A warning about Permian Basin parent-child wells from a Houston-based investment bank echoes the same kind of cautionary note that was made in April for Oklahoma’s STACK-SCOOP wells.
The Houston Chronicle reported the analysis from Tudor, Pickering, Holt and Company suggested that parent-child wells drilled too close to one another could resulted in a 20% loss of crude.
The analysis from Houston-based investment bank Tudor, Pickering, Holt & Co. — contained in a 61-page presentation seen by Bloomberg — is the latest salvo in the debate on the spacing of fracked wells in the Permian, the most prolific oil patch in the U.S.
When drilled too close to the initial “parent” well, output from a “child” can be much less prolific. But producers risk leaving oil in the ground if the spacing is excessive.
In much of the Permian, a region that stretches across West Texas and New Mexico, the amount of oil that can be recovered from child wells is on average about 20% to 30% lower than that of the parent, the analysis shows. That means overall production from a particular area could be some 15% to 20% lower than projections made by producers.
“Child wells get progressively worse relative to their parent well with tighter spacing,” according to the analysis.
But it’s not all bad news. One solution to the parent-child problem is to drill and frack both wells at the same time, which has been shown to improve recoveries, according to Tudor, Pickering, Holt. Those “co-developed” wells are showing results that are largely in line with company projections, the analysis said.
Last year, 60% of wells in the Permian’s Delaware sub-basin were child or co-developed wells, according to the bank. Until 2017, the bulk of the Delaware was made up of parent wells. Tudor, Pickering, Holt declined to comment on the presentation.CEOs of Centennial Resource Development Inc. and Pioneer Natural Resources Co. respectively — warned earlier this month that producers are running out of prime drilling areas and that the issue will lower U.S. production over time.
The same warning was made in Oklahoma City in April by David Fruit, Vice President of Exploration for Antioch Energy. As the opening speaker at the Production Optimization Congress, SCOOP and STACK 2019, he offered his thoughts on better ways of driving production efficiency when it comes to drilling subsequent wells either on the same pad or same vicinity.
“How do you make big wells?” was the focus of his presentation as he spoke of drilling in the SCOOP and STACK.
“You have to get it in the right landing zone,” he advised. “You have to watch for faults, develop shorter stages with more proppant, develop cluster perforation strategy with each stage and make sure you have even perforation numbers.”
But he cautioned that once the parent well is drilled, the longer time you wait before drilling the child wells, “the lower the performance.”
“It’s hard to ever exceed a parent well,” said Pruitt. “Get ’em in early, at least in the first 18 months.”