Industry View 

Just a quick look at Steve Holditch's bio and one can see why a colleague noted that he is "perhaps the top engineer in the United States in his field—knowledge of hydraulic fracturing." Knowing this, PTTC was honored when Steve agreed to be the lead-off hitter in PTTC's recent Hydraulic Fracturing Module on Tight Gas Sands. Steve's presentation provided an overview and identified trends and issues. With his experience in industry and academia, domestically and internationally, PTTC felt it appropriate to solicit his opinion about some technology-related issues facing the domestic E&P industry.

Q: Most individuals acknowledge that technology is key to future success in E&P operations. There are many stakeholders involved in bringing technology to maturity, from the innovator/inventor to the government to private companies investing in product refinement and technology acceptance. Knowing how the domestic E&P industry works, how do you see academia best being able to contribute and what could the U.S. do better to further the contributions coming from academia?

 A: There are two areas that come to mind where academia can be of benefit to the E&P industry. One is innovation—it is remarkable what young, intelligent minds can do to look at problems in new ways and find innovative solutions. The second, by teaming with academia, industry helps to develop the new talent they need to apply new solutions to the ever increasing complexity of problems facing the oil and gas industry.

Q: By any standard, the U.S. is a mature producing arena. There are hundreds of thousands of wells with multiple decades of production and field data. Still, with recent and projected oil and gas prices, there are opportunities that remain. The challenge for industry is to cost effectively mine the data to find the diamonds. What data mining approaches do you feel offer the most potential for an industry that is constrained by its human resources?

A: In many of the new, large, high permeability fields being developed around the world, technologies like multi-lateral wells and smart fields are becoming common. In such cases, the benefits of the technology are clear. However, one characteristic common to all unconventional reservoirs is that the ultimate recovery from a single well or completion is usually much lower that one expects from wells completed in conventional reservoirs. As such, to get the oil and gas out of the reservoir, we have to drill wells in a denser spacing in unconventional reservoirs. Because more wells are needed to get out the same amount of oil or gas, we have to be very cost conscious and minimize investment to maximize profit. Having said that, we must realize that more engineering is required to successfully exploit unconventional reservoirs, so we really need to spend more money up front collecting the data we require. We need to use modern logs, well tests, and core analyses up front to improve the understanding of the reservoir.

Also, there are many technologies that can be applied in unconventional reservoirs that were originally developed for the newer international markets. For example, horizontal and multi-lateral wells can be successfully used in coal seams and gas shale reservoirs. Well site data monitoring with internet connections to retrieve the data can be very useful in almost every situation. We find that having access to better data allows us to do a better job of optimizing completions and production systems. In summary, we need to use much of the modern technology available, but in a way that minimizes the costs over the life of the well or field.

Dr. Stephen A. Holditch is the Samuel Roberts Noble Foundation Endowed Chair and head of the Harold Vance Department of Petroleum Engineering at Texas A&M University. He previously worked for Schlumberger. He works on projects for Holditch Reservoir Technologies and on special projects to assist the management of Schlumberger. He served as president of S.A. Holditch & Associates, a full service petroleum engineering consulting firm from 1977 to 2000. His firm provided petroleum engineering technology involving the analysis of low permeability gas reservoirs and the design of hydraulic fracture treatments for various industrial and government clients. The expertise of the company included capabilities in reservoir simulation, well testing, reservoir engineering, natural gas engineering, coalbed methane development and the use of horizontal wells to develop gas reservoirs. Dr. Holditch also has been a production engineer at Shell Oil Company in charge of workover design and well completions for various Shell Operations in South and East Texas. He joined the Petroleum Engineering faculty at Texas A&M University in 1976 and was named to the R.L. Adams Endowed Professorship in 1995. Throughout his career, Dr. Holditch has been active in the Society of Petroleum Engineers (SPE), serving as president from 2001 to 2003 and in 2005 he received SPE's Anthony F. Lucas Gold Medal from SPE.