HOUSTON, Oct. 2, 2015 /PRNewswire-iReach/ — E&Ps and oilfield service companies are proving horizontal well refracturing (refrac) technology is effective and economic. New research from Energent Group reveals that operators executing refrac well programs in the Haynesville Shale are demonstrating the financial returns required to take refracturing across the shale plays.
The oil & gas industry continues to react and adjust to the new volatile market reality. In 2015, the dramatic shift in commodity prices caused an equally intense shift in priorities and budgets for E&Ps. As operators continue to slash costs and crews, the focus is on programs which yield financial returns at today’s commodity prices.
“Operators must find ways to reduce the uncertainty of refrac programs and demonstrate returns compared to other investment options,” says Todd Bush, Principal of Energent Group and one of the report’s authors. “With the thousands of horizontal wells drilled across the shale plays, operators are now using lessons learned from recent completions to extract more value from existing assets.”
By 2020, the Haynesville Shale refrac market will exceed $500 million, says the new Refrac In-Depth Series: The Haynesville Refrac Study.
Refracturing costs vary depending on the type of job, lateral length, and method of refracture. However, based on proppant, chemical, and stage information, the range of refrac costs are $900,000 to $2,800,000 for several operators in the Haynesville Refrac Study. With gas prices near $2.75 / Mcf, refrac jobs at $1.75 million are economically viable. Combining a bottoms-up and top-down approach, Energent Group’s study revealed the average refrac cost to be around $1.65 million per well.
Energent Group’s methodology draws from the company’s proprietary database that includes wells, completions, well costs, oilfield chemicals, production volumes, and horizontal wells. Using primary research and the proprietary data, the study triangulated refrac wells across the Haynesville Shale to uncover the operators and service companies involved in refrac programs.
According to the study, operators in the Haynesville Shale are in a unique position to demonstrate capital efficiency while proving effectiveness of their refrac programs. This, in turn, will make their Haynesville Shale assets more attractive acquisition candidates. A strong indicator of this is investment by several investment banks, which are actively funding refrac initiatives across the shale plays.
Energent Group’s Refrac In-Depth Series continues with the Bakken, Barnett, Eagle Ford, & the Permian. To find out more, visit http://energentgroup.com/refrac-in-depth-series/.
About Energent Group
Energent Group is a market research firm focused on well life-cycle & frac market intelligence–how much sand operators use, who’s pumping, and what they’re pumping. Energent Group helps sales & marketing teams commercialize new products, benchmark performance, & track well completions in top U.S. shale plays: Texas (Eagle Ford, Permian), New Mexico, North Dakota (Bakken), Colorado (Niobrara), Louisiana (Haynesville), and more.
Media Contact: Todd Bush, Energent Group, 7139369290, [email protected]
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SOURCE Energent Group