While refracturing has never really gone mainstream, the technique is seeing higher adoption as drilling technology improves, aging oilfields erode output, and companies try to do more with less. According to a report published in the Journal of Petroleum Technology, new research from the Eagle Ford Shale in south Texas shows that refractured wells using liners are even capable of outperforming new wells despite the latter benefiting from more modern completion designs.

JPT also estimates that North Dakota’s Bakken Shale straddles some 400 openhole wells capable of generating an excess of $2 billion if refractured. Mind you, that estimate is derived from oil prices at $60/bbl vs. this year’s average oil price of almost $90/bbl. According to Garrett Fowler, chief operating officer for ResFrac, a refrac can be up to 40% cheaper than a new well and double or triple oil flows from aging wells.

How Refracs Work

Fowler says the most common re-frac method involves placing a steel liner inside the original well bore and then blasting holes through the steel casing to access the reservoir. The process typically uses half as much steel and frac sand than a new well

Refrac makes a lot of sense in the current inflationary environment. Back in April, Texas shale producer Callon Petroleum Company (NYSE: CPE) revealed that frac sand, drill pipe and labor costs have increased drilling and well-completion service costs ~20% Y/Y. Callon and Hess Corp. (NYSE: HES), both of which drill in North Dakota's Bakken shale, have been forced to hike capital spending budgets over the costs with Callon adding $75 million to its original budget while Hess added $200 million to its spending,

"Techniques like re-fracturing will allow the industry to continue to harvest the oil and gas out of these reservoirs," said Stephen Ingram, a regional vice president at hydraulic fracturing firm Halliburton Company (NYSE: HAL).

Another key benefit: re-fracs do not require additional state permits or new negotiations with landowners. They are also less disruptive to the environment because well sites already have road access.

"Considering inflation, supply chain issues, and rising wages, now is a great time for operators to start looking at wells for re-frac opportunities," Matt Johnson, CEO of energy consultancy Primary Vision Network, has told Reuters.

Refracs have also demonstrated higher recovery rates: in URTeC 3724057, Roberta Barba, a longtime completions consultant and CEO of Houston-based Integrated Energy Services, et al. share a case study from the Eagle Ford Shale in south Texas involving five refractured wells. The refractured wells had a combined average post-refrac EUR of 13.2% compared to an initial EUR of 7.4% average by seven new infill wells with modern completion designs.

Robert Barba, a longtime completions consultant and CEO of Houston-based Integrated Energy Services (IES).Estimated ultimate recovery (EUR) refers to potential production expected from an oil well or deposit and is made up of three components: proven reserves; probable reserves; and possible reserves.

The Authors of the paper say that despite the presumed advantages of a modern completion, refracs can increase stimulated reservoir volume “beyond what is achievable in a new completion”. This is attributed to the fact that as the reservoir depletes and pore pressure drops, fractures from a refrac tend to grow into a new direction and tap previously inaccessible portions of rock.