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REDEFINEDBUILDING VALUE IN UNCONVENTIONAL RESOURCES

Nick LanceReservoir Engineering Intern

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Introduction

• Born in Midland, Texas• Lived in Alaska,

Singapore• Sophomore at University

of Texas at San Antonio• Mechanical Engineering

major• HUGE Texans fan

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Only One Texan team!

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Overview

• Main Project: Create a database for the recently acquired Permian play• Inexperienced with the data compiled

• Field trip to the Permian Basin• Inventoried production equipment

• Permian Basin capitol inventory

• Attended Weatherford’s artificial lift seminar

• Compiled wellbore diagrams & reviewed daily reports

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Delaware Basin: Permian Prospect

• Hour drive west of Midland in Pecos, Texas• Delaware Basin• 62 operated producing wells• 29 non-operated producing wells• 45,042 net acres• 69,501 gross acres

Rosetta operated

Non-operated

Legend

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Delaware Basin Subsurface

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Database Procedure

• Problem: Permian acquisition data in multiple sources

• Compiled all wells both op & non op• Double checked with reserves database

• Identified information that was to be incorporated

• Consolidated data in excel by using various formulas

• Land • Production• Geology • Completions• Drilling • Cost information

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Land & Reservoir Data

• Land• WI/ NRI• Section & block• AFE & API numbers

• Used as references

• Reservoir • Type curve area• Reserve category

Type Curve Area Map

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Geology Data

• Bone spring net wet sands

• Net pay & isopach• All zones

• Total net wet & net pay sands

• Recompletion tier• Well review

3rd BS Upper net pay map

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Drilling Data

• Total depth (TD) & date• Spud date• Type of well• Days drilled• Casing design• Mud weight (MW) at TD

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Production Data• Cumulative oil, water,

gas produced • 6, 12, 24, 60 months

• Average 30 day BOPD & MCFD

• Oil & Gas IP• Artificial lift • Gas oil ratio (GOR)

Date

Prod

uctio

n (b

bl/d

)

Annie Oakley 23 1

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Completions Data

• Top, bottom & total perf• Number of stages• Completion type• Fluid left to recover (LTR)• Total proppant pumped

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Database Analysis

• Input excel database into Spotfire• Normalize data• Spot trends & determine the reason for

outliers• Cost • Time• Production• By area • Operator

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Estimated Gross Cost vs. Project Start Date• Comstock’s avg. - $4,595,913• J Cleo avg. - $3,537,291• Comstock avg. - $4,634,533 (before 4/1/13)

$4,522,429 (after)• Difference - $112,104

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AFE Varience vs. Project Start Date

• In 2013, CRK over spent every AFE but one

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Comstock & J Cleo AFE Variance vs. Project Start Date

• Comstock Avg. net var - $460,381• J Cleo Avg. net var - $63,648

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Total Gross Pay vs. Total Net Pay

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Total Gross Pay vs. Total Net Wet

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30 Day Avg. BOPD vs. Proppant per Stage

• More proppant doesn’t necessarily mean more production• 70% of wells producing above 250 BOPD pumped XL

downhole• 35.1% of wells below 250 BOPD pumped XL

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Permian Basin Field Trip

• First week at Rosetta Resources

• First experience on oil field• Steep learning curve on

functionality of equipment • Purpose: Inventory the

infrastructure of all wells• Pumping units• Heater treaters &

separators• Oil & water storage tanks

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Flow Schematic

Separator

Sales

Storage Tanks

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Capital Inventory Maps

• What is capital inventory?• First assignment on the job • Recorded acreage • Block & section• Number of wells

• Drilled or proposed• Horizontal or vertical

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Artificial Lift Course

• Learned each artificial lift type• How each lift works• Pros & cons of each• See various equipment of each lift • Best parameters for use

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When to Use Each Lift?Gas-Lift Plunger

LiftRod Lift PCP ESP Hydraulic

Jet Pump

Max Depth 18,000 ft 19,000 ft 16,000 ft 8,500 ft 15,000 ft 20,000 ft

Max Volume

75,000 bpd

200 bpd 6,000 bpd 5,000 bpd 60,000 bpd

35,000 bpd

Max Temp 450 °F 550 ° F 550 ° F 250 ° F 482° F 550 ° F

Corrosion Handling

Good to excellent

Excellent Good to Excellent

Fair Good Excellent

Solids Handling

Good Fair Fair to good

Excellent Sand< 40ppm

Good

Fluid Gravity (° API)

>15° >15° >8° 8°<API<40° Viscosity< 400cp

>6°

Efficiency N/A N/A 45% to 60%

50% to 75% 35% to 60%

10% to 30%

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Daily Reports

• Learned how to read daily reports

• Daily & cumulative cost• Tangible &

intangible• Understood daily

process of drilling & completing wells

• Wellbore diagrams (WBD)• Tycoon 1804H• Lenox 2 2

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Recommendations

• Reevaluate type curve areas• Fill in non-op completions data• Include porosity, permeability, & other

subsurface characteristics in database• Fill in EUR (estimated ultimate recovery) to

assess well’s performance

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Summary & Learnings

• Realized importance of having data in one location

• 80% of time gathering data while spent 20% of time analyzing

• Start with end in mind for analysis purposes

• Data can be imperfect• Appreciate the opportunity

as a freshman

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Thanks

• Special thanks: Lauren DeRouen• Permian team

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Questions