When stimulating oil wells in the ultradeep Lower Tertiary play, “It is impossible to do too much contingency planning.”
Those words rank high in a new study by Shell that shows how it has borrowed a page from the unconventional revolution to create “massive hydraulic fractures” in some of the deepest wells ever drilled in the Gulf of Mexico.
Only a handful of operators can claim to have any experience in this area, but with more looking to follow suit the profile of US Gulf production may soon look a lot different.
A separate study by Enverus Intelligence Research highlights that since 2016, at least 27 multistage hydraulically fractured wells have been completed in the Lower Tertiary, also called the Paleogene.
That accounts for about half of all wells producing from the low-permeability trend defined by interbedded sandstones and shales that in the central US Gulf are found 5 to 6 miles below sea level.
Enverus forecasts that as the share of fractured wells rises, Lower Tertiary production will more than double from 270,000 B/D in 2023 to 750,000 B/D by 2028. The market intelligence firm predicts such a surge will offset much of the anticipated declines from older Gulf projects and stabilize the region’s output at nearly 2 million B/D throughout the decade.
The trailblazers are led by Chevron with 14 fractured wells at its Jack/St. Malo project followed by Shell with nine at the Great White unit and the Stones field, which at a water depth of 9,500 ft, is host to the world’s deepest production facility. The elite group is rounded out by US independent LLOG, which has three high-intensity fractured wells in the Buckskin field, and ExxonMobil with one in its Julia development.
“Over the past decade the belief was that much of the Lower Tertiary would be subcommercial because many of the discoveries were around 5 to 15 md, which in the offshore context is considered super tight,” Marvin Ma, an analyst at Enverus, said. “But based on the experiences we’re seeing from Chevron and Shell, I think operators are starting to realize that it is possible to develop these projects commercially.”
Indeed, the numbers shared so far are hard to ignore.
Early production rates reported from some of the newest Lower Tertiary fractured wells have ranged between 15,000 and 22,000 B/D.
And while poor results have been seen, Enverus believes the estimated ultimate recoveries (EURs) of many fractured wells ranges from 18–73% above the group with traditional completions.
