ConocoPhillips hasn't escaped the financial pressures from slack commodity prices, but the slowdown has proved to be an opportune time to continue improving individual wells in regions across its onshore unconventional fields in the Lower 48, a plan that is going to provide a good defense against lower prices in the future, a top executive said Monday.
Greg Leveille, who manages the Unconventional Reservoirs Technology Program for the largest independent in the country, said ConocoPhillips is well aware of the dangers affecting the entire oil and gas industry. But the turnaround, whenever that is, will come, he said.
"We all should be a bit hopeful," Leveille said during his keynote speech at Hart Energy's sixth annual DUG Eagle Ford Conference in San Antonio. “There are a lot of very positive things going on in the Eagle Ford and in unconventional reservoirs in the United States in general."
For the Houston-based independent, the Eagle Ford holds particular appeal. Initial development began in South Texas, and has moved sharply east and north since then. ConocoPhillips now is working development that extends north of Houston, an area known as the Upper Eagle Ford or Eaglebine.
Keeping a focus on the Eagle Ford is an easy choice, Leveille said.
"The fact that it is in Texas is an enormous advantage," he said. "There's no place like Texas to be producing oil and gas...It's in Texans' blood." State regulators likewise have been keen to smooth the road for operators, enacting fit-for-purpose regulations. A pro-industry environment provides a compelling reason to improve drilling and completions, add efficiencies and use enhanced technology.
Reworking wells "are self-help activities that we as an industry can pursue to make it through this time of low prices...We are getting far more production out of our wells than we were just a few years back."
ConocoPhillips is experimenting far beyond the Eagle Ford in the onshore Lower 48 where it has 13 million net acres, much of it held by production. The Lower 48 business runs from the South Texas, into the Midcontinent, across the Rocky Mountains and into the San Juan Basin. The big focus today is in Texas -- the Eagle Ford and Permian Basin, as well as the Bakken Shale and the deepwater Gulf of Mexico.
In the onshore, experimenting with stacking/staggering drilling locations, increasing the number of perforation clusters and amount of proppant, all are on the to-do list. With costs down and production higher, the company now is "pursuing even more aggressive completions," Leveille said.
"The buzzwords are 'enhanced completion' and aggressive completion designs. We are getting far more production per well and are finding ways to take that production at a price that is equivalent of what we paid in the past, or in some cases, it's actually lower. We are bringing down the cost and bringing up productivity...The bottom line is, we are able to drill wells at a much lower cost, much more quickly and more efficiently."
Improving wells at a lower cost are making the producer "resilient to periods of low prices." And technology advancements haven't peaked, nor will they. Technological progress made to date and "likely to be made in the next five years" could offer even more advantages to improve costs.
"We are dialing that type of advancement into the future. If we can do that, we think for ConocoPhillips, even if oil prices do not rise, that we can have a very vibrant industry, and a company that can make a good profit in a difficult environment."