Where’s the Re-Fracking Craze?

A friend of mine in Carroll County, OH was fortunate enough to have six wells drilled on his property by Chesapeake. When I talked to him just a few short years later, he was lamenting how his checks had dried up and he was now receiving next to nothing. I explained the decline curve to him, which was not well received, but assured him that within a decade someone would surely come back and re-frack the wells. That was twelve years ago, and there has been no mention of such to date (other than by me). I’m wondering why re-fracking has not become more prevalent? Has the technology not been perfected yet? Or is it for other reasons? Let’s investigate further and see if we can make a determination.

First, however, let’s briefly discuss the decline curve. I intend on doing a complete article on the subject soon, but for now let’s just talk about the decline curve of non-conventional (shale) wells.

The fact is, production rates for any well will decline over time and royalty checks will diminish accordingly, unless offset by rising oil or gas prices. Within 24 months of production, the well may be producing at only one tenth or its original output. Decline curves apply to all wells, either conventional or shale, but shale wells definitely decline much faster and typically have a much shorter lifetime. A report I read in Geology.com showed a typical gas well (typical in this case being production of 2 million cu. ft./day, gas prices at $4/Mcf, and a royalty rate of 12.5 percent) which has a steep, but typical decline curve. By year six, this particular example had declined by an astonishing 94%, making it no longer economically effective to run. Operating costs will be greater than production income by this time and the well will be capped and abandoned.

When a new well is drilled it penetrates a rock unit with abundant gas, sometimes under pressure. These new wells can yield at a very high rate, but over time - as gas escapes from the well - the pressure in the formation goes down. The result is a well with a lower rate of yield. That’s just the way the cookie crumbles, so to speak.

Now, as to re-fracking. Re-fracking is the practice of returning to a previously fracked well to capitalize on newer, more effective extraction technologies. Others describe it as an oil company practice of returning to older shale-oil and shale-gas wells, fracked in the recent past, but which are no longer in production. The hope is that technology will have improved enough since they were drilled to revisit these wells and restore them to production.

In its most basic form, re-fracking is remarkably similar to the original fracking process, shooting a mixture of mud, composed of sand, chemicals, and water into an underperforming well to boost production. Although companies have been using this function to some degree for decades, I’d venture to say the technology used here has yet to be perfected. As in any unconventional well, the process is designed to form cracks in the substrate and hold the cracks open once they develop. The breaks in the rock and soil allow the exploration company to extract hydrocarbons from the formation by causing the oil to flow more rapidly, boosting the production amount of the well.

Re-fracking has been used more commonly in vertical drilling processes. E&P companies are now employing this long-used technique to allow a company to access deposits which were previously useless.

To that end, companies are now re-fracking some wells sunk as little as three years ago. One technique in the re-fracking process involves sealing up larger cracks in the well's shale with small plastic balls in lieu of sand, so that new proppant may find its way into tighter cracks with the help of a higher pressure wellbore.

Re-fracking is beginning to occur in some of the biggest shale plays in America. In the Bakken Shale, for example, organizations are revisiting some wells drilled between 2008 and 2010, due to improved hydraulic fracturing technologies. Although it has gotten next-to-zero publicity, the North Dakota Pipeline Authority reports that companies have re-fractured more than 140 wells in the Bakken as of mid-2017. Almost all showed an increase in production as a result. Similarly, companies are re-fracking in other well-established, large shale formations in the U.S. such as Eagle Ford and Barnett, both in Texas, but to little fan-fare.

Shale wells generally cost a minimum of $6.5M to drill and complete, with the price difference attributed primarily to the depth of the well and the length of the lateral(s). Those well which have good geology but have a rather low recovery or production rate, may indeed be good candidates for re-fracking. Also, wells that were once prolific can now be restimulated using re-fracking techniques. It can allow new technology to extend the life of existing wells, and E&P companies already have found some success. Additionally, this process limits the amount of fresh ground that must be opened up for well pads and oilfield or frack pits, and associated necessities.

Without exception, re-fracking is a much less expensive process than the initial process of drilling and fracking from scratch. The well pad is already established. Separators and associated equipment are already on site. Pipeline access has likely already been established. And there will rarely, if ever, be a shut-in period waiting for gathering or refining infrastructure to be built.

