American Oil and Gas Reporter - November 2017 - 57

SpecialReport: Oil & Gas Computing

Shale Plays Driving Logistics Solutions
By Tim Beims
Logistical complexities in horizontal
resource plays are stretching the upstream
supply chain to new limits to fit the scale
of field operations that consume vast
quantities of pipe, proppant, chemicals
and other goods around the clock.
History teaches that it was a simple
logistics failure-not the harsh Russian
winter nor brilliant military tactics-that
really brought Napoleon to his knees in
1812. It was a lesson for the ages in
supply chain management, demonstrating
what can happen when the pace and
scope of frontline operations outrun the
logistical framework supporting them.
Oil and gas companies certainly can
relate to Napoleon's dilemma. Horizontal
rigs are drilling farther and faster, achieving
daily penetration rates of a mile or more.
Fracturing fleets move just as quickly,
with even high-intensity stimulation designs placing treatments at the clip of
one stage every hour.
Logistics, truly, are half the battle in
tight oil and shale gas plays, and safely
getting equipment and materials to location
on time to keep up with pad operations
that are moving faster and consuming
more is the stuff that keeps logistics managers awake at night. No one wants to
find himself waving a white flag because
field operations overwhelmed the supply
lines that were supposed to be backing
them up.
"Pad sites can be a logistical nightmare," says Todd Poulson, president of
Golden, Co.-based Integrated Petroleum
Technology, an independent drilling, completion and reservoir consulting firm.
"We see issues every day with logistics
trying to keep up with wellsite operations.
The last thing an operator wants to see is
a drilling rig or frac spread sitting idle,
waiting for pipe or proppant. While operations cost a lot of money, waiting
costs more."
The numbers tell the story. In the
Permian Basin, for example, Rystad Energy estimates the lateral lengths of wells
drilled in the first quarter of 2017 were
1,600 feet (22 percent) longer, on average,
than wells drilled in first-quarter 2014.
Yet, the U.S. Energy Information Administration forecasts that new Delaware
Basin horizontals will take five fewer
rig days to drill in 2018 than they did in

2014, while Midland Basin wells are expected to slice two days off 2014's
average drill times.
Looking at well completions, the average number of frac stages effectively
has doubled since 2014, and Rystad Energy calculates the amount of proppant
pumped per Permian horizontal well has
jumped from 6.3 million to 14.5 million
pounds (with a corresponding increase
in proppant intensity to 1,900 pounds
per lateral foot while fluid intensity has
reached 52 barrels per lateral foot) over
the past three years.
EIA says proppant and fluid volumes
will dial up again in 2018, estimating
that each Midland Basin well completed
will consume 200,000 more pounds of
proppant than those completed in 2017,
while Delaware Basin wells will pump
500,000 more gallons of fluid compared
with wells completed this year.
So how are operators managing to
keep the logistics network connected and
in sync? Depending on the company,
Poulson says the preferred approach to
"feeding the beast" ranges from outsourcing 100 percent of logistics to third-party
specialists to assuming primary responsibility for virtually all well site logistics,
including self-sourcing proppants and
chemicals.
"Every operator has his own strategy
for logistics, but it can be a short trip
from hero to zero if something fails to
show up when it is supposed to," he com-

ments. "There is a lot of pressure on the
supply chain."
Juggling Act
The first stop on the oil and gas
logistics train is the first step in the value
creation process: drilling. Ed Pilcher,
drilling superintendent at Integrated Petroleum Technology, says the trick is in
getting services and materials to site on
time, but without overlapping. That is
especially true in the Niobrara/Codell in
the Denver-Julesburg Basin, where smallfootprint pads are encircled by sound
walls, light barriers and other measures
to minimize disturbances.
"Along the Front Range in Colorado,
a pad with 24 wells may be four acres
total, whereas in the vertical drilling days,
the surface area needed to drill 24 wells
would have been 10-12 times that," he
relates. "It is a juggling act. Services
must be lined up so that everything is orchestrated to show up when needed without having one operation interfere with
another. Everyone has to get in and out
on time so you don't cause traffic problems
or incur standby charges."
Moving north to the Powder River
Basin in Wyoming, logistical challenges
during drilling are less about confinedspace choreography and more about longdistance routing. "The population is sparse,
unlike along the Front Range," Pilcher
observes. "But well sites usually are
remote and distant, which means it takes

Real-time completion analysis for quality assurance and quality control is key to maximizing productivity and recovery rates in tight oil and shale gas plays. Using pressure
measurements as the primary input data, real-time analysis allows completion engineering to be optimized on site during treatment to improve stimulation effectiveness all
along the lateral.

NOVEMBER 2017 57

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