and the industry is increasingly shifting

fledgling company when they left secure jobs and

going on, but nobody was fracking.”

to enhanced production methods like waterfloods,

formed it.

gas floods and CO2 injection that sweep the remaining hydrocarbons to where they can be produced.

“There are some technologies we haven’t developed yet, and they and existing technologies will ultimately

“We were committed from day one to bringing

The idea of starting a service firm that concentrated on a value-added niche came partially as a

technology to the land-based drilling industry, with

result of a class Themig took while he was studying

a focus on horizontal completions,” says Themig.

towards a master’s degree in business administra-

That focus led to the development of a number

tion. “The professor says a business can either be a

lead to more production from tight reservoirs,” Bertram

of completion technologies, starting with the

Saks Fifth Avenue or be a low-end alternative,” he

says. “I don’t know what that production will be, but it will

StackFRAC system, which revolutionized the

says. “We picked the Saks model.”

be a big number.”

completions sector by introducing multistage

Packers Plus first introduced its completions

fracturing systems in horizontal wells, credited

technology in the Barnett shale in 2003 and it now

with unlocking the potential of tight and shale oil

dominates the completions segment in most land-

and gas.

based tight and shale oil plays.

Leading the way Multistage fracking pioneer Packers Plus plays major role in cracking the tight oil code

W

The firm has since introduced dozens of prod-

“When we started, you could do five fracs,” he

ucts, including the new QuickFRAC system this past

says. “Our StackFRAC brought that up to 20, and

spring, which allows for up to 60 stages downhole

now we have technology that can do 60.”

while pumping 15 treatments at surface.

“QuickFRAC is a great technology that can

More recently it has moved into the offshore market. “Offshore reservoirs might have an

meet the need for increased stage numbers

extended production life of 20 years or so because

in formations such as the Bakken, Horn River

of our technology,” says Themig. “We don’t think the

and the Montney, as well as many others,” says

market understands that potential yet.”

Themig. “QuickFRAC allows the operator to do

It continues to be an engineering-focused

the job of pumping 15 stages on surface while

company, with about 10 per cent of its employees

Packers Plus does the job downhole, providing

having engineering or technology degrees.

as many as 60 individual stages. This is done by

He says the company will introduce up to three

taking a single pumping treatment on surface

new technologies in the next few months. “We

hen the history of all of the business success

and precisely directing it into two to five stages

have 84 engineering projects underway now and a

stories emerging from the development of the

downhole. For the operator, pumping time and

number of projects in the developing stages.”

tight oil and gas reservoirs in western Canada

costs are reduced significantly and production

and the western United States is chronicled, the story of an 11-year-old Calgary-based company that specializes in an

results are greatly increased.”

This past summer it introduced its new

area of oilfield technology unheard of until the last few years

RepeaterPORT sleeve technology, which allows op-

might be the most remarkable.

erators to increase

Themig says the firm will be introducing a range of new products over the next six to seven years.

And it’s expanding its manufacturing capacity for a good reason.

“We can’t keep up with demand,” he says.

“We started small,” says Dan Themig, president of Packers Plus Energy Services Inc. “When we were starting to set up our offices, I brought a computer from my house and we bought office furniture at the Salvation Army.”

A decade later, the privately owned company employs 500 and has annual sales likely in the hundreds of millions of dollars—although Themig refuses to divulge revenue figures. He says dollar figures aren’t important and serving customers is. foot office in Edmonton and has a slightly smaller office in Houston. It has eight offices and/or facilities overall in Canada, 10 in the United States and has offices worldwide, including in the Middle East, the North Sea and Brazil, with 28 offices overall.

And Themig says it’s inevitable it will double its workforce in the next few years.

18

Conventional Oil's Comeback

FASTER, GREENER Capable of fracturing 60 stages downhole while only pumping 15 treatments at surface, Packers Plus Energy Services’ QuickFRAC technology, by using consistent pumping rates, also greatly reduces water usage.

Photo: Packers Plus Energy Services Inc.

