But in the handful of years since hydraulic fracturing has been applied to Wolfcamp rocks, the EUR (estimated ultimate recovery) numbers have kept going up.
A modern horizontal Wolfcamp well today has an IP rate of 900 b/d, ten times that of a vertical one. EOG, a leading Permian operator, has delivered 3,500 b/d of oil from some wells. Exponential increases in well productivity have been achieved by the engineering equivalent of throwing in the kitchen sink – longer laterals, more proppant, more water, higher pump rates, etc.
Despite all this technical progress, operators are taking their foot off the gas.
The Wolfcamp rig count is now flattening with labour and equipment hard to find. The focus is turning to execution and delivering value rather than growth for growth’s sake.
There are also signs that inexorably ramping up the intensity of the extraction process is leading to diminishing returns. Around 90% of horizontal Wolfcamp wells have been drilled with laterals less than 10,000 foot. Normalised productivity on longer laterals – those above 10,000 foot – has been 20% lower. Drilling costs rise exponentially with depth, and there’s a suspicion that longer wells are hitting a cost efficiency ceiling.
Proppant metrics fall off even more precipitously.
The top 10% of high volume proppant wells saw production per ton of sand drop by over 50% compared to average Wolfcamp completions. The additional proppant was used to help buoy early production metrics and shorten payback periods, but have not always increased NPV. Typical Permian wells use about 1,400 pounds of sand per foot, but wells where twice as much sand is pumped don’t deliver commensurate volumes of oil.