Home Business Three views from three Frac legends – Daneshy, Montgomery and Smith.

Three views from three Frac legends – Daneshy, Montgomery and Smith.

by SuperiorInvest

On September 7, 2022, NSI Technologies held a public Vimeo session with three Fracking Legends selected by the Society of Petroleum Engineers (SPE): Ali Daneshy, Carl Montgomery and Mike Smith.

The topic was how you create value with hydraulic fracturing, often referred to as fracking.

To me, one answer is that fracking has historically increased oil and gas production from vertical wells 3-4 times. Fracking was discovered by Amoco in 1947. Rumor has it that the manager decided that further study was not warranted, but the engineers returned at night and conducted secret underground experiments that proved the concept.

At the second stop is shale fracking, where a 2-mile horizontal well is fracked typically 40 times along its length. Shale is nearly impermeable, so shale wells are nowhere near commercial unless heavily fracked. But the largest shale gas well in the Marcellus made about 70 Mcfd after fracking. There were two non-productive shale oil wells in the Permian announced Devon in 2018 which amounts to 11,000-12,000 boe/dv in the first 24 hours.

The value of fracking? In just 20 years, fracking was responsible for the shale revolution, making the US self-sufficient in oil and gas for the first time since 1947. The shale revolution has enabled the US to export oil and gas since 2016, and the US will become the largest exporter of LNG (liquefied natural gas) in 2022. And where does this LNG go? Right now, most are heading to Europe to shore up gas supplies that Russia is cutting.

Legends of hydraulic fracturing.

Ali Daneshy worked for many years for Halliburton, a service company that provided services such as fracking to oil and gas companies. After that, Ali became an international consultant in the field of fracking and related technologies.

Carl Montgomery worked for Dowell, which became Dowell-Schlumberger, then Conoco-Phillips, Arco, and finally NSI. Carl has a very broad expertise in well stimulation and fracking. As an example of this, I worked with Carl to try to adapt open cavity completions, so successful in coalbed methane wells, to wells drilled in weak sands.

Mike Smith was in Amoco research for many years, then left with Ken Nolte to found NSI. They created a model of massive hydraulic fracturing of tight sandstones that allowed an easy interpretation of the pumping pressure behavior. I actually took one of the vacancies when Mike and Ken left Amoco.

Ali Daneshy.

Ali said he was impressed with shale drilling, where hundreds of fractions are formed around very long horizontal wells in just a few weeks. They can perform simultaneous Frac operations in two or more wells with remarkable efficiency that greatly reduces well completion costs.

The key, Daneshy says, is the development of systems, materials, technologies and alliances, even to the extent of real-time analysis of where the frack is going, using pressure measurements in nearby wells. These pressure changes in the offset wells are what he calls frac-driven interaction data.

Daneshy even wrote a new book called Frac-Driven Interactions (FDI): Guidelines for real-time analysis and execution of fracture treatments.

Carl Montgomery.

Carl discussed his experiences in Siberia when he was tasked with improving the processing of fractions in four huge oil fields, each larger than Prudhoe Bay.

Previous instructions? There was an incentive not to rule out a frac job. This was more important than maximizing fracture conductivity.

In the 15 wells that Carl “value treated,” oil prices increased an average of four times.

In a somewhat unusual move, Montgomery didn’t reveal the secret to creating frac value in Siberia, but instead asked the audience two questions:

1. When you pay money for a fracking operation, what are you actually buying? Hint: it is not a fractional fluid, proppant or pumping equipment.

2. When it comes to a frac contract, who writes it, specifies what you actually want to buy, and has it documented how to get there?

The answers came later, during the Q&A session.

Answer 1: You are buying frac conductivity. But Carl rarely sees it addressed, even today. It says you use proppant, but what kind of proppant and how much is needed for maximum conductivity?

Answer 2: Make sure you set up your frac contracts to maximize frac conductivity as this is the key that controls the flow of oil or gas from the reservoir.

Mike Smith.

Mike has fracked oil and gas wells in 46 countries around the world. His example of frac value creation is based on the Wattenberg field in the DJ Basin in central Colorado, which began drilling in the 1970s.

Smith used frac pressure analysis to diagnose the ongoing jettisoning problem. Above a certain pressure, the natural fractures opened and increased the rate of escape of the pumped fraction. As the frac fluid escaped, the proppant it carried was left behind and clogged the flow, so the pressure spiked, the fractions separated, and the frac job had to be terminated.

Smith adjusted the frac parameters until he was able to pump out all the proppant. This “revised Frac” had a lower pumping rate, a third more proppant and a third less fluid volume. Gas flow from new wells increased sharply.

The new frac has revolutionized the production of gas from the basin as shown in the figure – the use of the Revised Frac started on the vertical blue line. The new wells produced 4 times more than the previous wells.

The improvement in oil production was dramatic. In 2003, the Wattenberg field in Colorado was number 7 on the list of gas producers in the US (see figure). Key to establishing the frac value was Smith’s use of his own new development (with Nolte): frac pressure analysis.

For the future, Smith would like to see more baseline data collected for easier interpretation of sophisticated but expensive diagnostic tools such as microseismic, etc. By baseline data he means stress tests, DFITS, mini-fracs, etc. plus routine real-time recording of bottom hole pressure in offset wells.

It’s fascinating to think about these little snippets of the lives of the giants who worked in fracking – not for years, but for decades.

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