Although we have already established that re-fracking is more environmentally friendly, as is the case with fracking in general, re-fracking is controversial. Environmental critics always feel the need to point out the negatives, and discount any positives associated with fracking. True, it can have the same adverse effects on air, water, and soil in the areas where re-fracking occurs. For example, Methane is an unavoidable byproduct which results from almost any fracking attempt. Admittedly, it escapes into the atmosphere during extraction. Methane is 25 times stronger than carbon dioxide in trapping heat and causing greenhouse effects. Also, the release of this gas may be detrimental to air quality in the vicinity of fracking sites.

One can choose to lament the consequences of fracking, or praise the results which it has on our country, including energy independence. It also has a positive effect on GDP, accounting for almost 8% of the entire Gross Domestic Product. It also employs almost 10.5 million people, who enjoy an average income of about $79,500. That’s almost $50K more than the national average. This world is full of give and take situations, and this is surely one of them. Although I am an industry supporter, I admit the negative impacts of the industry. I am of the opinion that E&P companies should have to operate under the most-strict of guidelines, and that penalties should be gigantic, should they show a driller to be negligent. High rewards often require high penalties, and I am just fine with that.

I hope that one day solar power will be able to sustain the bulk of America’s energy needs, but that day is long off. Solar technology is not even close to being economically or technologically ready to assume that position. I truly hope one day it will be. Wind power has similar issues. The truth is, nothing but nuclear or hydro-electric power has been proven to be both affordable and economic, and, as with every single form of energy production, they have their own blemishes.

Oil and gas will always be a part of America’s economy, even in the distant future. There are just too many examples of how it is indispensable to our country. Literally everything you touch on a daily basis likely was produced using some form of fossil fuels. Natural gas is an incredibly important and cheap fuel source and will likely never be replaced. It not only produces low-emission energy for use in various industries, it also, by means of a cracker plant, is used for all plastic and associated products, including much of your vehicle, (even if it an EV), your cellphone, packing products, and the like.

Those insisting on electrical energy suppliers are oblivious to the fact that they are all, almost without exception, powered through the burning of natural gas. And of huge importance is the fact that traditional farming, as we know it, cannot exist without nitrogen fertilizer. And where does this nitrogen come from? Natural gas. If farmers had to go the organic route, their costs would soar dramatically as would that of the food they produce. If you are ready to deal with deliberately causing massive famine and death worldwide, just try to farm without nitrogen. It literally cannot be done in an economically feasible manner.

Hart Energy states that “no one is sold on the idea yet”, but reports that SilverBow Resources, ConocoPhillips and Devon are among E&Ps seeing positive results from restimulating mature Eagle Ford wells. Fracking operations typically extract only about 10% of the available reserves in the shale, leaving what has been described as “a lot of meat on the bone”.

Re-fracks were widely discussed at the recent URTeC 2024 conference. Most reports mentioned that re-fracks and other redevelopment projects might not be needle-moving growth drivers—but they’re becoming more common for E&Ps levered in maturing plays like the Eagle Ford and Bakken. Interesting to me was that they are specifically mentioning these particular area of exploration. Before the Permian broke wide open, the Bakken and Eagle Ford were generally considered the two best shale plays in America.

High-quality onshore drilling inventory is already scarce across the Lower 48, and it’s even harder to come by in mature plays like the Eagle Ford and Bakken. For operators with existing assets in maturing oil and gas basins, redevelopment should be a key part of their drilling plans going forward, said Ryan Hill, principal analyst at Enverus Intelligence Research. Translation: look for re-fracking efforts to be tested in other unconventional reservoirs soon. I predict that geology will determine some to be more susceptible to re-fracking than others. Every shale play is different; for instance, the Marcellus Shale was recently reported as having commercial quantities of Lithium in their flowback water, a phenomenon that, as of now, seems to be exclusive to that formation.

I, myself, have been particularly interested in the Utica Shale, found mostly throughout Ohio but also less extensively in PA. I was one of the first landmen on site for that particular exploratory effort, and became interested enough to research it and eventually, write and copyright a book concerning it. I have seen no mention of re-fracks in either Utica or Marcellus completions, but they both are plenty mature to have attractive target to re-enter and re-stimulate.

Re-fracking. Coming soon to a community nearby you.