High-pressure water could push drilling revolution
August 24, 2016
Tim Skelton takes a look at a new high-pressure water drilling technique developed in Australia that offers a faster, cheaper and environmentally friendlier alternative to fracking
Water jets have long been used in the mining and quarrying industry to cut through rocks. The oil and gas industry, however, has tended to rely on rotary contact drilling as the go-to technology for accessing the majority of its resources. Yet with the advent of horizontal drilling, hydraulic fracturing and coal seam gas (CBM), the changing demands of unconventionals producers mean the tide may now be turning.
One company in particular has made recent headway in the space. With a licence to use patented “Vertical to Horizontal” high-pressure water jetting technologies, recently established V2H International is confident that it can bring about a step-change in the economics and approach to fracturing and in-seam drilling.
Perhaps unsurprisingly, the nozzle itself was developed for the mining industry at the Australian research centre CRC-Mining, but evolved from a combination of earlier research efforts on two separate continents.
As V2H International CEO Darren Rice explained to InnovOil, the company was created in February 2016 as the result of a merger between Texas-based Zero Radius Laterals (ZRL) and Coal Bed Methane Innovations (CBMI), an Australian joint venture set up by CRC-Mining and BHP Billiton. Both had been developing Tight Radial Drilling Systems independently for the past 15 years, but the joint company formed in February of this year opened a new opportunity for innovation. “The two systems were non-competitive but highly complementary,” Rice says. “What we’ve done is effectively merged the world’s two best radial drilling water jet technologies, and the combined IP is potentially very exciting for the oil and gas industry.”
The technology itself is fairly simple. “We are just using high-pressure water. We have a highly engineered nozzle that rotates at very high speed, and a combination of the high pressure and rotation effectively separates the rock, allowing us to drill (jet) a neat tunnel into the rock formation,” Rice explains.
To be able to cut through the rock efficiently, the water has to be applied at very high pressures. “We can drill up to 15,000 psi,” Rice says. “However, in the sandstones and coals that we typically work on [in Australia] we normally find that we need no more than 10,000 psi.” To reach that level of pressure, V2H is currently using high-pressure pumps from the specialist manufacturer Jetstream, based in Houston, Texas.
Rice is keen to emphasise the disruptive potential of the technology. In Australia alone he points to the many thousands of existing wells that were considered exhausted, but which could potentially be reopened by going down into the vertical hole and then drilling out radially at 120 degrees in different directions, producing more hydrocarbons without increasing the well’s surface footprint. Indeed, the V2H system allows users to drill multiple laterals of over 300 metres in length from one vertical wellbore.
His emphasis hints at the two sides of the market V2H is hoping to tap into – extending and enhancing life and recovery rates at old wells via new laterals, and for drilling new vertical wells. “The quicker you put laterals into a well, the better for the well. Laterals will significantly increase ultimate recovery from any given well in addition to increasing flow rates. It’s a true win-win technology,” he adds.
According to V2H Australia’s website, two systems are available: one dedicated to workovers “for use on shallow oil wells to bypass near wellbore formation damage in sandstone reservoirs,” and a second for completions “for use in degassing low permeability coal.”
Rice also points out that the relative simplicity of the technique, and the reduction in the required equipment needed, should make it much faster and considerably cheaper to drill wells using V2H techniques than using hydraulic fracturing.
The technology also comes with a number of potential environmental benefits, particularly in comparison with standard hydraulic fracturing techniques. For one thing, fracking uses large quantities of sand and chemicals, a need that is reduced – or even completely eliminated – using the water jet.
Moreover, drilling using the new nozzle also uses far less water than comparable techniques. Increased accuracy and well placement means that V2H only requires about 5% of the volumes required by coal seam gas (CBM) wells. “We drill a neat tunnel into the formation very quickly and very accurately,” Rice explains. “In hydraulic fractured wells, say in a typical shale formation, you could be using anywhere from 1.5 million gallons to 6 million gallons [7-27 million litres] of water. With our Radial Drilling System we would typically use only 1,000 gallons [4,500 litres] to drill three laterals. There really is no comparison; it uses such low volumes of water.”
V2H says that in an ideal situation, it would prefer the drill to be operated using only repurposed formation water removed during the dewatering of the well. “The oil and gas industry is very aware of the problems caused from formation damage, which exists in every well in the world,” Rice says. “Formation damage is created the day a well is drilled and as a result of introducing drilling mud, water and oxygen onto a reservoir.”
Using water from the formation itself may go some way towards mitigating that damage. “Our preference would be to drill/jet solely with formation (produced) water. Since radial drilling only uses very low volumes of water, if we could use the same water that has come out of the ground to keep the environment as close to how it was originally, the better the results. We already have filtration systems, therefore this is a very straightforward and highly feasible ambition,” he added.
Moreover, that could radically change the economics of more remote shale and CBM formations. In the Permian Basin, figures from 2015 suggest that the average well required around 300,000 barrels of water. Transporting that water and frack chemicals, as well as dealing with the processing of flowback water, makes up around 12% of the cost of onshore wells, based on recent EIA analysis. Greater efficiencies in water drilling could offer a method for reducing those costs and the volume of water used dramatically.
Unconventional business model
Another advantage of drilling instead of fracturing is that the new unit can be used with a considerably greater degree of accuracy in the areas it penetrates. “When a well is fractured there is little control over where the fractures take place,” Rice continues. “We drill/jet laterals with precision [to an accuracy of within 10 cm], which is likely to yield a better result and also be safer from an environmental perspective.”
Given wider environmental concerns (in Australia and globally), the level of accuracy achievable compared to fracking means that there is a substantially reduced risk of drilling too close to a water table or an aquifer and risking contamination.
With research and trials completed, the technology is now ready for the market. V2H’s Australian arm is already beginning to roll it out on a commercial basis. It has to date been touted as an alternative and competitor to fracking, and the initial focus has been on the Australian industry, where drilling is mostly concentrated on coal seams and sandstone. But Rice is confident that the technology could be used just as effectively to access all forms of unconventional oil and gas.
There may also be other wider potential applications. “In addition to recovering more oil or gas from any given well, radial drilling could solve multiple oilfield problems such as water and gas coning, [fine particle] migration and sand production,” he says. “Given the low cost and rapid deployment, there are many situations where laterals are a great alternative to current technologies and methods.”
Rice says that the drill will be equally at home in the North American shale gas industry as in Australia, without the need for any major technical adjustments. In fact, he believes the technology can find an application in every oil and gas- producing region in the world – and V2H International has plans for them all.
The company recently secured a three-year contract with Queensland-based gas company WestSide and is in negotiations with major oil and gas producers in both Australia and in North America. “We are in the process of setting up V2H USA and V2H Canada, two countries that between them have more than one million wells,” Rice says. “We are actively looking for partners in these and other regions of the world to assist with the commercial deployment. We recently completed a tremendously successful training well in West Texas with our Australian service provider, Nitschke Energy Services, where we drilled 13 laterals.”
Although shale producers across the world have made extensive efficiency gains and cost reductions in light of lower prices, the next great technological transformation may prove harder to find. Yet if V2H’s technology lives up to its claims, it may be a good place to start.