Packers Plus is building a new 42,000-square-

New Multistage Unlimited frac-isolation system TM

All the fracs you need, exactly where you want them, in a fast, nonstop completion sequence No actuating balls, no pumpdown plugs, no perforating Frac ports

Coiled tubing

Sliding sleeve

Standby jet perforating sub

Resettable bridge plug

Equalizing valve

THE MULTISTAGE UNLIMITED SYSTEM delivers all the pinpoint fracs you need to optimize well production, yet the system is so simple and the operation is so fast that it costs less than methods that limit your completion options.

Full-open, production-ready wellbore

Only 5 minutes between fracs

Uses 10% to 20% less water

The system requires no pump-down plugs, actuating balls, or perforating tools. Here’s how simple it is: • Run the casing with a Multistage Unlimited sliding sleeve in the string wherever you plan to frac. You can either cement or run swellable packers to seal the annulus.

• Run the Multistage Unlimited frac-isolation assembly on coiled tubing to the lowest sliding sleeve.

• Set the resettable bridge plug inside the sliding sleeve and shift the sleeve with string weight and annular pressure.

• With the bridge plug sealing below the open frac ports, pump the frac down the casing/coiled tubing annulus.

Monitor frac pressure at the surface via the coiled tubing.

• When the frac is away, pull up to open the equalizing valve and unset the bridge plug. Move to the next sleeve and repeat. In about 5 minutes, you’re ready to frac again.

Add stages on the fly You can add a stage where there is no sliding sleeve by using the integral jet-perforating sub. The added stage is frac-ready in less than 40 minutes.

When the frac-isolation assembly is pulled from the well after the last frac, you have an unrestricted wellbore all the way to the toe, with nothing to retrieve or drill out.

The Multistage Unlimited system cuts water requirements by eliminating pump-down components, by circulating leading-edge fluids down instead of bullheading them, and by reducing casing volume by the volume of the coiled tubing.

Ultra-reliable operation The Multistage Unlimited system is easier to operate and more reliable than any other multistage equipment: • All-mechanical operation. An automatic j-slot sets and unsets the bridge plug with up-and-down string motion.

• The resettable bridge plug has been used for more than 10,000 stages and has been cycled more than 40 times during a single completion operation.

• With its sand-friendly design, the system is impervious to malfunctions caused by contamination.

• Sand-outs can be quickly reversed out.

The Multistage Unlimited system is currently available for 41⁄2in (114 mm) and 51⁄2-in (140 mm) casing. Call us or visit our website for more information.

Leave nothing behind.TM www.ncsfrac.com

409.925.7160 (U.S. Sales)

403.816.1011 (Canada Sales)

403.720.3236 (Central Dispatch)

info@ncsfrac.com

©2011, NCS Energy Services, Inc. All rights reserved. Multistage Unlimited and “Leave nothing behind.” are trademarks of NCS Energy Services, Inc. Patents pending.

Crude’s comeback Technologies developed for natural gas set to transform tight oil production

By Maurice Smith

Assisted by buoyant oil prices while natural gas prices remain weak, drilling has shifted from gas to oil as the technologies are increasingly adapted to oil plays—as well as liquids rich gas plays—in Canada and the United States.

In addition to an “enormous” natural gas resource base that’s “potentially transformative for the American economy, energy security and the environment,” the National Petroleum Council (NPC) stated it is “perhaps surprising to

T

many [that] America’s oil resources are also proving to be much larger than

and multistage fracturing technologies, appears set

Chu in September entitled Prudent Development: Realizing the Potential of

to repeat itself in oil, as the technologies are applied

North America’s Abundant Natural Gas and Oil Resources, the NPC stated these

to previously marginal tight and shale oilfields.

oil resources “offer substantial supply for decades.”

he resurgence in North American natural

previously thought…. The United States and Canada together produce four

gas production, precipitated by the deploy-

per cent more oil than Russia, the world’s largest producer.”

ment of game-changing horizontal drilling

In a comprehensive draft report delivered to U.S. Energy Secretary Steven

Technology leadership and sustained investment led the way, according

While it’s still early on the crude oil side, as companies experiment with the best production

to the study, which involved about 400 people, half outside the oil and gas

parameters to solve individual plays, an increasing

industry, and took two years to complete. After years of decline, North

number of studies are suggesting the prize—in not

American oil production rose in 2009 and 2010 “due to advances in

just increased production, but in new jobs and grow-

technology and significant investment in exploration and development by

ing royalties—could be huge as more and more

companies over a number of years.”

