“Oil service companies roll out new technologies to break up more earth more cheaply.”
Few energy industry practices have sparked more controversy than hydraulic fracking. First, wells are drilled horizontally below the surface, allowing a single bore or pathway to reach vertical pockets of oil and natural gas trapped between formations of shale and other rock. Then high-pressure jets of water, sand, and chemicals are pumped into the ground to create fissures through the rock so oil can seep out and be retrieved. Regulators, environmentalists, and academics are studying whether the practice can damage the environment.
Undeterred, oil services companies including Baker Hughes (BKI) and Schlumberger (SLB) are continuing their quest to devise ways to create longer, deeper cracks in the earth to release more oil and gas. These companies are no longer content to frack—they want to super frack.
High crude prices and newly accessible oil and gas embedded in shale rock in North America are driving the wave of innovation. The more thoroughly that petroleum-saturated rock is cracked, the more oil and gas is freed to flow from each well, raising the efficiency—and profit—of the expensive process. For example, the growing use of movable sleeves, a tubelike device with holes that fits inside a well bore, lets drillers target multiple spots to dislodge entrapped oil. This technique can reduce the $2.5 million startup cost of a fracking well near the Canadian border by up to two-thirds, according to a recent analysis by JPMorgan Chase (JPM). Multiply such savings by hundreds of wells added in that area each year, and you start to understand why the industry is so eager to hone the process. “I want to crack the rock across as much of the reservoir as I can,” says David A. Pursell, a former fracking engineer who’s now an analyst at Tudor Pickering Holt in Houston. “That’s the Holy Grail.”
Baker Hughes has set its sights on creating “super cracks,” a method of blasting deeper into dense rock to create wider channels. The aim of the technology, branded as DirectConnect, is to better concentrate the pressure of fracking fluids to reach oil or gas farther from the well bore, which existing methods fail to do as effectively.
The company also is trying to speed up the fracking process. Wells usually are fracked in steps, as plastic balls are dropped down to plug the well at various stages and isolate different zones for fracking. It can take days to get a drilling rig to the site and fish out conventional frack balls, which can get stuck over the course of 20 or 30 preparation phases in a typical well before production can begin. With land-based rigs renting for up to $30,000 a day, reducing such delays is critical. So Baker Hughes has developed disintegrating balls, which turn into powder “like an Alka-Seltzer” after a couple of days, says Rustom Mody, vice-president for technology…