American Oil and Gas Reporter - April 2022 - 46

SpecialReport: Eagle Ford Activity
wells from asymmetric fracs draining
only 60% of reserves by refracturing
the primary well on the pad in the zipper
sequence when the infills are ready to
be refractured.
Existing perforations can be isolated
with diverters, cemented smaller-ID casing
or expandable liners. While cemented liners
are a major improvement over diverter
pump-and-pray treatments, expandables
should be more efficient than cemented
liners with more space available inside the
liner to allow for higher pump rates.
" This increased rate can facilitate
one to two additional clusters per stage
and fewer frac stages overall, " Barba
remarks. " They can also accommodate
the larger perforating guns that can deliver
the recommended 0.45-0.50 inch
single topside perf per cluster architecture
and should have less perf erosion
from the essentially metal-on-metal cementless
contact between the inner and
outer strings. "
The geological risk is minimal compared
with a new well, Barba continues,
and condensate yield uncertainty is low
in areas where yields are highly variable
in the Eagle Ford volatile oil window.
Expected oil and gas recoveries are derisked
and recovery factors using close
cluster spacings and best practices are
known, with oil window recoveries in
the 14% range and 35% (of the Mcf
equivalent) in the condensate window.
" Refracs also place less pressure on
the supply chain and are a much more
sustainable process for ESG goals and
capital allocation, " Barba goes on. " The
carbon footprint of a refrac versus drilling
and completing a new well is significantly
less. "
If the refrac process is economically
successful on a consistent basis, an added
potential bonus is that offset refrac candidates
theoretically can be booked as P1
proved, undeveloped reserves and valued
on a NPV20 basis according to multiple
reserve evaluation groups, Barba notes.
" If that process gains traction, refracs
have the potential to add significant asset
value over and above the significant
direct value add they already provide. If
this process is approved in a specific
field by independent reserve evaluation
groups, it is conceivable that refrac
activity may explode exponentially in
that field and in analog fields in the area.
This last feature is truly a 'money for
nothing' scenario, as the 1985 Dire Straits
song goes, " he concludes.
Pure Value Add
While consistently evaluating new and
existing technologies, SM Energy Company
is accelerating Austin Chalk drilling
on a 13-year inventory in Webb and Dimmit
counties as geoscientists and engineers
work to optimize completions.
The Austin Chalk program is a pure
value add for the Denver-based company,
says President and CEO Herb Vogel.
" To date, we have delineated a large
portion of our 155,000-acre position, we
are partway through testing development
spacing and we are just getting started
with completion design optimization, "
he said during the company's 2021 earnings
call in late February.
Acreage also is prospective of the
Eagle Ford, but with a lower break-even
price than in the company's lucrative
Midland Basin assets, the Austin Chalk
is the star of the show right now, he says.
SM's Austin Chalk program has an
average PV10 greater than $10 million
per well assuming $60/bbl oil and $3/Mcf
gas prices, Vogel says. Payout per well is
nine months. The company certainly will
benefit from proximity to robust markets
on the Gulf Coast, he adds.
The completions team continues to
research optimal completion design to
achieve higher production, EURs and
NPVs per well, says Mary Ellen Lutey,
senior vice president of exploration, development
and EHS.
" We have successfully tested different
landing zones in the Austin Chalk and
will continue to optimize well configurations
across the asset, " she remarks. " It
is really exciting that we have been able
to successfully develop the Austin Chalk
over existing Eagle Ford wells. "
SM expresses plans for 37 new drills
this year with about 15% of those in the
Eagle Ford after drilling 26 total wells
last year. Contiguous acreage allows for
longer laterals, which should average
11,000 feet in 2022, Lutey says. The
longest Austin Chalk lateral to date is
14,174 feet on the San Ambrosia F (SA28)
State 1179H well. The Briscoe R (SA
18) 812H well is SM's longest in the
Eagle Ford at 15,375 feet.
SM's geoscience and engineering
teams are using data from cores, openhole
logs and seismic while incorporating
geomechanical modeling, geochemical
fingerprinting and microseismic monitoring
to help identify landings, Lutey
says.
SM Energy's Catarina, Tx., field office employs 79 people in the heart of the Eagle Ford
and Austin Chalk play. The company is accelerating its Austin Chalk development program
on its 155,000-acre position in Webb and Dimmit counties, where its chalk wells offer ninemonth
economic payouts based on $60/bbl WTI and $3/MMBtu Henry Hub prices.
46 THE AMERICAN OIL & GAS REPORTER
" We continually refine our models
as we get more data to optimize drilling
and completion plans, which sets SM
apart as having some of the best wells
in South Texas and the Permian Basin, "
she concludes.
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American Oil and Gas Reporter - April 2022

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