While the oilsands and offshore fields are contributing to the resur-

plays are solved.

gence, tight oil, found in geological formations where the oil does not

As with natural gas before it, North American crude shows signs of halting its decades-long

easily flow through the rock, such as the Bakken formation of

production declines to—at least in the short to

Saskatchewan and North Dakota, could play a major role as it benefits

medium term—resurrect an industry thought to be

from “technologies similar to those used for shale gas, including hydraulic

in terminal decline.

fracturing. Over the next 20 years, tight oil production could continue to grow,” the report states.

CHICKEH

The rapid learning and deployment of new production techniques in recent years to unlock the natural gas supply are still being adapted to oil, it states, pointing to future potential as techniques mature. “Such learnings have not yet been fully applied to new and emerging oil opportunities. As

H COL UM

BIA

the emerging oil opportunities develop both onshore and offshore and conventional natural gas, similar upward re-appraisal of potential oil supply will likely follow.”

Decline reversal

BRITIS

with application of some of the technologies now enabling access to unDOE CREEK DUNVEGAN U.TRIASSIC

Conventional oil production in the Western Canadian Sedimentary Basin has been on the decline since it peaked at about two million barrels per day in the early 1970s. Production had fallen more than 50 per cent by

L. TRIASSIC JURASSIC SWAN HILLS

2010 to about 900,000 barrels per day, even with significantly increased BELLY RIVER CARDIUM SECOND WHITE SPECKS JURASSIC

wells on production—38,886 in 2010 compared to about 9,100 wells in 1970.

The migration of drilling and completions technologies that had

VIKING

been so successful for tight and shale gas to the oilfield is only now changing that picture. Prior to the worldwide recession of 2008, the move towards horizontal drilling targeting tight oil was

VIKING GLAUCONITIC

TIGHT OIL REVISITED New production technologies have put once ignored tight and shale oil plays back on the map.

MISSISSIPPIAN FISH SCALES

BAKKEN THREE FORKS SHAUNAVON

A L B E R TA

S A S K AT C H E W A N

U N I T E D S TAT E S O F A M E R I C A 20

Conventional Oil's Comeback

MANITO

BA

AMARANTH

TIGHT OIL POTENTIAL

already underway in Canada, being first noticed in

Technology-driveN growth

Saskatchewan, according to the Canadian Energy

According to the Alberta Energy Resources Conservation Board’s (ERCB's)

Research Institute (CERI). Emerging horizontal well

supply/demand outlook 2011-20, crude oil production will increase by 6.8

technology was directed particularly to the Bakken play

per cent in 2011, in contrast to the slight decline of 0.4 per cent in 2010

of southeastern Saskatchewan, where the number of

and the five-year average decline rate of 4.2 per cent, “primarily due to

horizontal wells climbed from 384 to 1,233 between

the expected increase in drilling activity and use of multistage fracturing

2003 and 2008, acting to stabilize production declines

technology on horizontal wells. Crude oil production is expected to peak in

in that province.

2013 and begin declining at an average decline rate of four per cent over the

With economic recovery, the pace has quickened, in

remainder of the forecast period as production from increased wells drilled

some regions very rapidly. “In Saskatchewan, the per-

and wells drilled with new technology somewhat offset declining produc-

centage of horizontal wells grew from 24 to 49 per cent

tion from existing wells.”

between 2004 and 2009 and the assumption is that this percentage will continue to grow,” states the June report, Economic Impacts of Drilling, Completing and Operating Conventional Oil Wells in Western Canada (2010-2035).

Similarly, in Alberta—where plays such as the Cardium and Viking are leading the way—the number of horizontal oil-directed licences swelled from 24 per cent of all oil wells in 2006 to 62 per cent in 2010, when a total of 3,095 oil-directed wells were drilled.

Driving the growth in more costly horizontal wells, of

" The United States and Canada together produce four per cent more oil than Russia, the world’s largest producer.” ­— National Petroleum Council

course, is improved production. Fewer but more productive horizontal wells will stabilize and grow production in

The ERCB cautions, however, that “if the use of multistage completion

Alberta and Saskatchewan, CERI predicts. With increased

technology in horizontal wells becomes more widespread in Alberta, the

horizontal well drilling comes “the potential for increasing

forecast may prove to be conservative.”

initial production rates in the future based on longer horizontal legs.”

