Many operators continue with drilling a minimum number of wells to maintain lease ownership, amongst other reasons. As an adoptive strategy to such market behavior, many operators turned to drilled but uncompleted wells (DUCs) since the downturn in 2014. The graph below shows DUCs in the Permian Basin since Q1 2014 and projected to Q4 2020, given the oil price stays under $30/bbl for the Q2 2020.
The U.S. shale sector faces an unprecedented impact from the sudden decrease in global demand due to COVID-19. Unlike previous downturns, WTI priced $0 at noon on April 20th, 2020, and by that afternoon, it was priced at negative $35/bbl, truly creating an unprecedented time.
By Q4 2020, only one out of five wells drilled will be completed. Rystad forecasts a 10% increase in DUCs contributed by publicly traded companies and a 16% increase by private operators.
The first operation after DUCs are drilled, cemented, and left for months is toe-injection, which is done via a toe-valve or tubing-conveyed perforation. A toe-valve must be reliable as it is activated after months of being dormant in a well under high pressure, high temperature and reservoir fluid condition. NOV’s Burst Port System™ (BPS™) offers a reliable application for toe initiation for DUCs, and has proven its reliability after being left in multiple wells for more than 18 months. The BPS was pressure tested, activated and required flow rate was established for the subsequent plug and perf operation. Compared to other applications, such as a wet shoe sub or a traditional toe sleeve, the BPS offers higher reliability due to no moving parts, higher flow area, and a proven track record of opening months after the initial installation.
An optimized practice suggests that several BPS subs be used at the toe for not only toe-injection, but also toe stimulation. This type of practice, which has found its place in many shale plays, enables the successful stimulation of several feet of horizontal section that would have otherwise been wasted.