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The Play, Volume 2, April 2017

Focused & Fueled


LESS IS MORE IN SOUTHERN TEXAS
How we generated $111 million in savings from 2012 to 2014 by
switching to Central Production Facilities.
Staff Report Oil pumping station in South Texas at sunset. Photo: Public Domain Pictures

Beginning in 2010, it was production manager from South Texas. On a and gas before recombining
common to drill single-well CPF, the aggregation of prownetize the va- it, so reservoir, production
pads with each having their pors and generate additional profits. Oil also and operations employees
own production equipment. can travel from CPFs to pipelines, instead of know when wells come on-
This included a separator and requiring truck transportation. This is not only line or go offline. This proce-
heater treater to divide the more reliable and cost effective, but it also dure will effectively reduce
gas, oil and water produced reduces surface impact. capital costs and minimizes
from the well and tanks to There are many benefits to CPFs. Each wells Chesapeakes footprint in
store the water and oil. allocation separator measures the oil, water upcoming operations.

From each well, the gas went


out by pipeline while trucks A glimpse into the complex machinery at one of the Cen- TAPPING INTO OUR MOST VALUED
hauled off oil and water. This
system worked with one-well
tral Production Facilities. Photo: MorgueFile
wheels were put in motion to make these
RESOURCE
pads. As pads grew to hold pads less equipment-heavy and more cost An aggressive collaboration initiative creates a road map to share
four, eight or even 12 wells, efficient and productive. The answer: central best practices, capitalizing on opportunities like never before.
production equipment multi- production facilities, or CPFs, where through Staff Report ted with creating a strike
plied and became an ineffi- a pipeline gathering system, the production of team to see firsthand how
cient use of capital resources. multiple pads is brought into a single facility. As the E&P industry navigates a challenging each production facility oper-
About three years ago, the commodity price environment with limited drill- ates, identify best practices,
Oil and gas are brought into a common sep- ing activity, Chesapeake is focused on strategi- challenges and opportunities,
On a CPF, the aggregation of arator, where some of the gas is sent to mar- cally evaluating and increasing the value of its and effectively share that in-
production allows us to cap- ket, water to tanks and oil to the common high-quality assets. The key lies in the hands formation to improve opera-
heater treater and then tanks. And as one of the companys employees, who are quickly tions across the company.
ture this ash gas, monetize the pads production naturally depletes, another learning how collaboration, knowledge sharing
vapors and generate additional comes online, allowing for continuous pro- and working together play a significant role in Incorporating ideas from the
profits. duction with a smaller investment. creating sustainable, long-term growth. field will potentially save more
than $17 million and add $20
Not only do CPFs drive down capital costs, A tactic critical to securing that growth is de- million in revenue.
- Kelly Hart, Manager, they capture more gas than single-well pro- termining how to continually generate the most
Production South Texas duction equipment, explains Kelly Hart, production out of every well. The solution start-
PURSUING PERFECTION
In Bradford County, Pennsylvania, the Iceman pad site is bustling
with action, completing a well sure to produce enhanced returns.
In pursuit of perfecting its completions technology, Chesapeake is
finding significantly more value in each new well.
Staff Report

