American Oil and Gas Reporter - January 2015 - 55

placement in different intervals and completed in coordination
(zipper fracturing). From this, we can conclude that early in the
development of these plays, there was a common overestimation
of what had been drained both laterally and vertically. In many
instances, we likely still are making that mistake.
The major technological advancements will come from recapturing bypassed or undrained reservoir areas that had been developed previously. Refracturing poorly stimulated wells by using diversion agents or isolation tools will be a major focus in
both oil and gas plays in coming years. However, this still will
produce only the reservoirs under primary recovery. For some oil
and gas condensate plays, there likely will be a progression to
piloting and implementing enhanced oil recovery schemes. As
mentioned, increasing the recovery by only a few percentage points
would add material reserves.

Time Of Opportunity

Erik Hoover, Brigham Resources

You were with Brigham Exploration for 14 years,
transitioned through the company's sale to Statoil, and
then joined Brigham Resources in early 2013. How would you
characterize the general business environment today for
smaller independents compared with when you joined Brigham
Exploration? What are the biggest opportunities and challenges
for independents?

HOOVER: There are similarities in the business climates. I
joined Brigham in 1997, and 1998 and 1999 were tough years
in the oil and gas business. But we climbed our way out and everything was great until another downturn hit in late 2008. That became another very difficult time for many independents. At one
point, Brigham Exploration's stock was selling for less than $1.00
a share. But we bounced back again and the company ended selling to Statoil three years later for $34.50 a share.
I see 2015 as another challenging year. I don't think there is
any way around it. However, this, hopefully, is a short-term situation that will last maybe a year or so. And what is different this
time is that people are reacting much more quickly. We have seen
this before and we know what to expect. We are hitting the brakes
sooner and service companies are more willing to reduce costs
earlier, so we are better prepared for a slowdown.
Operators cannot keep drilling $10 million wells at $55 oil,
so I expect a lot of rigs to be laid down by the end of the first quarter. But we see 2015 as an opportunity. The biggest opportunity is the ability to acquire or bundle acreage to our existing portfolios. Companies that have cash will move to expand their lease
positions. In addition, the laws of supply and demand dictate that
there will be opportunities to reduce well costs. So, while it could
be a tough year, it also will be a time to act on opportunities. We
will weather the storm, and when oil prices creep back up, we
will get back to work.

Outlook 2015

Brigham was an early mover in tight oil plays. How
would you summarize the key lessons learned in
drilling, completing and producing these wells to date? How
is your company seeking to apply the lessons in its ongoing operations?
HOOVER: We have learned so much over the years that it is
impossible to reduce it to a few paragraphs. Each resource play
is different. Some technologies may work across the board, but
most do not. For instance, we used swell packers extensively in
Bakken multistage completions. Now, Bakken operators are going to cemented liner applications, similar to what we are using
in the Permian Basin. We have tried some of the basic technologies and formulas we routinely used in the Bakken, and they do
not work as well in the Permian. Each play requires a little different formula.
If we have taken anything from Brigham Exploration's experience in the Bakken, it is the ability to characterize the reservoir
and understand the rock. Some of the biggest lessons we have
learned relate to where to drill and land laterals, and how to stimulate them properly. We continue to work on reservoir characterization every day, including petrophysics, geology, rock mechanics, geochemistry, etc.
We have characterization initiatives under way to help answer
key questions in the Permian. For example, we are looking at thin
layers in horizontal shales that may actually rob the frac energy.
As the frac breaks, weaker boundaries may take part of the load,
impacting fracture geometry and performance. We are working
hard to understand this issue, and may modify landing depths to
stay away from some of those zones to improve frac jobs.
We also are developing best practices to capture the knowledge we obtain every day. Drilling efficiency is a good illustration. Our initial Permian single-section horizontals took 38 days
to drill. We just drilled one of these well in 22 days, representing a 42 percent reduction in drilling time with a corresponding
cost reduction.
Applying the lessons learned is a process of constantly feeding the machine and analyzing the results. We try not to make too
many adjustments at once because then we can't determine the
net effect of any one change on productivity or estimated ultimate
recovery. But we are turning the knobs continually, analyzing the
outcomes, applying the lessons learned to the next well, and building our knowledge base. Our well results show that; performance
is getting better and better as we go along.

Technology has been instrumental in making resource plays viable. Looking at your company's operations, what are the indispensable technologies most critical
to success in terms of asset performance and bottom-line profitability? Are there particular areas in need of continued technological improvement or innovation?

HOOVER: Fracturing technology has changed the world, and
the technology has reached the point where the industry has become very good at cracking rock efficiently and safely. It is a complex operation, but it has become pretty simple from a technological perspective. In fact, the frac recipe we are using is only
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American Oil and Gas Reporter - January 2015

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