Why Shell Drilled a “Horseshoe” Well in the Permian Basin

Trent Jacobs, JPT Digital Editor | 11 February 2020 spe.org

How can you improve the returns of a short horizontal well? When you get to the end, turn the drill bit around and start drilling back toward the rig. This is exactly the maneuver Shell pulled off after running into some drilling issues on a multiwell pad in the Permian Basin.

“Last year, we faced a problem accessing part of the reservoir,” said Jason Peart, the wells operations manager who led the project for Shell back in Febuary of 2019. While drilling the vertical section of a horizontal well, he explained that “excessive” mud losses were seen at shallow depths. “What that did was prevent us from drilling and completing one of our 5,000-ft laterals.”

A choice had to be made. Abandon the problem well and try drilling another one—which meant risking losing another well. The engineering team could have also elected to abandon the problem well and not accept the risk of drilling a new one.

Instead, the engineers took the road less traveled: they did abandon the one well, but they also extended an adjacent well that was successfully drilled past the lost-circulation zone. The twist was that at the toe-end of this well’s lateral, drilling would continue until a 180° turn was made and another 5,000 ft of wellbore was created within the same target formation.

One vertical section, two lateral sections. 

“We call it the horseshoe well,” said Peart, emphasizing that the well represented its own risk simply because “it’s never been done before.” The reward for success here was that Shell would not leave any of its planned production-footage behind on the pad.

From an economic perspective, the horseshoe well saved 25% on rig time and about 20% on total cost compared with drilling two wells of the same lateral lengths. To a lesser degree, some savings was achieved on the completions side by requiring only one coiled-tubing run instead of two.

Outside of its shape, the horseshoe well is actually very typical. The spacing of the two laterals is about 1,300 ft—leaving enough room for a planned infill well in the middle. Each lateral, landed in the Wolfcamp Shale, also received the same number of fracture clusters as two distinct wells would have. Peart said the U-turn section was left unstimulated, serving merely as a “transit point” from one lateral to the next. All of these factors reduced concerns over fracture interference between the two horizontal sections.

The idea to drill this well had been on the drawing board for some time after a Shell engineer proposed the concept as part of an effort to explore cost-saving drilling methods. Another concept is that of the multilateral well, which is also seen as a cost-saving option since it, too, relies on one wellbore to drill out multiple sidetrack wells.

However, the multilateral technique requires a junction point and mechanical isolation that may not withstand the full force of modern fracturing designs. “What the horseshoe design does is basically give you a multilateral without that junction,” said Peart.

One reason Shell was drilling 5,000-ft laterals in this area of the Permian is because of lease restrictions—an issue particular to the US shale sector whose acreage maps are often dictated by private land ownership and contract terms. This constraint is not unique—there are many so-called “square-mile leases” in the US—highlighting that the first horseshoe well might not be the last.

“Does this well have a future role in the Permian? We believe it does,” said Peart. “Does it have a future role in other basins? Potentially.” He elaborated that Shell is still evaluating the production results of the horseshoe design to understand its true economics.

Production figures are only publically available at a lease level, but show that the four-well pad that the horseshoe well is part of produced more than 2,800 B/D in June of 2019, when the well was completed, and peaking at just over 5,000 B/D the next month. 

The team behind the engineering achievement does not believe it has “hit the limit” on how the design can be used. Shell is considering how the approach can be used to drill even longer laterals. However, Peart said 10,000-ft double-laterals might be too long. The holdup there is the fact that conventional coiled tubing has trouble drilling out fracture plugs past 10,000 ft—placing a 20,000-ft. lateral distance far out of reach for the downhole technology. 

Off-the-Shelf Technology

Though the trajectory of the horseshoe well may appear to push technical limits, Shell’s execution was remarkably straightforward and no major issues were encountered during either the drilling or completion phase.

“The beauty of this design is that it utilized off-the-shelf technology,” emphasized Peart, listing rotary steerable systems (RSS), mud motors, and dissolvable plugs as a few of the enabling components that came from its service providers. Ensign Energy Services was the drilling contractor for the project while Nabors Industries provided the measurement-while-drilling and directional drilling services.

A new coiled-tubing system was developed by Shell and its vendor to handle the lateral distances involved. But in the end, this new unit never left the fabrication facility in Houston since the conventional unit on site was able to drill out all the plugs.

Shell’s own contributions included in-house-developed torque-and-drag models that helped ensure the bit, drillpipe, and casing all moved through the formation smoothly. Based on the publicly available surveys, the result of the collaborative operation was a relatively smooth well path and almost-perfect U-turn.

Much of the meticulous supervision on the drilling side was done from Shell’s remote drilling center in Houston where directional drilling engineers work side-by-side with geosteering experts. But whether in Houston or out in the field, or working for Shell or one of its service providers, everyone involved in the project was watching each stage of its construction very closely.

Peart described the “emotional cycle of this well” as hitting various peaks each time a critical operation was executed—reaching total depth, running the casing, or whenever a plug was pumped down. “You want to celebrate that accomplishment,” he said, “but then you realize that all the other points afterward also have to line up, or else the idea doesn’t work at all and all the work you did just doesn’t count.”

Something To Talk About

Though the horseshoe well was completed last June, its existence did not become widely known until a few weeks ago thanks to a handful of keen observers who posted details of it on social media. David Gibson, cofounder and chief executive of drilling market research firm Gibson Reports, was one of those people.

“I had heard rumors about this project and knew I had the tools to find the data,” he said, adding that when he did find the records, “I was left with way more questions than answers.”

One of those questions was what to call the well. Gibson reported it out initially as the “u-zontal.” A commenter on LinkedIn suggested the name “paper clip well,” while another said the well should simply be referred to as “art.”

“The U-shaped well is pretty interesting—I’ve never seen anything like it,” said Jeff Chambers, the founder and chief executive of MineralAnswers.com, a web-service that provides detailed oil and gas data to mineral rights owners in the US. Chambers also posted a diagram of the well on social media. To him, the significance of the experiment is enhanced since it was carried out in what is considered “prime acreage” in Loving County, Texas.

Chambers said the nonoperating stakeholders are likely to be interested to see how the cost savings achieved on the drilling side factors into the overall performance as production results come into clear view.

The social media posts were seen by other industry professionals who posed dozens of other questions and comments online, many of them expressing admiration for the engineering feat. One person was inspired enough to reverse engineer a torque-and-drag model and then share his analysis online. A few others were quick to point out the industry’s history of drilling highly deviated wells; Shell’s own “fish hook” wells in Brunei are one example. However, none of the other variants mentioned share the exact profile as the horseshoe well.

“What’s great about this well is not the fact that it’s new, novel, and innovative,” said Gibson. “It’s that it starts amazing conversations. Conversations about challenging the status quo—and given the current market and climate, we all need to follow Shell’s lead and think outside the box on all fronts.”

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