In some cases, the increases have been striking. CERI

Horizontal multistage fracked wells drilled in 2010 were credited with halting the decline in average annual production of oil wells that dated back to 1973. In 2010, 2,308 successful oil wells were drilled, a surge of 143 per cent

points to average initial production rates increasing, for

from 2009. The last time Alberta experienced a drilling level this high was in

example, from 50 to 170 barrels per day over three years

2005, says the ERCB in its annual review.

in the Edmonton area. While not quite as dramatic an in-

In 2010, 1,023 new horizontal oil wells (including those using multistage

crease was reported in the Bakken, the average horizontal

fracturing technology) were brought on production, a 276 per cent increase

well there still consistently accomplishes initial production

from 2009, raising the total number of horizontal wells to 4,850.

rates three times greater than a vertical well does.

The largest reserves change in 2010 was recorded in the Pembina Cardium

CERI forecasts conventional oil drilling will plateau

Pool, where initial established reserves rose almost seven per cent as a result

by 2016 and thereafter decline two per cent per year as

of extensive horizontal drilling over the last several years, mostly to the south

oilsands and natural gas activity pick up toward the end

of the main pool. “Horizontal multistage fractured wells have expanded the

of the decade.

limits of the pool by allowing economic production from lower permeability

The impact on the economy of oil will continue to be substantial. Examining the impact of conventional crude

sands and silts,” the ERCB notes.

Reserves were also increased in several Suffield Upper Mannville pools

developments anticipated in Alberta, which will create

in part due to infill horizontal drilling, and there is “potential for significant

the largest impact of all the provinces, CERI predicts a

reserves growth from new horizontal wells in the Cardium Formation at

cumulative sum of additional Canadian gross domestic

Pembina, Willesden Green and other fields. Horizontal multistage fractured

product from 2010 to 2035 (as a result of continued

wells are being drilled on the periphery of the main pools where permeability

operation of existing wells and the addition of new wells)

declines to less than one milliDarcies (mD) as a result of a change to a shalier

of $572 billion.

facies. These techniques are also being used in many other formations, includ-

Employment in Canada (direct, indirect and induced) is anticipated to grow from 87,000 jobs to a peak of

ing Montney, Glauconitic, Pekisko, Duvernay and Viking.”

The ERCB’s forecast, which included the category of multistage fractured

130,000 jobs in 2018, while direct employment in

horizontal wells for the first time despite limited information available on their

Alberta is estimated at 29,000 jobs at the beginning of

production, projected the number of new multistage fractured horizontal oil

the study period, reaching a peak of 42,000 jobs in 2018.

wells placed on production to increase from 745 in 2010 to 1,200 from 2011

Compensation of Canadian employees is expected to

to 2013. This number is expected to decline to 1,000 in 2014 and remain at

reach a cumulative total of $155 billion by 2035. Alberta

this level for the remainder of the forecast period.

royalty payments are projected to grow from $1.98 billion

“This projection considers the option that companies have in diversify-

in 2009 and just $700 million in 2010 to a peak of

ing their drilling activity with natural gas, given the expected increase in gas

$4.7 billion in 2027, and fall off slightly year-to-year after

demand and price over this same period, but may prove to be conservative

that to $4.57 billion by 2035.

based on the crude oil opportunities present in the basin,” it concludes.

New Technology Magazine supplement | November 2011

21

MAP: Legacy Oil + Gas Inc.

SOLVING THE PUZZLE

E D M O N TO N

A L B E R TA BRITISH COLUMBIA

C A LG A R Y

S A S K AT C H E WA N MANITOBA REGINA WINNIPEG

Conventional crude’s second chance Evolving technology opening doors for new oil resource plays

By Elsie Ross

W

methods, including waterflooding and CO2 flooding, but has opted for natural gas flooding in the Bakken.

Solution gas is readily available in the area and is less expensive and corrosive than CO2.

