Thank you, Kahuna. It is so nice visiting this ven

Thank you, Kahuna. It is so nice visiting this venue, observing the exchange of information versus that found elsewhere; despite the odd venting that is found here, this place really is the antithesis to all things "elsewhere".

Xun's, Mr. Matousek is a wiz at providing very interesting articles and information on the Xun forum. I find this one posted this morning particularly interesting.

http://www.bloomberg.com/news/articles/2015-0...ost-energy

Quote:

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(Bloomberg) -- Beset by falling prices, the oil industry is looking at about 50,000 existing wells in the U.S. that may be candidates for a second wave of fracking, using techniques that didn’t exist when they were first drilled.

New wells can cost as much as $8 million, while re-fracking costs about $2 million, significant savings when the price of crude is hovering close to $50 a barrel, according to Halliburton Co., the world’s biggest provider of hydraulic fracturing services.

While re-fracking offered mixed results in the past, earning it the nickname “pump and pray,” the oil crash is forcing companies to pursue new technologies to produce oil more cheaply. Analyzing reams of data from older wells has become a key piece of the puzzle, identifying the best candidates for re-fracking instead of picking them simply at random, said Hans-Christian Freitag, vice president of integrated technology at Baker Hughes Inc.




“You want to talk about the next step to increasing production without increasing costs?” said Carl Larry, Houston-based director of oil and natural gas at Frost & Sullivan, a consulting firm. “Re-fracking looks great.”

Fracking involves blasting water, sand and chemicals down wells to crack rock, letting oil and gas flow to the surface. This second wave of fracking is disappointing environmentalists who expected a slowdown in new drilling tied to the price slump. Critics say fracking leads to contamination, uses too much water and creates air pollution from the sand mining.

Environmental Issues

While fewer new wells would seem to mean less total fracking, the re-fracking phenomenon means there won’t be as big a reduction as some had expected.

Communities will continue to feel the impact from more natural resources being used, said Sharon Wilson, the Texas organizer for Earthworks, an environmental watchdog group. “It’s horribly disappointing,” she said by telephone.

Fracking techniques have come a long way since the North American shale revolution began more than a decade ago. Since those early, primitive wells were drilled, fracking specialists like Halliburton have gotten far better at figuring out where to put the cracks, and how wide and deep they need to be to get the most production.

Fracking projects have also become more complex and expensive as wells reached further underground and engineers figured out that the more cracks blasted into the reservoir, the more oil comes out.

64% Rise

While the number of wells fracked in the U.S. last year climbed 64 percent to 18,200 compared to 2011, the total number of fracking stages -- the holes punched in the rock -- more than doubled, according to Houston-based industry adviser PacWest Consulting Partners, a unit of IHS Inc.

That means there are a lot of older wells with primitive frack work that are prime candidates for a fresh workover.

“The timing is absolutely perfect for this opportunity,” Freitag said. “Right now, the North American unconventional oil and gas industry is in a bit of a crisis.”

Before the crash, Halliburton had a harder time convincing customers that re-fracking horizontal wells was worthwhile, largely because of inconsistent results.

“Customers look at it almost like going to a casino,” said David Adams, vice president of operations technology in North America for Halliburton.

The hardest part about re-fracking is pumping new fracturing fluid down the length of a well running horizontally for 5,000 feet (1,500 meters), and isolating the spots that need to be blasted, said Rod Skaufel, president of BHP Billiton Ltd.’s shale business.

Perfecting Technique

That’s more difficult than fracking a new well, and that’s why operators in the past have dubbed the technique “pump and pray,” he said. Now, though, oilfield service companies are working to perfect the technique.

BHP Billiton, one of the biggest producers in Texas’s Eagle Ford shale, is among the companies considering re-fracking more of its old wells, though it isn’t yet completely sold on the new technology, Skaufel said. The Australian oil and mining company is working with Schlumberger Ltd. to test the technology in the gas fields of Louisiana’s Haynesville Shale.

“Clearly if you could make this work, it allows you to have a more cost-effective program under these prices,” Skaufel said. “That’s why we’re excited about the concept.”

Best Targets

Halliburton has developed techniques to send fracking fluid into old wells and direct it to the best targets, according to Adams.

“If you look at the top operators across North America that we work with, there’s not a single one of them that’s not talking about re-fracks today,” he said.

The drilling slowdown is giving oil companies more time to tinker with the new technology, said Dan Themig, chief executive officer at Packers Plus Energy Services Inc.

“When oil prices and activity are high, there’s no one available to look after experimentation,” said Themig, whose closely held Calgary company is working on its own re-fracking technique. “You will see experimentation take place in the next couple of years. There is still money in our industry to do that.”

To contact the reporter on this story: David Wethe in Houston at dwethe@bloomberg.net

To contact the editors responsible for this story: Susan Warren at susanwarren@bloomberg.net Will Wade

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