E&P Notes (January 2017)
Authors: Parshall Joel , Jacobs Trent , Rassenfoss Stephen , Carpenter Chris , Donnelly John 
Published: February 2017

E&P Notes
Hot Permian Play Gets Panel Focus
Oil prices, fracturing fleet, staffing, and technology among topics aired.
Joel Parshall, JPT Features Editor
The successes and challenges of producers in the United States’ most active oil play received a wide-ranging discussion by three panelists recently at an SPE Gulf Coast Section meeting in Houston on the state of the Permian Basin.
Exclusively following a question-and-answer format, the nearly hour-long program last month covered oil prices, the fracturing fleet, staffing, technology, reservoir issues, and other topics related to the basin that covers west Texas and southeastern New Mexico.
“It’s exciting to see the Permian come around and actually be the hottest play and the hottest area probably in the world,” said Billy Smith, technology director for North America at Halliburton. “The encouraging thing about the Permian, at least with the operators I’ve spoken with, is that at USD 50[/bbl] oil, a lot of the play is very valid and very economic.” Some Permian plays are economic for their operators at USD 40/bbl oil, he said.

Oklahoma Official: Progress Being Made, but Induced Seismicity Will Not Stop Anytime Soon
Trent Jacobs, JPT Senior Technology Writer
One of Oklahoma’s top government officials announced recently that it could be many more months before the full scope of the state’s regulatory response plan for induced seismicity is proven effective.
Oklahoma is a top-five oil and gas producing state in the US that has also seen a nearly 4,000% spike in earthquakes since 2009, making it among the most seismically active regions in the country. Scientists and industry experts have concluded that the earthquakes are instances of induced seismicity brought about by the injection of produced wastewater into a fault-connected layer of rock called the Arbuckle formation.
Michael Teague, secretary of energy and environment for Oklahoma, explained that even though the state has ordered hundreds of disposal wells to cease operations or cut back their injection volumes, the earthquakes are slowing down but growing in strength. He suggested that it will take quite a bit of time for the built-up pressures inside the Arbuckle thought to be triggering the quakes to dissipate.

Beware of Bottlenecks
Stephen Rassenfoss, JPT Emerging Technology Senior Editor
Oil companies that have slashed the break-even cost of producing oil from shale plays now must figure out how to hold on to those hard-won gains.
US producers can profitably produce oil from these difficult formations at prices that are 50% lower than they were during the boom, according to Rystad Energy. But roughly half of those gains are at risk as drilling activity rises.
“Lower unit prices of service companies are a major reason for the drop,” said Jon Duesund, senior project manager for Rystad, during a recent briefing in Houston.
Discounts squeezed out of suppliers are considered “nonsustainable” because prices will rise as demand rises, allowing service companies to raise prices.

UK Geomechanical Firm Targeting US Shale; Addressing Frac Hits
Trent Jacobs, JPT Senior Technology Writer
One of the oldest names in geomechanical modeling has learned some new tricks, and like so many recent advances in the oil and gas industry, it has everything to do with the North American shale revolution.
Founded nearly 30 years ago, UK-based Rockfield was among the first to develop a hydraulic fracture model for conventional reservoirs, and remained one of the few names in specializing in this field for much of that time.
But the market opportunity presented by the complex geomechanics involved with fracturing tight rock and shale reservoirs has spurred more competition and forced legacy modeling companies such as Rockfield to revamp their existing codes and develop new software products.

Prescriptive-Analytics Modeling Technology Captures Reservoir Physics
Chris Carpenter, JPT Technology Editor
Producers face a number of decision-making challenges. Specifically, they must optimize field development and operational decisions in light of the complex interplay of fiscal, market, and reservoir variables.
Data analytics is enabling new and better solutions for handling these problems. Tachyus’ Data Physics technology combines machine learning and reservoir physics to rapidly integrate relevant data sources in real time. The prescriptive analytics of the new technology enables operators to efficiently compare possible decision scenarios to balance short- and long-term tradeoffs, such as ultimate oil recovery vs. production targets. This methodology, combined with a scalable cloud-based computational platform, enables closed-loop reservoir optimization, in which reservoir and surface models are frequently updated and continuously identify new optimal operational decisions.

Total Wins Award for Project Integration
John Donnelly, JPT Editor
Total’s Laggan Tormore project claimed the International Petroleum Technology Conference (IPTC) Excellence in Project Integration Award at the 10th IPTC in Bangkok, Thailand.
The IPTC Excellence in Project Integration Award highlights projects that have demonstrated distinction through-out the entire value chain, and are equivalent in value to at least USD 500 million. Past winners have included both international and national oil companies. Taken into account are projects that exemplify strong teamwork, solid geoscience knowledge, reservoir and production engineering expertise, outstanding facilities engineering practices, a strong commitment to health, safety, and the environment, and advocate innovative and people-oriented human resource policies and community programs. Previous award winners include the Qatar-gas Debottling project by Qatargas, the Independence Hub project by Anadarko Petroleum, Sakhalin-1 by Exxon Neftegas, Qatargas 2 by Qatargas, Parque das Conchas by Shell, Pazflor by Total, Perdido by Shell, RGX2 by RasGas, and CLOV by Total.