SPE-194345-MS

Trends in the North American Frac Industry: Invention through the Shale
Revolution

Leen Weijers, Chris Wright, and Mike Mayerhofer, Liberty Oilfield Services; Mark Pearson, Larry Griffin, and Paul
Weddle, Liberty Resources

Copyright 2019, Society of Petroleum Engineers

This paper was prepared for presentation at the SPE Hydraulic Fracturing Technology Conference and Exhibition held in The Woodlands, Texas, USA, 5-7 February
2019.

This paper was selected for presentation by an SPE program committee following review of information contained in an abstract submitted by the author(s). Contents
of the paper have not been reviewed by the Society of Petroleum Engineers and are subject to correction by the author(s). The material does not necessarily reflect
any position of the Society of Petroleum Engineers, its officers, or members. Electronic reproduction, distribution, or storage of any part of this paper without the written
consent of the Society of Petroleum Engineers is prohibited. Permission to reproduce in print is restricted to an abstract of not more than 300 words; illustrations may
not be copied. The abstract must contain conspicuous acknowledgment of SPE copyright.

Abstract
Hydraulic fracturing has been a part of oil & gas development in North America for seven decades.
Hydraulic fracturing was first conducted in 1947. Commercial operations began in 1949. After over twenty
years fracturing took a large step up in the late-1970s with its application to tight gas sand formations. The
game changer that brought discussion of hydraulic fracturing to dinner tables, bars and sidelines of soccer
games is the recent advances that enable commercial extraction of natural gas and oil directly from shale
source rocks. Since the start of shale fracturing in the early-1990s, fracturing technology and the pressure
pumping industry's efficiency in delivering fracturing services have changed almost beyond recognition.
The result has been the world-changing Shale Revolution.
Through researching industry databases, the authors have compiled an industry-wide review of North
American hydraulic fracturing activity dating back to the first work done in the late 1940s. Yearly stage
count in the 1950s through the early 1990s was 10,000 – 30,000 stages/year, while recent peak levels show
a step change in activity aproaching 500,000 stages/year (Fig. 1). While the North American industry's
fracturing horsepower grew about 10-fold between 2000 and 2018, yearly frac stage count grew 20-fold in
North America and proppant mass pumped grew 40-fold.
The authors show how the industry achieved a step-change in reducing service delivery cost through
innovation and efficiency, allowing sustained economic development of unconventional resources at
decreasing breakeven production costs. Technological changes, as assisted by a better understanding
through frac diagnostics, integrated modeling and statistical analysis have enabled the large cost reduction
to commercially produce a barrel of oil. As a result, shale frac designs have focused on higher intensity
completions with tighter stage and cluster spacing, improved diversion through extreme limited entry
perforation design and simultaneous and zipper frac'ing, increasing proppant mass per well, utilizing next-
generation frac fluids to increase produced water recycling and using cheaper lower-quality proppant. At
the same time, the environmental footprint of oil & gas production has been shrinking and will continue to
do so as operational changes continue to make our industry a better neighbor, for example through faster
well construction utilizing fewer pad locations, development of quiet fleets, greener frac chemistry, frac
focus disclosure, etc. Together, oil and gas operators and their service providers have used technology &
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innovation to improve efficiencies and increase the overall daily pump time per frac crew. However, there
is plenty of room for further improvements in technology and efficiency.
We believe this is the first industry database of its kind covering hydraulic fracturing activity in the United
States, going back to the 1940s. We hope this paper provides a unique perspective of how our industry has
changed through the Shale Revolution.

Introduction
Fig. 2 shows drilling rig activity in the United States, Canada, OPEC countries and the rest of the world
since the time hydraulic fracturing started in the late 1940s. Some of the record keeping did not start until
1975, hence the lack of some older data. For most of the last few decades, about half of the world's drilling
activity has occurred in the United States, and about 10% in Canada.

Figure 1—US stage count over the last seven decades of hydraulic fracturing (Gallegos and Verala, 2015;
Coras Research, 2018). Frac activity in stage count has increased about 20-fold since the year 2000.
Differences in stage count estimates between 2001 and 2013 for the three sources mostly originate from
incomplete stage count information and varying assumptions of stage intensity per unit of lateral length.

