American Oil and Gas Reporter - November 2017 - 83

Investments in refracturing Bakken Shale
wells must compete with the economics
of drilling new wells in the Bakken as
well as other unconventional resource
plays, Curtis Ryland, vice president for
Marathon Oil's Bakken asset, advises
the North Dakota Petroleum Council.

very meaningful with EOR is going to
unfold in the next 12-24 months."
Reflecting that many innovations come
through learning from failures, he encouraged companies to keep experimenting. "I think we are at a new phase," he
expressed. "We have sort of refined the
original idea; now we need a new idea.
We have hunches, but we need experimentation. In the process of learning my
original idea was wrong, I learn something
else. That is how information comes."
Refrac Data
Another chapter in the Bakken playbook
is refracturing old completions. Helms
figured around 200 Bakken wells had been
refractured, mostly early-generation completions drilled between 2006 and 2009.
"In many of those cases, refracturing
created a well that was better than the
original," he said, estimating there were
between 1,000 and 2,000 wells drilled in
those years.
Kringstad said the Pipeline Authority
was analyzing a dataset of 185 Bakken
refracs, some of which he said had produced wells as good or better than the
original, while others had merely slowed
the decline rate.
Nearly half of the wells-92-in the
dataset are in Dunn County, N.D., where
Kringstad said the average recompletion
had averaged 33 percent higher production
than the original completions. Another
34 refracs are in McKenzie County and
have averaged 41 percent higher production rates, he continued, but 36 refracs in
Mountrail County have averaged only
marginally higher production.
Reasoning that the best refrac candi-

dates would be located in proximity to
better wells, Kringstad reported North
Dakota had 1,955 wells drilled between
2007 and 2011 that were within two and
a half miles of wells with initial production
rates of 800 barrels a day or greater.
Turning to the economics of refracturing, Kringstad calculated the volume of
incremental oil necessary to earn a 10-20
percent internal rate of return at a wellhead
price of $45 a barrel for refracs costing
between $2 million and $4 million. While
200,000 incremental barrels will pay out
a $2 million refrac, he said it would take
closer to 300,000 incremental barrels for
a $3 million refrac and nearly 400,000
barrels for a $4 million recompletion.
Looking at it another way, Kringstad
said that for a refrac resulting in 100,000
incremental barrels to earn a 20 percent
IRR would take a wellhead price of
about $60 for a $2 million refrac, nearly
$90 a barrel for a $3 million frac and
$110 for a $4 million refrac. At 200,000
incremental barrels, he continued, the
20 percent IRR break-even wellhead
price goes to about $45 for a $2 million
refrac, $55 at $3 million and $70 for a
$4 million recompletion.
Refrac Considerations
For a company such as Marathon Oil,
offered Curtis Ryland, regional vice pres-

ident for Marathon's Bakken asset, beyond
earning an acceptable rate of return, a
Bakken refrac must be a better investment
than alternatives.
"We have to compete for capital against
three other very active basins," he observed. "It is exciting to see what we can
do with old wells, but does that compete
with new wells in the Bakken? Does it
compete with wells in the Permian Basin,
Oklahoma or the Eagle Ford?"
When considering a refrac, Ryland
said Marathon factored in the cost of the
recompletion and the operational risk,
the remaining resource target, and the
anticipated effectiveness of the recompletion technology.
"When I evaluate whether to shut in a
well and refrac it, I must consider all the
factors," he said. "We also may receive
input from working interest owners, and
at times, mineral interest owners. The
main question is whether it makes economic sense to justify a refrac."
Ryland said the company began its
Bakken development in 2006-09 doing
"barefoot," or open-hole completions with
low proppant concentrations and no mechanical isolation. "To date, our refracs
have been focused on improving on these
old completions," he advised. "We have
found wells with those early completions
compete favorably on the economics." r

Smart Lubrication System Keeps Compressors Up
VIENNA, AUSTRIA-A new smart
lubrication system for reciprocating compressors puts an end to shutdowns related
to lubrication, HOERBIGER says.
The company says its XperLUBE system uses automotive-style solenoid injectors to deliver lubricant in precise quantities. Unlike traditional lubrication devices,
XperLUBE integrates fully with modern
control systems and adapts to changes in
operating conditions, HOERBIGER reports. Each injector records the precise
volume of oil delivered at every stroke,

providing feedback to ensure the actual
lube rate always matches the target value.
Too little oil increases maintenance
costs and gas leakage, while too much
damages valves, reduces power and efficiency, and creates problems downstream,
HOERBIGER warns. Based on 1,000
compressor audits, the company estimates
that over- or under-lubrication affects a
third of all reciprocating compressors.
For information, visit www.hoer biger.com.
r

Stakeholder To Build Pipe In Emerging Permian Play
SAN ANTONIO-Stakeholder Midstream LLC has revealed plans to build a
natural gas gathering system and expand
its Permian Basin crude oil gathering
system to serve producers drilling horizontals targeting the San Andres formation.
Stakeholder indicates its gas gathering,
treating and processing system will include
low-pressure sour gas gathering lines
across Yoakum County, Tx., and into Lea
County, N.M. To support its expanded
gathering footprint, Stakeholder says it

will construct a state-of-the-art treating
and processing facility in Yoakum County.
The facility will have front-end liquids
handling, an amine treater and acid gas
injection well, a cryogenic processing
plant with the capacity to process 60 million cubic feet of gas a day, and a nitrogen
rejection unit.
Stakeholder says the gas system will
be fully operational in the third quarter
of 2018.
For information, visit www.stakeholdermidstream.com.
r
NOVEMBER 2017 83

http://www.hoerbiger.com http://www.hoerbiger.com http://www.stakeholdermidstream.com http://www.stakeholdermidstream.com

American Oil and Gas Reporter - November 2017

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