Shale’s super rigs getting bigger paychecks in the oil patch

[thackney]

Shale’s super rigs getting bigger paychecks in the oil patch
http://www.chron.com/business/energy/article/Shale-s-super-rigs-getting-bigger-paychecks-in-11269621.php
July 6, 2017

U.S. oil companies are spending more money on so-called super-spec rigs, machines that churn out wells much faster than older models that led the first shale boom.

Xtreme Drilling Corp., a Canadian rig supplier, said this week it has locked in more than $24 million in revenue over the next year with three contracts for upgraded super-spec rigs, pushing the rig day rates toward $22,000 a day.

And Nabors Industries, a rig contractor in Houston, recently said it has contracted some super-spec drilling rigs at prices of up to $23,500 a day, almost 20 percent higher than spot rates in places like the Permian Basin and the Eagle Ford Shale in Texas.

"Operators are clearly growing concerned with the availability of super-spec equipment," said James West, an analyst at investment bank Evercore ISI. That's why some U.S. producers have been willing to boost rig contract prices by 10 percent to 20 percent, West said.

These super-spec rigs – built with a bigger load capacity and faster drilling systems – can drill an oil well in less than 10 days, shaving more than a week from the average drilling time in 2010, and allowing companies to drill a greater number of wells each year....

[IsailedawayfromFR]

Unconventionals are all about capital pricing, so I just see this as what rig manufacturers have to do to stay relevant.

[SunkenCiv]

Sidebar: one of the arguments in favor of opening the Qattara Depression to the Mediterranean is, currently the surface is such a mess that oil exploration isn't feasible.  Flooding it to full depth would allow offshore rigs to explore and develop.

[Smokin Joe]

Have worked with both Nabors and Extreme rigs, Patterson, too, in recent years; All three cocmpanies have rigs set up for pad drilling that can walk from wellhead to wellhead on a pad. It saves time, money, and rig up/down costs are spread over the AFEs for however many wells are going to be drilled on the pad, instead of having to rig down and up for every successive well. It has been that way for a few years now.

[Joe Wooten]

Sidebar: one of the arguments in favor of opening the Qattara Depression to the Mediterranean is, currently the surface is such a mess that oil exploration isn't feasible.  Flooding it to full depth would allow offshore rigs to explore and develop.

That is amusing. There have been proposals to dig a canal from the Med to the Qattara Depression for over a century and no one has done it yet. This is a big project just begging for some government funding........

[SunkenCiv]

That is amusing. There have been proposals to dig a canal from the Med to the Qattara Depression for over a century and no one has done it yet. This is a big project just begging for some government funding...

The Eisenhower administration pitched the idea (sounds like one of Ed Teller's) of digging the tunnel or canal using a nuclear weapon.  Nasser's regime was horrified, and rightly so.  I don't support the idea of a never-filling lake to maintain hydroelectric power generation (not that anyone asks me).  I'd want to see two feeds from the Med -- a tunnel heading up from the Med, where brinier water would slide back down; and a canal (or more than one) bringing in fresher surface water.  Other than water, the new lake would be kept isolated, and used as a giant fish farm to produce bluefin tuna and other sushi species that are becoming rare and expensive.  Sponges, and jewel coral might be good products as well.  There is a substantiial freshwater aquifer system that currently winds up wetting but not filling the basin, so over time salinity would fall a bit, then stabilize.

[Bigun]

Have worked with both Nabors and Extreme rigs, Patterson, too, in recent years; All three cocmpanies have rigs set up for pad drilling that can walk from wellhead to wellhead on a pad. It saves time, money, and rig up/down costs are spread over the AFEs for however many wells are going to be drilled on the pad, instead of having to rig down and up for every successive well. It has been that way for a few years now.

Been doing the same thing Offshore for ages.

[Smokin Joe]

Been doing the same thing Offshore for ages.

Offshore is set up to drill directionally on a template, iirc. On land the wellheads are separated by 30 feet or more. On a 4 well pad, there are roughly 90 feet from the end well to the other end, and it was a trip when I saw the first walking rig make the trek in less than 8 hours. That one had the hydraulic pads like a GEM (Giant Earth Mover on the order of Big Muskie). Others (Like the Extreme Rig) were set up on a track to slide over.

Overnight, companies specializing in moving rigs bit the dust, having lost 3/4 of their business.

[IsailedawayfromFR]

Been doing the same thing Offshore for ages.

Those offshore rigs are semi-permanent.

These new generation of onshore rigs are built for mobility - both walking to different wellbores and rigging down and moving to different locations at other pads.

Completely different situations.

The big change in all of this is the Permian - where the largest basin in the US was drilled up vertically and now is being redrilled using horizontals.  Vertical wells rarely needed multi-pad drilling aspects.

[Smokin Joe]

Those offshore rigs are semi-permanent.