The same applies to the number of wells drilled every year. As shown by the bottom of Fig. 2, during the
last 15 years of the Shale Revolution, some 50,000 out of 100,000 wells were drilled annually in the United
States. OPEC's share is only about 3% of all wells drilled, although it is slowly increasing.
The activity levels in these figures show that drilling for natural gas and oil has always been more
prominent in the United States going all the way back to Colonel Drake's first oil production in 1859 to find
an alternative for whale oil to provide lamp light. This prominence increased during the second world war
and again following the oil embargoes of the 1970s. The most significant change came at the dawn of the
Shale Revolution in the early 2000s. After an over 30-year decline in US oil production from the 1971 peak,
the Shale Revolutoin has more than doubled US oil production to a new all-time high today. While overall
drilling activity was temporarily down during the recent 2015-2016 downturn, the United States has been
responsible for about 50% of the world's wells drilled during the 2010 – 2014 period, and it is quickly
returning to that position now.
Note that there is significant discrepancy in world well count between the various data sources that
generated Fig. 2, for example between OPEC's total world well count and the sum of the IEA and IHS
well counts in various countries. As a result, our estimate of the fraction of US well activity may be off
by several percent.
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Figure 2—Over the last few decades, about 50% of all drilling rigs in the world have been deployed in the United States,
resulting in about 50% of all new wells in the world having been drilled there (Baker Hughes; Organization of the
Petroleum Exporting Countries; US Energy Information Administration; IHS Markit; Tudor Pickering Holt & Co, 2018).

American shale development proliferated since Mitchell Energy launched commercial shale gas
production in the late 1990s. As described by Weijers et al. (2018), it is believed that unique private mineral
ownership forms the basis of the elevated activity level in oil and gas exploration in the United States,
further enhanced by availability of resources, secure property rights and a high level of civil liberties.
These levels of freedom do not just guarantee people a roof for shelter, it guarantees a land title enabling
development. It does not just provide people land to live off, but mineral rights that can be developed or
sold. That guarantee in ownership provides collateral people can borrow against. It creates an intimate
system of ownership that helps people to take greater risk due to the leverage of a possible reward, which
ultimately fosters development and general and widespread prosperity. Development's motor is innovation
and technology.

Technology
In addition to the tailwind provided by US property rights, the Shale Revolution was driven by innovation
and technology. We present a gross simplification of some of the technical events that helped spark the
American Shale Revolution, understanding that current Shale Revolution entrepreneurs and engineers stood
on the shoulders of many legends of hydraulic fracturing and other never-to-be-recognized pioneers.
We start this brief historical overview in the late 1980s, at a time when joint industry research was
conducted by various industry groups with sponsorship from the U.S. Department of Energy and the
industry's Gas Research Institute in response to the oil embargoes of the 1970s. One of the main goals of
these efforts was to further understand hydraulic fracturing via direct measurements of hydraulic fracture
growth in tight sandstones. One key observation from Warpinski et al. (1991), observing fractures in unique
mineback and core-through experiments of created hydraulic fractures, was that fractures always show a
significant degree of complexity with dozens of parallel multiple fractures growing simultaneously in a
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relatively narrow (20 – 40 ft wide) zone. That was counter to the prevailing notion at the time that simple
bi-wing fractures generally grew from the wellbore.
A key technological spark for the Shale Revolution came when Mayerhofer et al. (1997) experimented
with low-proppant (and accidentally no-proppant) slickwater fracs in the East Texas Cotton Valley
Sandstone back in the mid-1990s. Their premise was that very little conductivity was required for fracs in
ultra-low permeability formations, and that low-proppant concentration designs, possibly even exclusively
through self-propping of the rock, could provide sufficient conductivity for the fracture to not be the
bottleneck for production response. They published their findings in the 1997 SPE Paper "Proppants? We
Don't Need No Proppants".
Smaller companies (Independents) have been the main driver for the "Shale Revolution". Small
companies often have the upper hand in leasing mineral rights from landowners as their interaction with
landowners is generally more personalized. Shale production was hotly pursued by many small companies
resulting in a multitude of varied drilling and completion methods being implemented and tested across
multiple basins. These "laboratories" have resulted in continuous improvements and fostered economic
success. Some of the methods proved to be universal and are applied to all basins, while others vary and are
tailored to the nuances of each basin and in some cases, within a basin.
Additional joint industry projects, such as the Cotton Valley JIP and Mounds Drill Cuttings Injection
Project (Mayerhofer et al., 2000; Griffin et al., 2000) conducted in the late-1990s provided further
information regarding how fractures grow in various environments. These efforts helped to prove-up
direct fracture diagnostic tools such as tiltmeter fracture mapping and micro-seismic mapping (Wright
et al., 1998a, Wright et al., 1998b, Warpinski et al., 1998) with measured locations of core-throughs in three
dedicated offset wells, while the direct diagnostic information also served as dimensional calibration
(fracture length, height and overall width, conductivity and complexity) for fracture propagation models.
These propagation models were previously just calibrated with net pressure measurements (Nolte and Smith,
1979; Nolte, 1979; Crockett et al., 1986; Shlyapobersky et al., 1988), and now further constrained with
directly measured fracture dimensions (Cipolla and Mayerhofer, 1998; Weijers et al., 2005), thus helping to
create more reliable fracture propagation models for continued fracture design optimization.
Utilizing the lessons learned from these effort, pioneer George Mitchell's company Mitchell Energy
relentlessly pursued natural gas production in a reservoir with a permeability that was orders of magnitudes
lower than the Cotton Valley Sandstone (Steward 2007). Mitchell Energy's Barnett Shale slickwater
jobs with lower proppant concentrations and even larger slickwater volumes first cracked the code for
commercial shale gas development.
At that time, a fracture diagnostic technology called micro-seismic mapping had just been
commercialized to allow insights into why frac'ing in shale might work. We call the fracture map in Fig. 3
"The Frac that Changed Everything". The Frac that Changed Everything shows for the first time a widely
complex fracture system with multi-directional fractures, creating a one mile long and 1,200 ft wide area
that Fisher et al. (2002) coined as the fracture "fairway". This complex network was caused by a preferred
fracture plane that was roughly orthogonal to pre-existing natural fracs. The low-viscosity slickwater fluid
enabled opening of both orthogonal planes effectively, allowing production contribution from a greatly
increased surface area of this orthogonal fracture system.
The map in Fig. 3 is well documented in SPE Papers 77441 & 90051 by Fisher et al. Micro-seismic
fracture mapping always exhibits a general location uncertainty, as micro-seismic events are tied to planes
of weakness that are caused by pore pressure changes from frac fluid leakoff, so the image of the hydraulic
fracture system is always expected to be a bit "fuzzy" as it is a measure of shear failure events associated
with the pressure disturbance of a frac system and not necessarily the fracture system itself. However, in
most conventional plays the fracture system is observed to be simple with little or no orthogonal complexity,
and thus more of a linear fracture structure.
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Figure 3—Map of "The Frac that Changed Everything", showing micro-seismic events
associated with the first complex fracture system with orthogonal fracture orientation
confirmed by five intersected and "killed" wells (Fisher et al., 2002 and 2004).

