Openhole Multistage vs Plug-n-Perf Completions
`
`Sleeves vs Shots—The Debate Rages
`
`by Richard G. Ghiselin, P.E.
`
`Exhibit 2011
`IPR2016-00596
`
`

`
`Sleeves vs Shots—The Debate Rages
`
`Qittitut Consulting conducted extensive research on operator and
`service company preferences for using the two most popular methods
`for stimulating horizontal multistage completions. The results and
`the reasons for these preferences are a study in the economics of
` expediency versus the economics of a systematic approach.
`
`Although each method has slight
`technical and procedural variations,
`the premise of the research was to
`examine completions categorized as
`openhole multistage (OHMS) versus
`those categorized as plug-and-perf
`(PNP). A broad spectrum of major
`and independent operators as well
`as stimulation service providers was
`polled during Q2 2011 (Table 1).
`
`Table 1. Survey Respondent Demographics
`
`Survey respondent type
`
`Equipment, service or supply company
`
`Independent oil & gas company
`
`Major oil & gas company
`
`National oil & gas company
`
`Other organizations or self-employed
`
`Number of
`respondents
`
`2
`
`47
`
`13
`
`1
`
`4
`
`Technique fundamentals
`In the OHMS technique, the comple-
`tion string is assembled with sliding
`sleeve ports and external isolation
`media in such a way that when the
`completion string is landed, the
`ports lie opposite the predetermined
`depths where formation stimulation
`will be initiated. The interzone isola-
`tion media—either external casing
`packers or swellable packers—are
`
`placed appropriately in competent
`strata with good borehole condi-
`tions. In the case of swellable pack-
`ers, an appropriate time interval is
`allowed for the packers to set. This
`can take several hours or days and
`is accomplished before the frac crew
`is dispatched. Usually the comple-
`tion rig is demobilized and moved
`off location during this interval.
`After the frac crew arrives, the
`stimulation takes place as a continu-
`ous activity. The sliding sleeve ports
`are opened sequentially from toe to
`heel, and the treatment is pumped
`through the open port into the
` formation. Fracturing takes place
`in a typical fashion with the point
`of least resistance fractured first. If
` desired, diverters can be pumped to
`initiate additional fractures in order
`of next-to-least point of resistance
`until the entire stage treatment has
`been pumped.
`At this point in the OHMS tech-
`nique, the next subsequent port is
`opened while simultaneously closing
`off the zone just treated, and pump-
`ing continues on the second zone.
`The procedure is repeated until all
`zones have been treated. It is possi-
`ble to skip a zone if its treatment is
`ill advised for any reason; it is not
`possible, however, to add a zone.
`
`Qittitut Consulting, LLC | August 2011
`
`PAGE 2
`
`

`
`Pumping is only paused shortly
` between stages to allow time for
`sleeve shifting.
`Recently, the OHMS technique
`has been used on cemented comple-
`tions that use special acid-soluble
`cement. After the port sleeve is
`opened, acid is used to dissolve the
`cement opposite the open port,
`which provides access to the for -
`mation behind it so the treatment
`can be pumped. This modification
`eliminates the need for external
`zonal isolation devices and can con-
`strain fracture initiation to the area
`where the cement sheath has been
`dissolved.
`The OHMS technique has been
`applied in several plays, most fre-
`quently in unconventional hori -
`zontal well completions. The most
`attractive feature of the technique is
`its speed. Several stages can be stim-
`ulated in a single day. Initially, the
`technique was limited to about six
`stages, but technical improvements
`have raised that limit to more than
`20 stages per well.
`The PNP technique follows tradi-
`tional completion procedures. A
` cemented liner can be set through
`the completion interval, or an un -
`cemented liner can be used. Typi-
`cally, a plug is attached to the
`bottom of a perforating gun and
` conveyed into the well. Any method
`(pump-down, tubing-conveyed per-
`forating, wireline tractor-assisted
`conveyance or coiled tubing) can be
`used to position the plug/gun combi-
`nation in the lateral. The plug is set
`at the appropriate depth below the
`toe zone, and the plug shears off.
`Then, the gun is pulled uphole and
`positioned precisely opposite the
`first zone to be stimulated. The gun
`is fired and pulled out of the hole. If
`desired, several intervals of the same
`
`Sleeves vs Shots—The Debate Rages
`
`stage can be shot using select-fire
`guns on the same trip. When the
`stage has been treated, the next
`gun/plug combination is deployed,
`and a composite frac plug is set to
`protect the zone. The process is
` repeated for the next stage. Although
`all stages are preplanned, the opera-
`tor can change, delete or add a stage
`if observations indicate such a devia-
`tion from plan is advantageous.
`Another type of PNP treatment
` involves ultra-high pressure abrasive
`jetting that is deployed on coiled
`tubing to perforate and treat indi -
`vidual intervals. Usually, a sand plug
`is set to protect previously treated
`intervals as the process is repeated
`for subsequent stages. The abrasive
`jet technique is used mostly on
` shallower wells, but it has the same
`flexibility as conventional PNP.
`An earlier PNP technique that is
`rarely used now involves setting an
`uncemented liner in the lateral and
`treating the formation through per-
`forations made at selected intervals.
`The theory behind this is that the
`formation will always fracture at its
`point of least resistance. Of course,
`this could be into an aquifer or an
`offset well. Most operators are no
`longer using this technique because
`of its unpredictability and the intro-
`duction of real-time microseismic
`fracture mapping.
`Depending upon the number of
`stages to be treated, the PNP tech-
`nique can take several days or more.
`The big advantage is that since each
`stage is treated individually, deci-
`sions can be made on the fly to
`change the location of the next
`stage, add or delete a stage, change
`the interval perforated, and so on—
`in other words, PNP affords com-
`plete flexibility. The PNP technique
`also favors the implementation of
`
`Qittitut Consulting, LLC | August 2011
`
`PAGE 3
`
`

