In part one of our Frac (R)evolution series, we examined the implications of US Light Tight Oil (LTO) demand on the hydraulic fracturing industry, as well as the subsequent need for service companies to improve their equipment reliability.

In part 2, we will discuss two additional ways that companies can achieve profitable growth in the Frac 2.0 era.

  1. Doing more with less – Making a step change in surface efficiency
    Surface efficiency has significantly improved over the last five years. That’s due largely to structural changes that have improved companies’ abilities to design and execute jobs. These include multi-well pads, 24-hour operations, optimized processes such as zipper operations and new technologies such as frac sand boxes. Combined, these changes and enhancements have led to an increase in fleet efficiency of more than 60 percent for some industry players.1 Yet, even with that extraordinary improvement, frac fleets are still significantly less efficient than other industry benchmarks (see Figure 1).2
Figure1:  A bar chart showing operating time benchmarks for industries. Frac fleets are still significantly less efficient than other industry benchmarks.

Going forward, the continued adoption and optimization of the levers of the last five years will continue to be important. But they may not be enough. Through our analysis, we believe that three actions can unlock an additional 80-100 percent increase in efficiency potential.

    1. Take a zero-based look at what is needed and what is not
      Today, every frac fleet – even those within the same basin and working for the same service company – is planning and executing jobs in a different way. We have found fleets for the same company completing anywhere between 50-250 stages per fleet per month within the same basin. To address this challenge, we believe service companies, in collaboration with their customers and partners, need to map out the critical path of activities that add value. The goal is to understand the should-be execution time with manufacturing-like precision.
    2. Optimize the critical path activities
      Once the critical path is identified, service companies need to better understand the impact that emerging technologies and automation can have on efficiency. Additionally, service companies need to harness the best practices within their organizations and use them to standardize operating procedures across their fleets. We believe applying this approach can lead to significant efficiency gains during the time between pumping a stage and preparing to move from one pad to the next.
    3. Rethink / digitize critical activities
      In addition to understanding the critical path, the frac industry can digitize critical workflows to drive consistent execution. This is particularly relevant wherever multiple stakeholders must coordinate their actions. For example, when managing a fleet’s movement from one pad to another or delivering the last mile of proppant, digitizing the planning and execution onto a common platform allows companies to leverage user-friendly, mobile interfaces for drivers, planners, field personnel and management teams.
  1. Improving reservoir recoverability by improving well productivity
    Well productivity has significantly increased since the advent of horizontal drilling. The secret formula of the past – which involved adjusting key parameters such as lateral length, cluster spacing, frac intervals and proppant loading – doubled well productivity. We believe the next wave of well productivity improvements will be led by digital capabilities that connect surface operations with subsurface reservoirs. This has the potential to unlock value in three key ways:
    1. Connecting well construction
      By embracing digital fracking, companies can significantly boost reservoir recoverability. This involves integrating workflows across geological, reservoir and drilling domains, and accessing up-to-date information using the cloud and automated feedback loops. It also involves reducing design subjectivity by using AI-based tools to assist engineers with evaluations.
    2. Optimizing decision making
      Scientific models can provide new insights by combining reservoir models, frac parameters, and well flowback of past jobs to predict behaviors of future wells. This scientific modelling, which directly informs decision making, becomes even more powerful when complemented with machine learning algorithms, which can identify patterns of suboptimal surface/pumping parameters and recommend changes to optimize recoverability. While we recognize limitations exist today with respect to modelling capability and advanced analytics due to limited data sets, the biggest value here is unlocked by developing “super data sets” through partnerships with operators.
    3. Activating non-productive zone/clusters
      By combining the latest oilfield technologies and frac design principles with advanced analytics, oilfield service companies and operators can correlate production flowback data (e.g., hydrocarbon flow, proppant quantity, water production, etc.) with frac parameters (e.g., proppant pumped, hydraulic horsepower delivered, stage efficiency, etc.). This exercise enables them to determine real-time frac optimization parameters and improve well productivity by understanding the productivity of individual clusters.

By reducing capital intensity (as described in part one of the FRAC (R)evolution series), doing more with less, or improving well productivity, companies can bolster profitability. Our experience and analysis suggests this can be in the range of 900-1500 bps.3 Any of these actions described above will generate gains, but the real winners in the future hydraulic fracturing market will be those that pursue all three strategies – either on their own or by establishing key partnerships within and across the fracking ecosystem.



Adnan Khan

Senior Manager – Accenture Strategy, Energy


Matt Walters

Senior Manager – Accenture Strategy, Energy

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