This observation of increased complexity was corroborated with surface tiltmeter mapping, which also
showed fracture growth / complexity in two orthogonal orientations, and additionally in a vertical direction
associated with layer debonding. Direct proof of the existence of a complex network came from five offset
wells, also shown in Fig. 3, for which production was temporarily "killed" by the complex propped frac
system intersecting all five wells. Once returned to production, these five wells also received a production
boost from the complex fracture network created from the treated well intersecting with each well.
Quickly following this effort in vertical wells, Devon Energy acquired Mitchell Energy and eventually
combined this complex fracture strategy with multi-stage fracture treatments in horizontal wells. Very few
basins have the unique stress conditions of the Barnett where present day fractdure growth is orthogonal to an
older set of natural fractures that creates the necessary fracture complexity / contact area to allow commercial
gas production. However, multi-stage frac'd horizontal wells allow the creation of fracture complexity and a
large reservoir contact area even in the absence of the unique stress conditons in the Barnett. The completion
industry worked hard to create more fracture complexity, along with advances in drilling and completion
tools technology (see next section).
As shown in Fig. 4, during the Shale Revolution a larger proportion of all US wells drilled were also
completed with hydraulic fracture treatments, reaching 80% of all drilled oil wells and 90% of all drilled
gas wells in recent times. This extends a long industry trend in the United States for hydraulic fracture
treatments in an ever-increasing number of wells.
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Figure 4—Number of frac'ed wells in the United States, as separated into oil and gas wells.

Fig. 5 shows historic fluid volume data for frac jobs over the last seven decades, mostly gathered by
Gallegos and Varela (2015) of the USGS. It shows the rapid focus on increased frac volume, taking off in
2003 with larger averages for fluid volumes in horizontal gas wells. These unconventional frac volumes left
the "Massive Hydraulic Fractures" (MHFs) from the 1980s in the dust. Soon after frac volumes in horizontal
gas wells increased, the volumes in horizontal oil wells also rose as large-volume high-rate slickwater jobs
became the norm in the Williston Basin (Pearson et al., 2013; Griffin et al., 2013) and the Permian Basin.
Now, as shown in Fig. 5, the average water volume in liquid rich basins is about 250,000 bbl of water per
well, with an increasing volume provided by recycled produced water (Olson, 2018).

