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Texas proppant and frac sand trends. Does more sand really equal better wells? Energent Group takes a look at the frac sand data in Permian, Eagle Ford, and Granite Wash to identify key operators and trends.
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TEXAS PROPPANT TRENDS: MORE SAND = BETTER WELLS?
Frac Sand Supply & Logistics ConferenceAugust 21, 2014
Todd [email protected]://www.energentgroup.com
@EnergentGroup
2
ABOUT ENERGENT GROUP
Energent Group is a boutique market research firm focused solely on our client’s needs for oil & gas data and research products. We
help our clients identify top operators and peers in a play, discover sales opportunities, evaluate business line and market expansion, and detect trends in the completion & frac supply
chain.
3
OBSERVATIONS
• Drilling “productivity” highest in Bakken with Eagle Ford following
• Top operators focus on field development and efficiency improvements
• Vertical and horizontal well strategies in the Permian Basin
• Horizontal well focus in the Eagle Ford• Contrasting two key counties
4
30% OF RIGS IN PERMIAN BASIN
558
199194
79 77 69 62 45 44 34 25
Industry continues shift (+205) to Horizontal
5
BAKKEN PER RIG PRODUCTION
Source: EIA Drilling Productivity Report
Jan-1
2
Feb-1
2
Mar
-12
Apr-12
May
-12
Jun-1
2
Jul-1
2
Aug-12
Sep-1
2
Oct-1
2
Nov-1
2
Dec-1
2
Jan-1
3
Feb-1
3
Mar
-13
Apr-13
May
-13
Jun-1
3
Jul-1
3
Aug-13
Sep-1
3
Oct-1
3
Nov-1
3
Dec-1
3
Jan-1
4
Feb-1
4
Mar
-14
Apr-14
May
-14
Jun-1
4
Jul-1
4
Aug-14
Sep-1
40
100
200
300
400
500
600
900
950
1000
1050
1100
1150
Permian EFS Bakken Niabrara Rigs
6
OBSERVATIONS
• Drilling “productivity” highest in Bakken with Eagle Ford following
• Top operators focus on field development and efficiency improvements
• Vertical and horizontal well strategies in the Permian Basin
• Horizontal well focus in the Eagle Ford• Contrasting two key counties
7
TOP 5 OPERATORS ACROSS TEXAS
8
EOG LEADING LOWER 48
Source: EOG Investor presentations
EOG Activity YTD
EOG averages 10 million pounds of frac sand per well in Eagle Ford
9
PIONEER’S PERMIAN FOCUS• Increasing horizontal
rigs (5 to 16) while reducing vertical rigs (11 to 9)
• Optimizing completions– Increasing clusters per
stage– Increasing proppant per
foot– Reducing fluid volume
• 29% horizontal well completions this year
Pioneer Activity YTD
10
ATHLON SCALING UP IN PERMIAN
• Scaling up oil manufacturing with 7,308 drilling locations
• Vertical & horizontal strategy in Permian
• 2% horizontal • 134,000 net acres• Active in Wolfberry
Athlon Permian Activity YTD
11
EP ENERGY’S SUCCESS DRIVERS• Refining lateral
placement & improving stimulation design
• Utilizing resin-coated and white sand
• Cycle time reduction• 100% horizontal in
Permian and Eagle Ford
EP Energy Activity YTD
Source: EP Energy’s investor presentations
12
OBSERVATIONS
• Drilling “productivity” highest in Bakken with Eagle Ford following
• Top operators focus on field development and efficiency improvements
• Vertical and horizontal well strategies in the Permian Basin
• Horizontal well focus in the Eagle Ford• Contrasting two key counties
13
PERMIAN BASIN TOP OPERATORS• Average oil IP’s
are fairly consistent across operators
• Sandridge and Chevron have 100% vertical activity
• COG and Energen are outliers for gas IP’s
OXY
PIONEER
SANDRID
GE
ATHLON
DEVONXTO
APACHE
CHEVRONCOG
ENERGEN -
20 40 60 80
100 120 140 160 180 200 182
149
114 94
81 77 75 60 59 57
OXY
PIONEER
SANDRID
GE
ATHLON
DEVONXTO
APACHE
CHEVRONCOG
ENERGEN -
100
200
300
400
500
600
700
800
Avg IP Gas (MCF) Avg IP Oil (BBL)
14
PERMIAN BASIN SAND USAGE
Midland Basin
Central Basin
Delaware Basin
15
OBSERVATIONS
• Drilling “productivity” highest in Bakken with Eagle Ford following
• Top operators focus on field development and efficiency improvements
• Vertical and horizontal well strategies in the Permian Basin
• Horizontal well focus in the Eagle Ford• Contrasting two key counties
16
EAGLE FORD BASIN TOP OPERATORS
• 99.6% horizontal completions
• Rosetta having success with new gas wells
• Carrizo using 8-15 million pounds of sand per well
EOG
CHESAPEAKE
MARATHON
DEVON
EP ENERG
MURPHY
PIONEER
ROSETTA
COMST
OCK
CARRIZO -
50
100
150
200
250
300 263
174
117
76 72 60 58 56 44 36
EOG
CHESAPEAKE
MARATHON
DEVON
EP ENERG
MURPHY
PIONEER
ROSETTA
COMST
OCK
CARRIZO -
500
1,000
1,500
2,000
2,500
3,000
3,500
Avg IP Gas (MCF) Avg IP Oil (BBL)
17
EAGLE FORD SAND USAGE
Oil Window
Gas Window
18
OBSERVATIONS
• Drilling “productivity” highest in Bakken with Eagle Ford following
• Top operators focus on field development and efficiency improvements
• Vertical and horizontal well strategies in the Permian Basin
• Horizontal well focus in the Eagle Ford• Contrasting two key counties
19
TOP COUNTIES TELL THE STORY
Andrews La Salle
Well Completions 366 261
Oil IP24 Average (bbl) 86.8 905.3
Gas IP24 Average (mcf) 62.6 766.4
Water IP24 Average (bbl) 360.8 1129.6
Frac Sand Average (lbs) 277,685 9,255,944
Sand Volume (MM lbs) 69 1,073
Horizontal (%) 7% 99%
Oil (%) 100% 95%
20
OBSERVATIONS
• Drilling “productivity” highest in Bakken with Eagle Ford following
• Top operators focus on field development and efficiency improvements
• Vertical and horizontal well strategies in the Permian Basin
• Horizontal well focus in the Eagle Ford• Contrasting two key counties
21
CLOSING THOUGHTS• Identify who is issuing horizontal permits in
areas near or adjacent to successful operators or wells
• Determine operators taking manufacturing approach using pad drilling to quantify sales opportunities
• Assess well and frac sand locations for strategic planning efforts
• Monitor upcoming “re-frac” market as opportunity to win business
• Expect down-spacing and field development to continue at this pace through Q4 2014
22