`
`advanced treatment techniques such
`as simul-frac or zipper frac.
`
`Factors influencing
`the choice of technique
`The savings in cost was listed by
`66% of the respondents as the pri-
`mary factor influencing their deci-
`sion to use one technique over
`another. Higher well productivity
`was cited by another 20%. Therefore,
`the primary drivers are speed for
`
`80%
`70%
`60%
`50%
`40%
`30%
`20%
`10%
`0%
`
`67%
`
`49%
`
`35%
`
`23%
`
`17%
`
`25%
`
`Bakken
`
`Colony Granite
`Wash
`
`Eagle Ford
`
`Haynesville
`
`Marcellus
`
`Niobrara
`
`Figure 1. The OHMS tech-
`nique for frac treatments is
`used in the Bakken play
`more than in other plays.
`
`cost savings or flexibility for higher
`well productivity. The poll also
`showed that in 80% of cases the
` operator rather than the service
`company makes the decision. But
`the decision is seldom obvious, and
`operators appear to be stymied in
`choosing OHMS vs PNP because
`other factors play into their decision.
`There is no question that the
`OHMS technique is considerably
`more efficient in terms of field oper-
`ating time, and the gap grows as the
`number of stages is increased. Sev-
`eral years ago, conventional wisdom
`held that a few widely spaced long-
`length fractures were the best way to
`fully exploit the reservoir and ensure
`maximum economic ultimate recov-
`ery. Using a popular rule of thumb to
`double the frac length, one must
`quadruple the volume of treatment
`pumped. This increases the possibil-
`ity of problems as well as adds to the
`
`Sleeves vs Shots—The Debate Rages
`
`cost. Recent experience has shown,
`however, that numerous closely
`spaced short fractures produce
` better results over the life of the
`reservoir. This outcome would seem
`to tilt the scale in favor of OHMS
`owing to its superior efficiency, but
`OHMS is not the predominant tech-
`nique in many plays.
`The survey revealed that while
`today more than 50% of frac treat-
`ments in the Bakken play use the
`OHMS technique (Figure 1), the use
`of OHMS is considerably less in
`other plays. Turns out that many
` operators believe OHMS carries an
`unacceptably high element of risk.
`If the operator cannot get to total
`depth with the completion, the
` completion must be laid down so a
`reamer or cleanout trip can be made.
`This can be problematic if swellable
`packers are involved because they
`can be activated and cause difficul-
`ties in round-tripping the comple-
`tion. The alternative, if the
`completion is not too far off depth,
`would be to land the completion
`where it is and proceed to treat the
`well at less-than-optimum depths.
`Another more disturbing risk can
`crop up during the treatment. If
`pumping monitors indicate that a
`change should be made in stage
`depth, it cannot be made with
`OHMS. The intervals are preset
`when the completion string is run.
`In addition, enlarged boreholes and
`washouts in the laterals, often
`caused by drilling methods, increase
`the risk that the external isolation
`media will not seal completely.
`Another overriding issue that
`can affect an operator’s decision on
`which technique to choose is the
`critical shortage of frac crews and
`equipment, especially in North
`America. Getting a frac date from a
`
`Qittitut Consulting, LLC | August 2011
`
`PAGE 4
`
`

