Trimulfracing
Ovintiv recently talked about the state of their trimulfracing operations in their 1st quarter 2024 earnings call with analysts. The process continues to be a success for the company and the company is improving the process further in 2024 when compared to 2023. 2024 YTD trimulfraced wells have been completed 30% faster than their average speed in 2023. They have completed a record 4,200 feet per day of trimulfraced wells. Ovintiv has also realized cost savings of 15% on completion costs per foot for trimulfraced wells. Last year, the company completed 30% of their total wells from trimulfracing and this year the company is expected to complete more than 50% of their wells from the trimulfracing process. The company hasn’t seen any degradation to well performance from trimulfracing and the lower treating pressures have allowed the ability to pump wells faster than before. Overall, expect more producers to perform the trimulfracing process, which will allow companies to complete more wells with even fewer frac crews.
Refracing
ConocoPhillips, Marathon Oil, Devon Energy, and SilverBow Resources have announced that they are going to be doing significantly more refracing of wells. SilverBow is seeing strong production results and well productivity from the process. SilverBow estimates that the refracing process has a breakeven timeline of 10 months where the company gets back its cost of refracing based on well level production estimates and forward oil, natural gas, and natural gas liquids prices. SilverBow will look to do 8-10 refracs per year with their additional capital. There are 100 wells that the company is targeting. ConocoPhillips has had an aggressive refracing program in place and looks to expand the process. Devon Energy is looking to do 25 refracs in 2024. Expect to hear more producers doing refracs in 2024.
MVP
Mountain Valley Pipeline (MVP) is expected to come online at the end of May 2024. Recently, the pipeline had a setback as a rupture occurred during hydrotesting. Hydrotesting is a pressure testing process on a natural gas pipeline where the pipeline is filled with water to assess the integrity of the pipeline. The original in-service date of Mountain Valley Pipeline was sometime in 2018 at a total cost of $3.5 billion. Now, the pipeline won’t come online until sometime in 2024 at a total cost of around $7.85 billion. The pipeline has had never ending delays, mostly due to political delays from permitting. It would be no surprise if there are further delays than expected and the pipeline doesn’t come online until October 2024 or November 2024.