“What we are trying to do is attenuate the decline and extend the economic life of the field by significantly increasing the ultimate recovery of each one of these wells,” he said. PetroBakken has its first gas injection well on injection now with a total of five

hile there’s a finite amount of oil to be extracted from the

planned for this year with $20 million allocated for

Western Canadian Sedimentary Basin, with new technologies,

EOR pilots.

new ideas and innovative people there will still be great long-

If gas-flooding works, PetroBakken has identified

term opportunities with the right assets, an investment conference heard

about 100 locations, probably about 20 a year over the

in September.

next five years, which will result in about half of its

“Quite frankly, all the easy stuff has been found, all the easy stuff has been produced and it’s going to take newer and better technologies to

Bakken production on EOR in that period.

“The beauty of this is that we are actually going to

unlock whatever is left,” John Wright, president and chief executive officer

start injecting our own solution gas,” said Wright. At

of PetroBakken Energy Ltd., said during a panel session at the Peters & Co.

today’s low prices, natural gas is almost a waste product,

Limited conference.

so in putting it “in the ground, it becomes a storage

PetroBakken, whose Bakken assets were spun off from Petrobank Energy and Resources Ltd., was set up less than two years ago. The idea was that if leading-edge technologies were applied to some of the evolving resource

TIGHT FOCUS Legacy’s core operations are concentrated in southwestern Alberta and the Williston Basin in Saskatchewan, Manitoba and North Dakota, including the prolific and fastgrowing Bakken light oil resource play.

project,” he said.

“Displacing oil out of the ground and ultimately producing that natural gas back on final depletion

PRAIRIE PROSPERITY Drilling activity has been brisk across southeastern Saskatchewan and is gaining steam in Alberta as producers shift from natural gas to tight oil fairways.

plays in the Western Canadian Sedimentary Basin, the company could generate significant long-term sustainable growth and that dividend yield could also grow over time in a strong price environment, said Wright. With its Bakken assets now a “cash cow,” PetroBakken is pursing similar objectives in the Pembina Cardium.

Legacy Oil + Gas Inc., whose main focus is the Williston Basin, was created in 2009 specifically to take advantage of advances in light oil development such as horizontal wells and multistage fracturing, said Trent Yanko, president and chief executive officer. His previous company, Mission Oil & Gas Inc., was at the forefront of light oil resource development, mainly in the Bakken. “We have a lot of plays that are technology-driven, that are using multistaged fracking, enhanced recovery techniques, in this case waterfloods, to get more oil out of the ground,” he said.

The next stage in the Bakken is going to be enhanced oil recovery (EOR), Wright said. PetroBakken has looked at a number of different

Photo: Legacy Oil + Gas Inc.

New Technology Magazine supplement | November 2011

23

SOLVING THE PUZZLE

could be an optimal way to get the most value out of the Bakken and we are

companies on a production treadmill, Wright said that

pretty excited about the potential that this offers for us.”

over time the average corporate decline rate actually

Over the next six to 12 months, PetroBakken expects to have some initial indication whether the gas flooding is working.

Evolving techniques Completion technologies have continued to evolve since the company

declines into the teens as the plays mature. “The biggest cure for us for declines is execution of multiple years of programs and our base decline just goes down and down and down as production goes up.”

Legacy is interested in large oil-in-place accumulations

started out drilling 1,400–1,600 metre horizontal wells in the Bakken.

with low recovery factors where every small increase in

PetroBakken began looking at ways to increase the frac intensity (which will

the recovery factor leads to a big change in reserves. At

result in higher oil recoveries) and to become more efficient.

Turner Valley, Alta., “the application of an unconventional

The next evolution was drilling the field using bilateral completions, in which the field was effectively downspaced to eight wells per section using only four wellheads. Two parallel wells are drilled and then they are individu-

technology in a conventional field is leading to a lot of value creation,” said Yanko.

While some horizontal wells were drilled more

ally and separately completed using between 15 and 20 stages of fracs down

than a decade ago, Legacy thought that changing the

each of the laterals.

completion techniques from standard open-hole to

The company had “some significant results comparing 140 bilateral wells and 140 offsetting single wells,” said Wright. Each bilateral well cost

multistage acid fracking would greatly improve the economics of horizontal drilling. It drilled some vertical

$2.6 million compared to $4 million for two single lateral wells to access the same resources.

