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Multilaterals take the stage in shale plays

Multilateral well completions, long used to optimise deep-water production, are gaining a foothold in the shale plays of North America, writes Rick von Flatern

Offshore, numerous multilateral wells are drilled horizontally through production zones from a single vertical wellbore. Like outsized perforations, they form tunnels through which oil and gas reach the main well and are carried to the surface.

Drilling and completing multilaterals enhances production by maximising the formation area exposed to the wellbore.

Typically, drilling, casing and cementing a single vertical with laterals is less costly than spudding and completing numerous horizontal wells. It requires fewer wellheads and, onshore, fewer drilling pads, roads and pipelines.

Laterals are connected to the main wellbore by six major junction types, as described by industry consortium Technical Advancement of Multilaterals (TAML).

The most basic junctions are open-hole completions branching from the vertical well below an open-hole packer. The most sophisticated systems are constructed with casing in the vertical well and, in the lateral, a liner capable of providing hydraulic and pressure isolation at the junction.

To use multilaterals in shale wells, completions must include a junction that ensures such isolation and sufficient flow area to accommodate the pressures and volumes of fluid and proppant that are pumped downhole during hydraulic fracturing operations.

Such systems have been available for years, and placing them in shale formations offers no particular technological challenges, says Mark Knebel, manager of the Annular Isolation & Specialty Products line at BHGE.

However, shale operators, accustomed to drilling, completing, stimulating and producing many horizontal wells, have resisted using multilaterals.

“I think that the main issue, especially back in the boom, was that most of the operators had a procedure that was pretty cookie-cutter for the field they were in,” Knebel says.

“Once they got it going, they just went after it. While multilaterals is not a difficult technology, it does change that method of ‘drill this well in 30 days and then the next one and do it again and again'.”

High oil prices allowed operators to profit by drilling a large number of wells to maintain production in the face of rapid decline rates that characterise shale production. But that era has passed. Operators can no longer afford the operational inefficiencies engendered by such strategies, says Mihai Marcu, BHGE’s global business development manager for Multilaterals.

“I can say that we have seen a lot of interest from operators who are now forced to look into more ways to become efficient by reducing costs,” Marcu says. “Multilaterals are an obvious way to achieve that.”

Although the industry has until recently generally resisted using them in unconventional wells, BHGE reports that it has been deploying multilateral systems since 2006 and has developed numerous systems suitable for use in shale operations.

“We don’t see any particular challenges to installing multilaterals in shale formations,” says Marcu. “We have been doing this for a number of years and have a number of systems that are absolutely suitable to the shales.”

The company typically deploys a system that supports TAML level 3 and 4 junctions. BHGE’s Stim-HOOK system provides selective re-entry access to the laterals and uses hanger diverters — metal tubes with seals — and a liner top packer to connect liners set in the lateral to the main wellbore and provide hydraulic and pressure isolation.

With the main wellbore and the lateral isolated from the rest of the well, the well may be treated as a typical single horizontal well and may be hydraulically fractured using traditional multistage fracturing methods.

The internal diameters of all BHGE components are designed to accommodate hydraulic fracture volumes and equipment such as frack balls and frack plugs used to isolate each stage. Because the system is rated to a working pressure differential of 10,000 psi at the junction, it is compatible with that of fracture equipment and therefore imposes no pressure limitations.

After stimulating a lateral, operators move to the next lateral and repeat the procedure, typically beginning with the lowest interval. In the absence of significant pressure differences between intervals, operators may commingle production from all laterals.

When differing pressures or other parameters preclude commingling, they may install a TAML level 5 junction after the laterals have been fractured. This allows each lateral to be produced individually.

To reduce the time required to recover its investment in a Permian basin field, Occidental Petroleum (Oxy) followed a traditional shale well development model of drilling, completing and stimulating all laterals before producing them simultaneously.

While a proven method, under some circumstances commingling can contain risks and added costs. Junction integrity may become degraded by high draw-down pressures, and increased production from multiple zones may require operators to invest in additional infrastructure.

To address such concerns and to optimise production from each well, Oxy completed, stimulated and produced each lateral individually until the natural energy of the producing zone was depleted.

The company then temporarily isolated the lateral and moved up-hole to drill, complete, stimulate and produce the next production interval. The operator repeated this sequence until the energy of each lateral was depleted. They then placed the well on artificial lift.

Referred to as single location sequenced laterals (SL2), Oxy says it believes the method could reduce secondary bench break-even price of oil in the Permian basin by about $5.00 per barrel. The operator is reported to have saved between $500,000 and $1 million in lifting costs and was able to produce all the laterals in the well using existing infrastructure.

In addition, the sequential method reduced the well’s decline rate because production rates were renewed each time a fully energized lateral was brought on line.

The company realised further efficiencies by installing BHGE’s system in each of the Oxy Permian basin laterals, including a TAML level 4 junction and lateral liner, in a single trip. The liner and junction were run on a production string instead of drill pipe. The same work string was used for cementing and fracturing operations.

Marcu says BHGE is continuing to develop more efficient deployment methods for its multilateral products.

“Our focus in the last year-and-a-half has been to develop systems that require fewer trips and reduce risk,” he says. One such product, the INTEGRO single trip multilateral multistage fracturing system, was used on Oxy’s SL2.

Other operators, including BP and ConocoPhillips, have expressed interest in deploying multilateral completions in the shale and tight sand plays.

ConocoPhillips chief executive Ryan Lance told attendees at the 2017 CeraWeek conference in Houston that multilateral wells had the potential to be the next technological step in onshore tight oil plays, and that his company had engaged five different service companies to design multilateral systems.

The end of the “fast and furious” era, as Marcu describes it, is encouraging North American shale operators to embrace innovations that put efficiency at the forefront. Multilateral completions would seem a logical step in that direction.