Chemical company offers solution to ‘Frac Hits’

It’s an issue Permian Basin oil and gas operators have been grappling with as they drill wells in tighter and tighter quarters: How to keep hydraulic fracturing of the newer or “child” wells from interfering or damaging the older or “parent” wells or being damaged themselves?

“It’s a dire problem,” Eric Foster, chief executive officer of TenEx Technologies, said in a phone interview. He said that over the next couple of years, domestic oil and gas production will begin to decline “because drillers can’t drill enough wells” to offset the lower productivity of damaged parent wells or the child wells.

“As competitive as the industry is, companies recognize the existential threat this is, especially in the Permian Basin,” he said. “If we don’t come up with a solution, the Permian Basin could lose its place as the top producing region in the world. There’s good acreage that can’t be tapped because of the frac hit problem.”

“The industry is desperate to find better strategies to protect the parent wells and get more production from the child wells,” he said.

Rystad, the energy consulting service, estimates that only 20 percent of the wells drilled in the Permian Basin in the third quarter of last year were parent wells.

Foster’s Philadelphia-based oilfield chemical company is offering a chemical solution, as opposed to a mechanical solution. NoHIT is designed to be pumped as an additive to a parent well’s preload or active loading program.

“Our product involves the injection of a chemical solution that includes aluminum,” Foster said. “Then we inject an activator, which will vary depending on the characteristics of the well. That activator will change the pH of the water in the well and cause the aluminum to react, stripping the hydrogen off the water and generating hydrogen gas.”

That gas pressurizes the depleted rock and increasing associated rock stress, discouraging child well fractures from communicating with the parent well fractures. That not only protects the parent well but encourages the fractures in the child wells to target new reservoirs, Foster said.

To address the problem, some operators inject gas – which can be expensive -- while other companies shut in the well for a period of time to let the reservoir build up pressure, he said. Others preload the well with water.

He described the Permian Basin as “thirsty ground with big wells that take an ocean of water to fill every nook and cranny. I just need enough water that the aluminum will react. I just need a small lake, not an ocean.”

Foster said he believes NoHIT it will improve the capital structure of his customers.

He used the example of a producer who based his reservoir value on density of 100 wells but could only drill 50 because the communication between wells impaired production.

“You’ve reduced your reservoir value 50 percent,” he said. “This is almost a live-or-die problem. If we and others can help restore reservoir value by restoring density, that helps the bottom line.”

There is a cost to his product, he acknowledged. “But when you spent $7 million on a well, how much is it worth to not wreck it?” he said.

The technology has worked well in the lab, and Foster said he is anxious to get it in the ground. It will be used for the first time by the end of February, he said.

The company has been in talks with producers in several producing basins, including in the Niobrara, Eagle Ford and in Calgary, Alberta, but he said it is “strongly focused on the Permian Basin.”

He wants companies “to talk to us about how they would experiment with our product,” and urges collaboration to find solutions.