Deepwater Gulf Drilling Creates Demand for Lighter, Stronger Proppants

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Interest by operators in drilling the Paleogene and Lower Tertiary plays in the deepwater Gulf of Mexico has created the need for advanced ceramic proppants that can enhance production in high-pressure, high temperatures wells.

In late March, Houston-based Oxane Materials Inc. unveiled OxThor, the company’s newest advanced ceramic proppant that is targeted for use in technologically demanding deepwater applications. OxThor was developed to target the need of Oxane investors such as ConocoPhillips Company, Chevron Corp., BP plc and Total S.A., who have operations in the deepwater Gulf, Oxane President Chris Coker told Rigzone in an interview.

Coker said Oxane is eager to meet these companies’ needs for proppants that will improve production by transporting more deeply and offering more conductivity. OxThor, which is 20 to 25 percent lighter than competing products available, is designed to withstand closure stress of 20,000 psi and temperatures of 450 Fahrenheit. OxThor’s lightness is a key enabler of its ability to transport more deeply, allowing for more rocks to be propped and for a longer period of time.

Comparing a hydraulic fracture to a highway from the pay zone to the wellbore, Coker said proppants act like the cement on the highway to keep the pathway wide and improve the quality of the pavement, allowing more oil to flow from the pay zone to the wellbore and extending the highway deeper into the play.

The company expects to begin producing in June reservoir quantities of OxThor at its Van Buren, Arkansas manufacturing facility. Oxane uses a broad array of highly scalable process technology to manufacture its proppants. Coker said the company may pump jobs with OxThor this year.

Oxane also offers ceramic proppants for use in onshore shale plays. The company is pumping in real-time its forty-ninth well in a North America tight oil shale play – the largest well to date at more than 6 million pounds — and expects to pump its fiftieth well this month or in June, said Coker.

Coker said Oxane has enjoyed record production, with production this year expected to reach 40 million pounds of proppant this year. Moving forward, Oxane’s two product lines at its manufacturing facility will be able to produce up to 100 million pounds of the company’s three proppants: OxThor, OxSteel and OxBall.

Coker also sees the potential for ceramic proppants to become even lighter and stronger. The company tests its proppants in environments with up to 30,000 psi, or environments more extreme than what a proppant would encounter downhole, to measure its effectiveness.

On average, Oxane’s proppants measure 100 microns in diameter.

“Our emerging generation should be effectively the same size plus or minus 10 to 20 microns,” Coker commented.

Uniformity in size and shape are important for allowing oil and gas to flow quickly under any pressure.

“If you have lots of 18-wheelers, Honda Civics and F-250s competing for space on a three-lane highway, they won’t be able to move quickly,” said Coker. “If all the cars are the same and the path is wider, it’s easier for the cars to drive at speed. Our proppants afford something that looks like the second scenario.”

Oxane also offers OxBall, a proppant focused on intermediate to deep wells, and OxSteel, which is focused on intermedia to extremely deep wells. The company’s products were developed with the help of nanotechnology research efforts at Rice University.

The Lower Tertiary play is expected to drive long-term production growth in the U.S. deepwater Gulf, with estimated spending of $50 billion in development capital expenditure through 2020, according to a November 2013 report by Wood Mackenzie.

Lower Tertiary production in 2013 was estimated at 113,000 barrels of oil equivalent per day (boepd), or 8 percent of the region’s production. Production from the play is expected to outgrow by 2028 the current leading subsalt Miocene play to roughly 41 percent of regional production, or 533,000 boepd, according to Wood Mackenzie.

Royal Dutch Shell plc’s success with the Great White discovery first proved the plays’ commercial success in 2002. A total of 15 commercial discoveries, amounting to recoverable reserves of more than four billion barrels of oil equivalent, have been made since that time. Chevron, BP and Shell, which hold 45 percent of the plays’ remaining reserves, account for much of Lower Tertiary’s exploration activity, Wood Mackenzie said.

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