American Oil and Gas Reporter - January 2015 - 63

Outlook 2015
The Way Forward

Jeﬀ A. Miller, Halliburton Company

There has been a lot of discussion about what lower
oil prices could mean to U.S. tight oil plays. What are
your expectations for general business conditions in the domestic market in 2015? How are those expectations impacted by
the fact that many oil and gas companies maintain active hedge
programs? Which particular oil plays or basins do you expect
to be most active? How about gas shale activity?
MILLER: We recognize there is a concern about the decline in
commodity prices. However, on a longer-term basis, we do not
believe these lower price levels are sustainable.
In the past five years, U.S. shale gas production has increased
by 700 percent and tight oil production has increased by 600 percent. Within a year, the United States is expected to become the
world's largest oil producer, surpassing Saudi Arabia and Russia. While this means we may be in a situation where there is a
slight oversupply at the moment, demand is growing also, and by
2020, we will have the capacity to be a net natural gas exporter.
While we expect activity levels to slow in 2015, Halliburton
is well-positioned to handle market uncertainties. We will remain
focused on cost management; executing on our strategies in unconventional resource plays, deep water and mature fields; and
delivering on customer service. If you look at how far we have
come in only five years, we have every reason to be optimistic
about what the economic future holds.
We continue to expect the Permian Basin to be very active in
2015, but we are seeing larger completion volumes in almost every
basin in North America and believe this trend will continue. Also,
based on positive economic results of several large-scale, full-lateral pilot refracturing programs in 2014 utilizing new technologies that seal off existing perforations and stimulate bypassed and
new intervals, we are seeing accelerating refracturing activity across
mature fields, including the Haynesville, Marcellus and Eagle Ford.

Halliburton performed the first commercial hydraulic
fracturing treatment more than 65 years ago. Some 2
million frac jobs later, it has been said that fracturing has done
more to increase reserves recovery than any other single
technology. The science of pumping and evaluating frac treatments has advanced considerably over the past decade in support of resource play development. What is the next big step
in fracturing to further increase recovery factors? How do you
envision frac technology evolving over the next five to 10 years
to improve completion performance, treatment efficiency,
economics and safety while reducing the overall environmental impact?
MILLER: Hydraulic fracturing has changed quite a bit since Halliburton performed the world's first frac job in 1947, and we remain at the forefront of those changes. Our customers expect us

to work hard to innovate in ways that lower the cost of production per barrel of oil equivalent through custom chemistry, surface efficiency, and subsurface insights. One way we are transforming the delivery of hydraulic fracturing services is a new approach to fracturing that improves productivity and optimizes the
operator's return on investment.
This new approach includes an integrated package of hydraulic
fracturing products, tools and systems designed to maximize productivity and minimize downtime and surface footprint for greater
well completion efficiency. This includes the first new fracturing
pump in two decades, which has been custom-designed to
thrive during 24-hour operations while improving reliability by
as much as 50 percent.
Halliburton's game-changer is subsurface insight. This insight
is what led us to develop a new seismic-to-stimulation service,
which links geoscience and engineering, and tells us where and
how to drill, and where and how to fracture. More than 60 projects are running now that use the seismic-to-stimulation service, and we are seeing customers expand their use of the service to multiple basins. Early wells completed using the proprietary, collaborative workflow have seen more than a 35 percent
increase in average production with lowered frac-finding costs,
compared with offset wells. We will keep developing and expanding this holistic engineering service throughout 2015, and
will continue to see it serve as an engine for commercializing
new technologies.
From an environmental standpoint, since water is such an important part of the fracturing process, we are working continuously on ways to control the way we source water, use it, and
recycle or dispose of it. We are able to treat and reuse produced
water, and have developed salt-tolerant, high-performance
fracturing fluid systems that enhance treatment effectiveness
while enabling operators to use 100 percent produced or flowback water.

Although crucial, fracturing is only one part of the hightech operational processes required to develop unconventional assets. What trends are shaping technological capabilities across drilling, completion/stimulation, and production
operations in tight oil and gas shale plays? Is the future all about
more wells per pad, longer laterals and more fracs per stage, or
is bigger proving not necessarily better in horizontal resource
plays? In what areas do you anticipate seeing significant innovation?

MILLER: Halliburton has been focusing efforts on developing
technology to improve the industry's understanding of unconventional resources, and one of our driving forces is multidisciplinary collaboration combined with science and engineering innovation to deliver customized well solutions. Ours is no longer a
"one-size-fits all" business, especially as unconventional markets
and mature fields become growing areas of focus, each with its
own very unique sets of challenges.
Shale is about the learning curve. Rather than simply looking
at it as bigger is always better, Halliburton's solution has been the
synergistic integration of completion technologies designed to
achieve the highest production output. To that end, the complete
JANUARY 2015 63

American Oil and Gas Reporter - January 2015

Table of Contents for the Digital Edition of American Oil and Gas Reporter - January 2015