These new generation of onshore rigs are built for mobility - both walking to different wellbores and rigging down and moving to different locations at other pads.

Completely different situations.

The big change in all of this is the Permian - where the largest basin in the US was drilled up vertically and now is being redrilled using horizontals.  Vertical wells rarely needed multi-pad drilling aspects.

Here the first 8-9000 feet are vertical, then the curve, then the lateral, although the 'vertical' part is often directional to a small degree to get separation from the other wellbores or to reach over setback lines when the curve is drilled. 1280 acre spacing, 4 laterals about 9500 ft. long each in the same formation from the same pad. If the Three Forks is done, too, up to 8 wells on the pad, and if the Pronghorn is present and drilled separately, another 2-4 wells. If there are two 1280 acre spacings end to end (a 4 section strip) it would be theoretically possible to do as many as 24, although the most I know of on one pad at present is 14 (my information may be dated).

[IsailedawayfromFR]

If there are two 1280 acre spacings end to end (a 4 section strip) it would be theoretically possible to do as many as 24, although the most I know of on one pad at present is 14 (my information may be dated).

That seems about right, but I bet the drawing boards during this downturn are fixing to up the ante considerably.

The number of benches in the Williston pales when compared to the possibilities in the Permian.

And up we go, into the wild, blue yonder.....

[Smokin Joe]

That seems about right, but I bet the drawing boards during this downturn are fixing to up the ante considerably.

The number of benches in the Williston pales when compared to the possibilities in the Permian.

And up we go, into the wild, blue yonder.....

THere are lots of possibilities in the Permian, but there are over a dozen producing formations in the Williston, and I have worked horizontal wells in the Ratcliffe, Midale, Mission Canyon, Bakken, Three Forks, Red River B, and Stonewall, (I missed out on the Nisku/Birdbear laterals). There are other possibilities as well. The Williston Basin has a lot of oil yet, and no one has tried the gas sands at depth except for vertical wells.

[IsailedawayfromFR]

THere are lots of possibilities in the Permian, but there are over a dozen producing formations in the Williston, and I have worked horizontal wells in the Ratcliffe, Midale, Mission Canyon, Bakken, Three Forks, Red River B, and Stonewall, (I missed out on the Nisku/Birdbear laterals). There are other possibilities as well. The Williston Basin has a lot of oil yet, and no one has tried the gas sands at depth except for vertical wells.

All true, but the places where say a dozen zones economically viable at the same location are few and far between in the Williston.  And just a few are viable for multi-mile laterals.

[Smokin Joe]

All true, but the places where say a dozen zones economically viable at the same location are few and far between in the Williston.  And just a few are viable for multi-mile laterals.

Check out the Beaver Lodge Field, and the Nesson Anticline.

How far are you going in the Permian? The longest laterals I worked here were over in the SE edge of the Elm Coulee Field, with a 2 1/2 section spacing, over by the MonDak Field. We broke all the company depth records, lateral length, etc.
It has been 15 years, but we had a lot of trouble with the ends, where steering became an issue (tough to slide without stalling the mud motor at that extension)--note, too, the Bakken is bound by source rock shales, but the target isn't shale, it is a mixture of dolomite, siltstone, very fine sand, and limestone.

Note, too, that there have been technological advancements since then, but they were in either their infancy or not available then.

[IsailedawayfromFR]

Check out the Beaver Lodge Field, and the Nesson Anticline.

How far are you going in the Permian? The longest laterals I worked here were over in the SE edge of the Elm Coulee Field, with a 2 1/2 section spacing, over by the MonDak Field. We broke all the company depth records, lateral length, etc.
It has been 15 years, but we had a lot of trouble with the ends, where steering became an issue (tough to slide without stalling the mud motor at that extension)--note, too, the Bakken is bound by source rock shales, but the target isn't shale, it is a mixture of dolomite, siltstone, very fine sand, and limestone.

Note, too, that there have been technological advancements since then, but they were in either their infancy or not available then.

Am not questioning the abilities to go far in the Williston (Personally, I helped organize and drill/complete the first 15,000' lateral for our company in Dunn County) but am considering the number of stacked pays horizontal well pads which might exist.  As far as some of the formations like the Red River, my reservoir engineering tells me that conventional reservoirs like that are more akin to shorter laterals no longer than say 4,000' generally.

What I am considering is the lateral extent of the opportunities with multiple stacked pays that can be skewered with horizontal wells in the Williston on a multipad may be  quite limited compared to what the Permian has to offer.  The play aerial extent by and large are just so much bigger in the Permian.

One other thing is that, with the greater vertical well density in most places, horizontals should be able to be steered more effectively with the many more control points to guide.

Am certainly not saying the opportunities are not there in the Williston, as you can certainly speak more forcefully with your experience in that basin; just saying that the Permian potentially has multiples of multi-well pad opportunities comparatively speaking.