Improve Operator Benchmarking Using Graded Acreage

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1 Improve Operator Benchmarking Using Graded Acreage Learn how one operator optimized underperforming assets in the Bakken Copyright 2015, Drillinginfo, Inc. All rights reserved. All brand names and trademarks are the properties of their respective companies.

2 OVERVIEW In the current oil price environment, operators face intense pressure to optimize drilling and completion techniques to be as efficient as possible. Operators need to learn from their competitors activities in order to quickly assess best practices and improve their own production methods. Leveraging Drillinginfo, an independent operator in the Bakken identified a top performer and analyzed how the operator drilled and completed wells in order to learn best practices. CHALLENGE Determine the best performing operator within a specific reservoir quality and understand WHY the operator is performing better than peers. SOLUTION The company used DI Analytics Graded Acreage to analyze operator performance. After determining which factors increased a competitor s performance, it changed its methods to improve production. PRODUCTS USED DI Analytics 2

3 With DI Analytics Graded Acreage, the operator could make true apples-to-apples comparisons to quickly determine which operator was outperforming its competitors in a specific grade of acreage. Graded Acreage normalizes for drilling and completion techniques to qualify acreage based on geologic parameters. Acreage is categorized into grades A (best) through J (worst), affording operators insights into predicted productivity within each grade. The ability to visualize and accurately compare operator performance requires understanding of the reservoir quality the operators are drilling in. This assessment is difficult or impossible to find combined in a single product. STEP 1: GRADE BAKKEN ACREAGE The company knew the Bakken had a lot of potential, but also a lot of variation across the play, depending on geologic properties. DI Analytics uses a patented, statistical methodology to predict production in an area based on reservoir quality after normalizing for how operators drill and complete their wells. The grade scale runs from A through J: areas with the highest production potential receive a grade of A, while those with the lowest potential have a J-grade. Each grade appears as a different color on the map. Products Used: DI Analytics: Graded Acreage module With Drillinginfo: Since each play is different, the Drillinginfo team uses advanced modeling unique to each play to identify which geologic parameters have the greatest influence on production. The modeling method for the Bakken uses geologic variables such as porosity, permeability, density, thickness, etc, as well as normalizing for proppant volume, number of stages, The DI Analytics Graded Acreage scale ranges from A (best) to J (worst) 3

4 treatment volume, and azimuth, in order to predict production. The resulting proprietary grading scale is both easy to understand and granular, as the grades are analyzed to a single square mile resolution. Without Drillinginfo: The staff would need to perform a comprehensive subsurface evaluation using hundreds of well logs, completion reports, and production information. Then the company would need to develop complex statistical models to correlate production metrics to geologic parameters, independent from the influence of completion variables. STEP 2: CHECK CREAMING CURVES The company utilized DI Analytics creaming curves to identify a top performing operator. The creaming curves depict how much incremental 12 month cum-oil production is generated from each new well an operator drills. The trajectory of the creaming curve illustrates an operator s learning curve within a play, and inflection points can highlight changes in operational techniques. The creaming curve from a top operator showed a sharp inflection point around an increase in well performance, and the company wanted to understand what factors drove the change. Creaming curve: inflection point around 45th well for top operator (blue) Products Used: DI Analytics: Graded Acreage and Best Practices module 4

5 With Drillinginfo: The creaming curves summarize performance over time so the company could tell at a glance which operators were high performers. The company soon realized that one operator was performing extremely well within E-grade acreage, which is one of the most common grades within the Bakken, covering 2,600+ square miles. By identifying the reasons for the high performance, the company could employ similar techniques to improve its own productivity. Without Drillinginfo: If the company could not isolate reservoir quality, then operator performance is averaged across various grades of reservoir quality, and it is harder to compare results or highlight best performers. STEP 3: COMPARE PRODUCTION CURVES AND COMPLETION TECHNIQUES The company looked at detailed production information for the top operator in E grade acreage. Trend analysis revealed the top competitor produced similarly to others until 2013, at which point the top competitor produced three times more barrels of oil in a peak month compared to other operators. What did this competitor do in 2013 to achieve these results? Further analyses revealed the operator actually decreased its lateral lengths in 2013 compared to prior years, but doubled the number of stages and significantly increased proppant and treatment volumes. Products Used: DI Analytics: Graded Acreage, Productivity With Drillinginfo: The company benchmarked its performance relative to competitors and noticed it produced 5 CS_Graded Acreage-02; 11/24/15

6 Low completion intensity in 2011 and 2012 (yellow and pink dots). Increased proppant and treatment volumes beginning in 2013 (orange) and extending through 2014 (blue dots) about 400 barrels in a peak month compared to the main competitor s 1,200 barrels per day. Because the company knew the reservoir quality was the same, it focused on deeper analysis of completion techniques. This analysis revealed that the competitor utilized shorter lateral lengths but more stages and higher intensity frac jobs to generate better productivity than the company did. Without Drillinginfo: The staff would compare type curves by operator in an area but have difficulty distinguishing between performance differences due to reservoir quality versus operational techniques. 6

7 STEP 4: IMPLEMENT BEST PRACTICES TO IMPROVE PRODUCTION By evaluating acreage and comparing operators with DI Analytics, the company realized that it needed to change completion methods. The company increased proppant volume and the number of stages for higher productivity. Products Used: DI Analytics: Graded Acreage, Productivity With Drillinginfo: The company discovered what factors had the biggest impact on production and changed its methods. DI Analytics will continue to make a difference in the company s productivity for years to come. Without Drillinginfo: Without accurate intelligence, the company would have had a difficult time identifying how to improve operational practices and associated profitability of its Bakken wells. It would fail to maximize the value of its assets. 7

8 CONCLUSION Drillinginfo s assessment of acreage quality in a play provides a unique and important framework to benchmark operator performance and evaluate how drilling and completion factors influence production. The insights graded acreage affords are critical for maximizing asset value. Leverage Drillinginfo s graded acreage to reduce risk and uncertainty about reservoir quality. Speak with one of our experts today to learn more about DI Analytics. PROACTIVE EFFICIENT COMPETITIVE Learn more at By monitoring the market, Drillinginfo continuously delivers innovative oil & gas solutions that enable our customers to sustain a competitive advantage in any environment. Drillinginfo customers constantly perform above the rest because they are able to be more efficient and more proactive than the competition. 8 CS_Graded Acreage-02; 11/24/15