The U.S. oil and gas industry is seeing a renewed interest in refracturing (refracs), a process that re-stimulates existing wells to boost productivity. This is especially true as Tier 1 drilling locations become harder to find. Refracs aren’t new, but recent technological advancements and compelling economics are making them a vital part of operators’ strategies.
Why refracs are gaining momentum
Although refracs currently account for just 1–2% of completions, their strategic value is rising—especially in mature basins where prime acreage is limited. This has spurred ongoing innovation in refrac techniques.
Companies like BKV and Nine Energy are leading the charge. Nine Energy, in collaboration with NewGen Systems, introduced a 15,000 psi liner hanger that eliminates leak paths and enables higher-pressure fracs, boosting productivity. This technology can even salvage wells with damaged casing that might otherwise be abandoned.
BKV targets early wells with widely spaced fractures and smaller frac volumes, ideal for refracs. Their hybrid system merges bullhead and liner refrac methods, achieving results similar to full wellbore relining but at significantly lower cost.
Shale operators are increasingly recognizing refracs as a vital tool for sustaining and growing production. With hundreds already completed and more planned, the trend reflects growing confidence in refrac performance. Enhanced recovery and reduced decline rates are driving broader adoption, signaling a resurgence of interest across the sector. Exhibit 1 lists key value drivers for refracs today.
Exhibit 1. Value drivers for refracturing in unconventional oil and gas wells in North America.
A look at historical realities
Despite this renewed optimism, it’s important to remember that refrac adoption has historically fallen short of industry expectations. For example, in 2015, expected refrac activity in U.S. horizontal wells was around 4,700, but the actual number was closer to 296.
Why this historical gap? ADI Analytics has identified several key factors limiting widespread refrac adoption, including:
- Mixed performance in early trials.
- The critical impact of basin and well type on efficacy.
- The abundance of new well drilling locations in highly active plays.
- The inherent complexity and uncertainty of well selection.
Furthermore, falling new well costs sometimes led operators to prefer new drills over refracturing. ADI’s market and technology assessments have helped clients navigate these complexities by providing data-driven insights into well selection, performance variations, and cost-benefit analyses across different plays.
Refracturing 101
Refracturing is the process of re-stimulating an oil well that has already been hydraulically fractured to increase its productivity. It’s especially appealing in a low oil and gas price environment because it can be a low-cost alternative to drilling new wells and can extend a well’s life beyond its typical 15-20 year production life. While the technology is still evolving, there’s a lot of interest.
Key drivers for the growing interest in refracs include depressed commodity prices, technological improvements, and aging wells. Low oil and gas prices drive interest as refracs offer an alternative for operators to reduce capital expenditure while maintaining or increasing production. Service companies have been aggressively promoting refracs.
Improvements in drilling and completion techniques, such as longer laterals, more proppant, and increasing stages, also contribute. These advancements can lead to improved production when applied to refracturing existing wells. Additionally, as thousands of unconventional wells drilled in recent years begin to age and decline in production, refracturing offers a way to rejuvenate them by creating new fractures or replacing degraded proppant, thereby increasing overall hydrocarbon recovery rates from shales. Many older wells were poorly fractured, leaving behind bypassed reserves as 30-40% of clusters in the first frac job were not producing. Early production often leads to nearly two-thirds of fractures losing conductivity and becoming shut off from the wellbore, needing re-stimulation.
Historically, refracturing has been performed primarily on vertical, conventional oil and gas wells, with technologies like soluble ball sealers and cross-linked fluid systems evolving over decades. However, horizontal wells present new challenges due to their greater length and larger pay zones, requiring more expensive and complex treatments.
There are six main methods for refracturing a well: diversion, coiled tubing, mechanical isolation, cemented squeezes, bull-head, and composite plug. Of these, diversion, coiled tubing, and mechanical isolation are the most widely used. ADI Analytics’ technology assessments delve into the intricacies of each approach.
- Diverting agents involve pumping chemicals to plug fractures or perforations and redirect fluid.
- Coiled tubing uses downhole packers to selectively fracture multiple zones.
- Mechanical isolation uses drillable frac plugs to isolate zones during plug-and-perf operations.
ADI’s analysis shows that while each method has unique benefits and trade-offs, diversion is generally viewed most favorably by operators due to its lower cost and continuous pumping capability. However, it comes with less control and higher uncertainty. Mechanical isolation, while offering accuracy and control, is often considered expensive and uneconomical.
The cost to refrac a well is generally lower than the cost of drilling and completing a new well. This cost can vary significantly based on factors like the size of the treatment (refracs are often smaller than new well treatments, using less proppant), the use of continuous pumping avoiding iterations between wireline and pumping to reduce cycle time, and the need for new materials, like diverters, based on the chosen refracturing method which can raise costs. However, workover and coiled tubing rigs can impose new costs.
Strategic implications
The resurgence of refracs has several strategic implications for the industry.
First, refracs are a crucial tool to address declining Tier 1 acreage coverage. As new drilling opportunities diminish in mature basins, refracs offer a way to extract more value from existing assets. BKV, for instance, has over 15 years of refrac inventory in the Barnett, with approximately 2,100 refrac locations identified. ADI’s market assessments help clients identify these opportunities and prioritize refrac candidates, particularly where original wells had widely spaced fractures. ADI Analytics closely tracks activity in key basins such as the Eagle Ford, Permian, and Barnett, which are particularly well-suited for refracturing and will serve as early indicators of increased adoption.
Second, refracs have the potential to significantly increase recovery rates from shale reservoirs. Initial frac designs often left substantial bypassed reserves. Refracturing can access these untouched zones and dramatically improve hydrocarbon recovery, conceptually increasing recovery rates from shale plays. ConocoPhillips, for example, reports a 60% uplift in estimated ultimate recovery (EUR) from their refrac program at 60% of the development cost of a new well.
Third, there are clear opportunities for oilfield service (OFS) players. Companies offering advanced refrac technologies, like Nine Energy’s new 15,000 psi liner hanger, stand to benefit as operators seek to maximize the efficiency and effectiveness of re-stimulation treatments. Service companies have been aggressively promoting refracs. ADI’s technology assessments can help OFS players position their offerings to meet evolving market demands and overcome existing limitations, such as concerns over the reliability of expandable patches.
Finally, the growing importance of technology and innovation in shale is undeniable. The shift from a historical “pump and pray” model to analytics- and models-driven approaches is critical for successful refracs. ADI’s research highlights that refracs will significantly benefit from this approach, which involves careful basin and well selection. This, coupled with larger unconventional play drilling efforts, will enhance effectiveness and drive adoption. Continued research into new frac fluids, diverting agents, and downhole tools will be key to unlocking the full potential of refracturing and ensuring its long-term viability in unconventional plays. ADI Analytics helps clients understand these technological advancements and their impact on performance and adoption.
– Uday Turaga
About ADI Analytics
ADI is a prestigious, boutique consulting firm specializing in oil and gas, energy, and chemicals since 2009. We bring deep expertise in a broad range of markets where we support Fortune 500, mid-sized and early-stage companies, and investors with consulting services, research reports, and data and analytics, with the goal of delivering actionable outcomes to help our clients achieve tangible results.
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