“They make more oil, they pay for themselves faster and on a capital intensity basis it’s a better way to put money into the ground and get the oil out,” he said.

Another PetroBakken technological innovation was prompted by necessity. In late 2010, in the northern Bakken, the company started encountering instances in which production would drop and the water cut would increase.

That was a clear indication it had fracked out of the zone and that it had problems with the Bakken caprock.

The problems occurred after wells were brought on stream at high production rates (200–250 barrels a day) and as PetroBakken dropped the pressure in the reservoir, Photo: Legacy Oil + Gas Inc.

ENERGIZED ACTIVITY After years of steady declines, conventional oil production in Canada and the U.S. has been on the upswing due to the success of tight oil plays.

starting to deplete the fracture system.

for declines is execution of multiple years of programs and our base decline just goes down and down and down as production goes up.”

— John Wright, president and chief executive officer, PetroBakken Energy Ltd.

In response the company came up with a new solu-

tion, using a new frac completion protocol called CleanTech, which allows it to

wells, and then did some fracking to understand

frac the wells with a very low-viscosity, great-carrying-capacity frac fluid. The

the reservoir parameters before applying that to an

fluid can deliver high concentrations of sands with about the same volume of

understanding of the unconventional component

fluid but at much lower pressures and with no fears of sanding off. “These wells

of the completion. In February, Legacy recompleted

are actually outperforming our bilateral wells,” said Wright.

an existing horizontal well that had been producing

The results have been so successful that PetroBakken is looking at using

25 barrels of oil equivalent per day. Initial production

the technology in all of its Bakken wells. “This obviously pushes out the eco-

from the well was 110 barrels of oil equivalent per day

nomic limit of where the field can be exploited.”

and it is still producing 80–85 barrels of oil equivalent

On to the Cardium

per day.

The field recovery factor at Turner Valley is only 12 per

In 2010, PetroBakken acquired three companies and has now accumulated

cent of the 1.3 billion barrels of 48-degree API crude in

about 260 net sections in the Cardium where it is continuing to look at new

place. Legacy estimates that every 15 barrels per day of

technologies to exploit the field. The company sees the West Pembina area

incremental initial production adds about $1 million to

of central Alberta as the most prospective area in which to employ new tech-

the company’s present net value.

nologies. It has focused on the halo area because it has the original reservoir pressure and has not yet been depleted.

PetroBakken believes its latest innovations will, over time, increase produc-

Another play that is going to be reliant on technology is the newly emerging Alberta Bakken play in southern Alberta, Yanko said. A large play, it has a lot of

tion to about 250,000 barrels of oil per well. It currently uses slickwater fracs

different oil shows from a lot of different zones. The size

for completions. “We think it is a great answer today but it may not be a great

of the play means it is going to take some time to figure

answer tomorrow so we are trying a bunch of new things,” said Wright. Other

it out, he said.

completion methods it is looking at to try to squeeze more oil out of the rocks

However, “these types of plays would not exist without

involve different frac densities, injection pressures and sand concentrations.

this technology and without high oil prices,” he said. “We

Responding to a question from an analyst who suggested that one of

would not be doing a lot of the stuff we are doing today

the side effects of new technologies is high initial decline rates, which put 24

“ The biggest cure for us

Conventional Oil's Comeback

at $15 oil and we all fully understand that.”

we are the people of Baker Hughes. and we installed the first one-trip, 40-stage completion.

Working with our customer, we engineered, installed, and fractured a 40-stage openhole completion system—the most stages ever performed in a single trip.

Using a FracPoint™ EX-C multistage fracturing system, our team delivered precise zonal isolation and fracture placement without cementing. And because the system is modular, we can optimize it according to your specifications to help push your production envelope in unconventional reservoirs.

To find out how Baker Hughes and our industry-leading multistage fracturing systems can lower your costs and boost productivity, contact your Baker Hughes representative or, visit us

Our one-trip fracture completion system helps you reduce your completion costs by eliminating wireline and liner cementing operations and reducing pumping times, while accelerating reservoir drainage and boosting your overall productivity.

www.bakerhughes.com Š 2011 Baker Hughes Incorporated. All Rights Reserved. 32103

at www.bakerhughes.com/fracpoint