`
`service company is much easier if
`the crew is needed for only a few
`days. It is exceedingly difficult to get
`a frac crew contracted for a week or
`more. This problem is likely to
`lessen in the future, but presently it
`puts pressure on operators to choose
`expedience over a systematic ap-
`proach, even if the systematic ap-
`proach offers greater flexibility.
`Adding to the complexity of either
`choice is whether water and prop-
`pant material are available. Lack of
`these can bring operations to a halt
`with disastrous consequences. The
`service industry is working to miti-
`gate shortages of both, and results
`vary according to the geographic
` location of the play. Furthermore,
`innovative technology solutions have
`been implemented to alleviate the
`situation somewhat, but an in-depth
`discussion of these solutions is
` beyond the scope of this paper.
`The inherent flexibility of PNP
`would seem to run second to the
`higher efficiency of OHMS, but tech-
`
`72%
`
`45%
`
`43%
`
`17%
`
`31%
`
`29%
`
`Bakken
`
`Colony Granite
`Wash
`
`Eagle Ford
`
`Haynesville
`
`Marcellus
`
`Niobrara
`
`80%
`70%
`60%
`50%
`40%
`30%
`20%
`10%
`0%
`
`Figure 2. Survey respon-
`dents were asked to esti-
`mate the fraction of wells in
`each play that were PNP
`candidates. Respondents
`believed the Haynesville
`play had the technical char-
`acteristics that would be
`most responsive to PNP
`fracturing treatments.
`
`nology has played a major role in
`leveling the playing field. The devel-
`opment of microseismic fracture
`mapping allows operators to monitor
`fracture propagation in real time,
`and the introduction of dissolvable
`diverters allows engineers to steer
`the fractures away from geohazards
`and offset wells. The main benefit of
`
`Sleeves vs Shots—The Debate Rages
`
`PNP is its ability to use real-time
`fracture mapping to make changes
`on the fly and thus place fractures
`where they are wanted, extend them
`as deeply as desired and avoid geo-
`hazards such as aquifers that can
` instantly turn a potential oil or gas
`well into a water well.
`In more mature plays, such as the
`famous Barnett shale of North Texas,
`refracs have become popular. Some
`wells are on their fourth refrac. This
`technique, which can restore new
`life into a declining producer, cannot
`be implemented with OHMS. The
` recently introduced simul-frac and
`zipper frac techniques show great
`promise and play to the PNP camp.
`These techniques involve alternating
`between stages on two or more adja-
`cent wells, holding opposing stages
`in offset wells under pressure while
`treating the opposing stage in the
`well being fractured. Doing this
` creates a protective stress field
`around the pressured-up stages and
`diverts the fracture in the well being
`treated so the fractures do not inter-
`sect. The technique requires good
`coordination between the pumping
`crew and perforating crew, but
` results so far have shown that the
`practice has merit. It also mitigates
`some of the inefficiency of the PNP
`technique because multiple wells
`can be treated on the same trip to
`the field.
`When asked to estimate the frac-
`tion of wells in each play that were
`PNP candidates for technical reasons
`(meaning that they cannot be com-
`pleted using OHMS), respondents
`had strong opinions (Figure 2). Note
`the low frequency in Bakken and
`high frequency in Haynesville.
`
`Qittitut Consulting, LLC | August 2011
`
`PAGE 5
`
`

