At the Society of Petroleum Engineers Permian Basin Energy Conference, industry leaders detailed the advanced techniques being deployed to maximize oil extraction and counter concerns about a potential peak in US shale production. These methods are critical for the Permian basin, which accounts for nearly half of total US output.

Advancements in Lateral Drilling

Operators are significantly extending the length of well laterals to improve economic viability and access stranded acreage. Hibernia Resources, for example, has progressed from hesitant to drill beyond two miles to routinely drilling laterals up to four miles long, facilitated by more reliable steerable drilling tools. The company has drilled approximately 35 wells in the Dean formation, with most ranging from three to four miles, including three U-turn wells that make a 180-degree turn underground. This approach economically unlocks previously unavailable acreage. Chevron is also pursuing longer laterals, though it continues to work on lowering break-even costs for some potential fracking sites to make them financially feasible.

Technical and Economic Considerations of Longer Laterals

Longer laterals are considered the "lowest hanging fruit" for efficiency gains, with a push to increase their use in completions. While four-mile laterals have been limited in number, they have proven fairly successful. However, they introduce technical challenges, such as the need for more expensive jointed tubing when standard coil tubing is insufficient for the distance. Despite these barriers, the average lateral length in the Permian is around two miles, indicating significant room for growth, even if the widespread adoption of four-mile laterals is not feasible for most companies.

Proprietary Chemical and Gas Injection Enhancements

Companies are leveraging proprietary chemical solutions to enhance recovery. Chevron uses proprietary surfactant treatments, a technology it has deployed for six to seven years, testing various chemicals at different times. ExxonMobil utilizes a petcoke-based proppant, which Diamondback Energy has studied extensively, though Diamondback currently uses cheaper wet sand. Additionally, Chevron is piloting a gas injection program in the Midland basin, with plans to expand it to the Delaware basin. This process involves shutting in wells and injecting gas to build reservoir pressure, a method likened to inflating a "leaky balloon" due to the reservoirs' limited but existent permeability and connectivity.

Operational Efficiency and Development Strategies

Operators are adopting innovative completion and development strategies to boost efficiency. Diamondback Energy has implemented simulfracs—performing two hydraulic fractures simultaneously with one rig—as its most significant step change in efficiency, preferring this over a single rig performing three fractures (trimulfrac). Furthermore, a shift in development philosophy is occurring. Since 2019, Diamondback has moved from parent-child well patterns to cube development, where multiple horizontal wells are drilled from a single surface location. Hibernia Resources also endorses the cube method as its preferred development strategy, acknowledging that while it extends the time from initial capital investment to first production, it is considered the ideal way to develop a unit if capital can be deployed and returns can be awaited.

Future Outlook and Innovation

The industry anticipates continuous innovation, with the understanding that current knowledge is not final. The focus remains on discovering better methods and new tools to improve extraction, as the technological landscape in the Permian basin continues to evolve.

This material is an AI-assisted summary based on publicly available sources and may contain inaccuracies. For the original and full details, please refer to the source link. Based on materials by Robert Stewart. All rights to the original text and images remain with their respective rights holders.