Chevron will triple-frac half of Permian wells by 2025 in order to reduce costs and time

Chevron's triple frac reduces well completion times by 25%

The technique reduces the cost per well by 12 %

Triple-frac needs 60% more water per day and sand

By Sheila Dang

HOUSTON, 9 April - U.S. Oil Major Chevron plans on increasing the use of a method that allows it fracture subterranean rocks in three wells simultaneously in the Permian Basin, according to the company. This is in an attempt to reduce the time and costs of oil production.

Chevron, the second largest U.S. producer of oil, is expanding the triple-frac technique as it expects to increase production in the Permian oilfield - the largest U.S. field - even though the company has begun to reduce spending.

The United States' shale revolution has been driven by technology. In the late 2000s, hydraulic fracking - which involves drilling and injecting water and sand into wells to fracture rock in order to extract oil and natural gas - became widespread. This made fossil fuels previously held in shale rocks commercially viable.

Chevron started using triple-frac in the Permian for the first time last March. Jeff Newhook said in an interview that the company will use triple-frac on 50-60% of its wells this year. This is up from 20 percent last year.

Chevron has never reported the extent to which it plans to deploy this technique in new wells.

Newhook stated that by fracking three wells simultaneously, Chevron can complete each well in 25 percent less time and have them ready for production in 12 percent less cost per well.

He said, "What we really get out of it is a more effective use of capital as well as a higher return on investment."

Oil producers are increasingly interested in fracking multiple wells simultaneously. However, fracking more than two at a go is still a niche technique, according to Thomas Parambil Jacob. Senior vice president of Rystad energy.

Hugh Daigle is an associate professor at the University of Texas at Austin’s Department of Petroleum and Geosystems Engineering. He said that companies who can finish wells faster have an edge over their competitors. Over the years, shale producers have innovated by learning how to bend drill bit horizontally and to drill further distances. Recently, artificial intelligence has been added to drill data processing in real-time for better results.

Newhook explained that triple-fracking uses the same amount of water and sand as fracking a single well, but it does so more quickly. This means Chevron requires 60% more water per day and sand when using this technique.

This creates a challenge in terms of logistics, as more than 10 trucks arrive per hour to bring sand to a well pad.

Newhook stated that the company had also started fracking in Colorado's Denver-Julesberg Basin, a second shale formation.

He added that Chevron's triple-fracking equipment is mainly electric, which uses 50% more energy per day than just fracking a single well.

Daigle added that triple-frac also requires greater capital expenditure upfront in order to drill enough wells in advance.

Mike Wirth, the CEO of Chevron, has previously stated that they aim to increase production by 10% this year.

Chevron anticipates that Permian production will slow down after this year as it focuses more on free cash flow. Sheila Dang, Houston; Simon Webb, Nia Williams and Nia Williams edited the article.

(source: Reuters)