`
`Table 2. Pros and cons of OHMS completions
`
`OHMS completions are
`highly efficient because . . .
`
`True
`
`No
`False opinion
`
`multiple stages can be
`performed in a single trip.
`
`no perforating or plug runs
`are required.
`
`no plugs have to be drilled
`out afterward.
`
`they take much less time.
`
`OHMS completions can be . . .
`
`problematic if completion
`fails to reach total depth.
`
`inflexible (you can skip a
`stage but cannot add one).
`
`less productive because
`fractures cannot be oriented
`with maximum horizontal stress.
`
`complicated (hardware is not
`foolproof, and failures are very
`difficult to resolve).
`
`problematic because there’s no
`guarantee fracture will propagate
`opposite the open sleeve port
`(fracture could be hundreds of
`feet up or down the well).
`
`74%
`
`14%
`
`12%
`
`82%
`
`3%
`
`15%
`
`69%
`
`70%
`
`19%
`
`13%
`
`12%
`
`17%
`
`66%
`
`14%
`
`20%
`
`57%
`
`27%
`
`16%
`
`32%
`
`37%
`
`31%
`
`75%
`
`9%
`
`16%
`
`78%
`
`7%
`
`15%
`
`Table 3. Pros and cons of PNP completions
`
`PNP completions are preferred
`because . . .
`
`it’s easier to get to bottom.
`
`they’re more flexible (you can
`optimize the frac in real time).
`
`True
`
`62%
`
`False
`
`20%
`
`No
`opinion
`
`18%
`
`72%
`
`17%
`
`11%
`
`Possible issues with PNP completions include . . .
`
`they take longer, but sometimes
`the investment is worthwhile to
`get higher productivity.
`
`future technology will allow 50 or
`more stages in an OHMS completion,
`leaving PNP at a major time
`disadvantage
`
`70%
`
`13%
`
`17%
`
`51%
`
`22%
`
`27%
`
`Sleeves vs Shots—The Debate Rages
`
`Diverse opinions
`in the field
`Survey responses to the pros and
`cons of the OHMS vs PNP tech-
`niques are tabulated in Tables 2
`and 3. A total of 56 of the 116 survey
` participants expressed an opinion,
`and 53 opted not to respond to the
`OHMS true/false questions. This lack
`of response may indicate inexperi-
`ence in multistage stimulation
` completions or a market segment
`that has not yet formed an opinion
`on these issues. The key unresolved
`question is whether saving frac time
`and cost with OHMS is more valu-
`able to operators than potentially
`improving well performance from
`the flexibility but higher-cost PNP.
`Stated another way, one might
`ask, “Is it preferable to use a tech-
`nique that has proved itself to be
`highly efficient when it works, or
`to use one that almost always works
`and may improve estimated ultimate
`recovery of hydrocarbons over the
`life of the well?” Which technique—
`OHMS or PNP—poses the greater
`risk, or which technique promises
`the greater potential reward?
`The responses are consistent with
`expert service company opinions,
`and most agree than not enough
`wells have been on production long
`enough to estimate EUR with confi-
`dence. In many cases, no one has
`made the necessary investment in
`time and expense to perform a
` systematic evaluation of the two
`techniques with the objective of
`estab lishing a set of well or reservoir
`conditions where one technique is
`clearly superior. The following quo-
`tations from the survey were repre-
`sentative of prevailing opinions:
`
`Qittitut Consulting, LLC | August 2011
`
`PAGE 6
`
`

`
`PNP aficionado:
`“I like the concept of openhole
`packers and ports; however, I do
`not like the idea of uncemented
`liners with multiple perforations.
`In hard formations, OHMS is a
`good solution, but in sand or silty
`shale I think it is a poor choice.
`Ultimately, if you frac one set of
`perforations at a time, you will get
`the best frac. But 40-stage PNP
`fracs are very expensive. With
`OHMS, there have been too many
`instances where balls have not
`been dropped and fracs have gone
`into zones that were already
`fraced. If you get a screenout, it’s
`very difficult to clean out, because
`you can’t get the coiled tubing
`past the restrictions in the ports.
`In theory OHMS is great, but
`practically it is not great. Overall
`economics of the well and recov-
`ery are less with OHMS than with
`cemented liners and PNP.”
`
`Open-minded fence-sitter:
`“Openhole frac port completions
`are faster, but the cost of the
`equipment is so high as to offset
`the time savings. PNP comple-
`tions allow for a much greater
`treatment density than OHMS and
`make better wells. I would like to
`see OHMS proved up in cemented
`laterals. The combination of mul-
`tiple ports and cement behind
`pipe will allow treatment density
`equivalent to PNP.”
`
`OHMS fan:
`“The PNP method, although reli-
`able, results in much higher frac
`costs due to the multiple stop and
`start pumping operations, which
`effectively limits the number of
`stages that can be pumped.” (Note
`that there is no evidence in the
`
`Sleeves vs Shots—The Debate Rages
`
`literature to show that there is a
`limit to the number of stages that
`can be treated using PNP. This
`comment refers to an “effective”
`limit due to high costs.)
`
`Each procedure has its cham -
`pions, but overall the PNP technique
`is the most popular, its inherent in-
`efficiencies notwithstanding. Even
`with clear acknowledgement of the
`speed with which OHMS treatments
`can be implemented, in a significant
`number of areas the complexity and
` potential for problems have tem-
`pered enthusiasm for the technique.
`Less clear is the acceptance of a
` potential advantage of one technique
`over the other in terms of productiv-
`ity potential where the number of
` respondents choosing true, false or
`no opinion was almost equal.
`A clear bias for OHMS in oil plays
`such as the Bakken was noted, most
`likely because significant financial
`advantages can be obtained by short-
`ening time-to-market of a high-
`priced commodity, and because the
`relatively higher upfront cost of
`OHMS completions can be justified
`in a play based on oil economics. The
`opposite is true in shale gas plays,
`where the opportunity to optimize
`ultimate production influences oper-
`ators to choose PNP completions.
`A recently completed benchmark
`study compared decline curves from
`the five major shale gas plays. In
`each case, initial production regis-
`tered a sharp peak that rapidly
` declined to about 10% to 20% of the
`peak value, but then flattened and
`showed potential to continue at that
`rate for 20 or more years. With the
`possibility of realizing sustained
` production for decades, some opera-
`tors are taking every step possible to
`optimize their completions.
`
`Qittitut Consulting, LLC | August 2011
`
`PAGE 7
`
`