Parts of the Iceman pad site facilty in Bradford County, Penn- A pipeline used for resource transportation at the Iceman pad
sylvania, that is first to utilize PANDA. Photo: Flickr Dale Malody, Vice President, focused on creating value, site in Bradford County, Pennsylvania. Photo: Flicker user
Appalachia North. When the and through testing various @amerune
They say that practice makes perfect. If so, Appalachia North drilling and aspects of the completions
practicing an action more than 700 times - in completions teams found effi- process increased individu- PANDA allows us to quickly understand suc-
this case drilling and completing wells - might ciencies in 2014, it led to sig- al well deliverability and re- cess and failure in tests, said Reservoir Man-
be enough to rest easy and know you are an nificant cost savings. coveries by more than 30% ager Garrett Benton. This analysis, coupled
expert. The employees from Chesapeakes since 2011. with reservoir modeling studies, enables us to
Appalachia North business unit did just the op- The business unit reinvested optimize our field development, creating great-
posite. After six years in the well-established most of the savings of nearly INTRODUCING PANDA er value for our business unit.
northern Marcellus, they continued to look for $1 million into a more robust Cluster spacing and cluster efficiency are two
ways to improve efficiency, cost and time, most completions design to boost During a series of side-by- areas that were tested.
recently through testing and analysis. As a re- well deliverability. Transla- side well tests called twin
sult, the team is seeing a 40% reduction in drill- tion? How to get more gas well pairs, the completions Cluster spacing is the distance between the
ing cost per foot and 150% improvement in rig from each well. The team team changed one parame- perforations in the casing, while cluster effi-
efficiency. ter on the test well while the ciency is related to the total number of clusters
reservoir team helped com- that have been effectively stimulated. Spacing
pare the results against the that is too close together wastes money, while
ENHANCING EFFICIENCY Our team mantra is, with control well - results seen too far apart leaves valuable reserves in the
great rock comes great quickly with a tool called ground. For example, if there is one cluster in a
Were the largest leaseholder in this play, PANDA. An acronym for Pro- 10,000-foot lateral, there is only one place that
which many industry experts agree is a world- responsibility.
duction Analysis Dashboard, the well can produce from, leaving unproduced
class dry gas asset, and were determined to PANDA provides information reserves. If clusters are too close together,
keep driving continuous improvement, gener- - Dale Malody, Vice Presi- and analysis in an easily ac- those spaces compete against one another.
ating more value out of this great asset, said dent Appalachia North cessible platform. Continue reading on next page.
The team also tested different volumes of prop- dollars will add up fast. There is so much op-
pant per cluster, which is used to keep the frac- portunity and upside potential in this asset, SPREADING THE POWER
tures in the rock open. In the test case, the wells which has decades of production ahead of it,
with reduced proppant per cluster performed said Malody. We know with great people and Long-distance drilling in the Appalachian moun-
similar to those with a higher level, which pro- with great collaboration, this asset will con- tains is making Chesapeake more competitive on
vides an opportunity to generate savings of tinue to surpass our expectations. Our team Marcellus Shale.
more than $250,000 per well. In an area where mantra is, with great rock comes great re- ue to the company.
Chesapeake may drill another 2,500 wells, the sponsibility. Staff Report
The Appalachia North team
Any Chesapeake comple- also reached new lengths
EXECUTIVE SPOTLIGHT: We are a strong company with great peo- tions engineer will tell you
that optimizing well perfor-
in late 2014. The longest
well in the play produced
ple, high quality assets and a promising
FRANK PATTERSON future. Thats why I came to Chesapeake
mance is a group effort. a lateral length measuring
From the geoscience team 10,800 feet almost two
Executive Vice President, Explora- creating a 3-D depth con- miles, setting a record for
tion & Production, Frank Patterson, on - Frank Patterson, EVP, Exploration & version procedure to keep the Marcellus Shale. De-
dreams about the next big field and why Production the well in the pay zone, spite some complicated
he believes in Chesapeakes future. to the drilling team drilling geology, Geoscience Man-
Pattersons teams are not the companys only longer, faster, less expen- ager Mike Cervantes says
Staff Report source of flexibility. Chesapeake is also ex- sive wells, the Appalachia
they couldve kept going.
Technical expertise and energy are two very ploring domestic and international joint ven- North operations team was We now have the experi-
difficult elements to build up in a company. I tures, which Patterson appreciates for the risk positioned to make huge
quickly realized Chesapeake was way ahead of mitigation, reduced capital exposure and win- strides in efficiencies due ence to execute these com-
the curve in those areas, and that was very ex- win collaboration they offer. We are a strong plex laterals and will find
citing to discover, said Patterson, who retired company with great people, high-quality as- to teamwork. As one busi- opportunities to lengthen
from Anadarko Petroleum before coming to sets and a promising future. Our employees ness unit, the groups con- even further in the future,
Chesapeake. We have some of the best tech- are focused on driving down the cost of doing tinue looking to reach new said Cervantes.
nology and people Ive ever seen. This compa- business and growing our company for the heights and add more val-
ny has always been known for its high-quality long term, and I have a great deal of confi- The Appalachian Mountains, especially the North, have proven to be resource-
land positions, but you cant truly understand dence in that. Its why I came to Chesapeake. ful to Chesapeake. Photo: Alex Grichenko
the technical capabilities until you see them
firsthand.

One of the companys most valuable technical


resources is the Reservoir Technology Center,
where scientists analyze samples faster than
other labs and deliver results that help Ches-
apeake achieve higher rates of return. With
more than 60,000 feet of core inventory and
advanced lab equipment, Patterson aims to
capitalize on this unique advantage.
We can go back to samples we first analyzed
years ago and study their properties to gain
insight, determine what we can use from that EVP of Exploration & Production, Frank Patterson, over a
rock to find the next big field, said Patterson. map pointing at locations new on-field operations. Photo:
Chesapeake media site