`
`0%
`
`20%
`
`40%
`
`60%
`
`80%
`
`100%
`
`Openhole multistage completions will . . .
`
`Plug-and-perf completions will . . .
`
`Composite plugs sold in the U.S. will . . .
`
`Amount of perforating in horizontal wells will . . .
`
`Figure 3. Most respondents forecast increasing activity through 2016.
`
`Decrease
`
`Stay the Same
`
`Increase
`
`0%
`
`20%
`
`40%
`
`60%
`
`80%
`
`100%
`
`Bakken
`
`Colony Granite Wash
`
`Eagle Ford
`
`Haynesville
`
`Marcellus
`
`Niobrara
`
`Decrease
`
`Increase Slowly
`
`Double
`
`Figure 4. Respondents’ opinions were mixed when asked to forecast well
`activity over the next three years in plays where they had experience.
`
`0%
`
`20%
`
`40%
`
`60%
`
`80%
`
`100%
`
`Bakken
`
`Colony Granite Wash
`
`Eagle Ford
`
`Haynesville
`
`Marcellus
`
`Niobrara
`
`Decrease
`
`Increase Slowly
`
`Double
`
`Figure 5. Respondents predicted future OHMS activity by play through
`2016.
`
`Sleeves vs Shots—The Debate Rages
`
`Looking into
`the crystal ball
`Respondents were asked to forecast
`OHMS and PNP activity through
`2016. Results were generally opti-
`mistic, with slightly more favoring
`OHMS (Figure 3).
`When asked to forecast activity
`over the next three years for each
`technique in plays where they had
`experience, respondents’ opinions
`were mixed. Almost as many reck-
`oned the activity would decrease
`rather than increase. However,
`OHMS was definitely rated to gain
`traction in plays other than the
`Bakken where it is already well es-
`tablished (Figures 4 and 5). It is un-
`known how seriously these forecasts
`were influenced by present supply
`shortages.
`There is ample scientific evidence
`that completions can be optimized
`by careful attention to pretreatment
`planning and design, along with
` systematic implementation of stimu-
`lation procedures. A thorough
` understanding of formation geo -
`mechanics as well as geological
` heterogeneity and complexity should
`result in less risk and should reduce
`production uncertainties. However,
`it is also correct to say that not all
`wells suffer these risks and uncer-
`tainties. Accordingly, one can con-
`clude that an optimum solution will
`be obtained when preplanning shows
`clearly which completion and stimu-
`lation technique is most appropriate
`for the well in question. This will
`allow an objective evaluation of
`OHMS versus PNP under the prevail-
`ing logistical and crew availability
`conditions.
`In any case, hydraulic fracturing
`technology development is ongoing.
`Innovations are being introduced
`that have the potential to swing
`
`Qittitut Consulting, LLC | August 2011
`
`PAGE 8
`
`

`
`Sleeves vs Shots—The Debate Rages
`
`opinion back and forth between
`methodologies, and a totally new
` approach could be just around the
`corner. Already there is talk about
`“smart sleeves” that eliminate the
`ball-size limitation and, if perfected,
`will allow almost unlimited stages
`to be treated on a single trip.
`It is safe to say that the current
`shortages of field crews, equipment,
`proppant and water will ultimately
`be resolved, so the effect these con-
`ditions have on today’s treatment
`
` decisions is temporary. It is also safe
`to say, as history proves, that tech -
`nological advances will improve the
`reliability and cost effectiveness of
`the various completion techniques,
`and may even introduce some new
`ones. The competition between
`OHMS and PNP is far from over.
`
`RICHARD G. GHISELIN, P.E.
`SENIOR CONSULTANT
`QITTITUT CONSULTING, LLC
`
`Qittitut Consulting, LLC | August 2011
`
`PAGE 9
`
`

`
`Sleeves vs Shots—The Debate Rages
`
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`Qittitut Consulting, LLC | August 2011
`
`PAGE 10
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