Figure 5—Historical changes to average fracture treatment fluid volume by well.

Three major trends have occurred throughout the North American proppant market. First, a similar job
increase is occurring for the proppant mass pumped in every unconventional well, generally even outpacing
the increase in fluid volume (average proppant concentrations are slowly increasing with a greater use of
high-viscosity Friction Reducers). In recent years operators in various basins have created proppant mass
records, with some wells exceeding the proppant mass of a 100-car unit train, i.e. exceeding 20 million
pounds of proppant per well. On an industry scale, Fig. 6 shows the rapid increase in total proppant mass
used. Average 2017 proppant volumes exceeded 10 million pounds of proppant per well. Between the start
of the Shale Revolution and 2017, industry use of proppant grew about 40-fold by mass, and it is still
growing rapidly today.
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Figure 6—Historical changes in the US and North American sand market.

According to Olmen et al. (2018), the explosive growth in proppant use per well can be directly related to
the overall growth in the amount of proppant supplied to the North American hydraulic fracturing industry.
In 2012, roughly 76 billion pounds of proppant (frac sand, resin-coated and ceramic) were supplied to North
America. In 2017, the proppant industry set a record of 167 billion pounds and is expected to provide over
200 billion pounds in 2018.
Secondly, during this rapid growth, overall proppant quality has deteriorated – use of higher-quality
proppants such as Resin-Coated Sands (RCSs) and ceramics have been marginalized and now the industry
is focusing on even lower-cost locally-sourced, poorer quality sands (Fig. 7). In general, larger proppant
volumes more than make up for poorer proppant quality in the production response of horizontal shale wells.
A typical horizontal well has hundreds of fracs flowing into the wellbore, meaning that each frac carries
an even smaller proportion of the total hydrocarbon flow. This dramatically lowers the need for fracture
conductivity.

Figure 7—Historical changes in the US and North American proppant market,

with sand's increasing share of the market at the expense of RCS and ceramics.

A third change in the proppant market is the change in the distribution of the proppant mesh size. As
shown in Fig. 8, the industry is moving toward a preference for 40/70, and more recently 100+ mesh
proppant. This change ties together with the preference for low-cost locally-sourced sands.
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Figure 8—Historical changes in the US and North American proppant market, with smaller
proppants such as 40/70 mesh and 100 mesh proppants taking an increasing share of the market.

The recent industry change to locally-sourced 100-mesh sand, led by operators in the Permian Basin, is
the most recent change in an overall reduction of job cost. Production data from wells where this proppant
has been used do not yet provide a long-term indication of production response. As such, the jury is still out
whether locally-sourced sands provide a viable long-term production alternative for shale wells.
Still in line with the general fracture treatment design changes that made the Barnett Shale tick, the
technology focus in fracture treatments in current US shale plays has been on creating ever-larger and ever-
denser frac fairways through the following gradual completion changes (see Fig. 9):

• Larger fracture network:

◦ Longer laterals (Fig. 9a) to access more rock and hydrocarbons at a lower incremental cost.
Average lateral lengths are at 2 miles in the Williston Basin and heading there in most other
basins. The State of North Dakota set standard 1280 acre Drill Spacing Units (DSUs) in April
2010, helping the industry to limit its surface footprint to about 0.5% of land use. Recently in
some areas of the Williston Basin, this has been extended to 1920-acre DSU's further reducing
the footprint. In other states these requirements are less stringent, but the industry is constantly
striving to drill longer wells where that is possible, as shale well economics align with a smaller
footprint;
◦ An increase in proppant mass and fluid volume (Fig. 9c-d). In terms of changes per lateral foot
between 2010 and 2017, fluid volumes increased from 13 to 33 bbl/ft while proppant mass
averages increased from about 500 to more than 1,600 lbs/ft;
◦ Fewer chemical additives, reduced additive volumes, and a move to Friction-Reducer (FR)
slickwater (and recently high-viscosity HVFRs), as well as a general change to cheaper, more
local and lower-quality sand. Overall, the industry uses fewer chemical additives, and smaller
additive volumes to place a pound of sand in formation.
• Denser fracture distribution:

◦ Higher stage count (Fig. 9b) and an increase in stage intensity. Average stage count has increased
to about 40 stages per well, partially due to longer laterals, but also due to higher stage intensity.
Average stage spacing was about 350 ft/stage in 2010 and has been reduced to about 200 ft/
stage in 2017;
◦ Higher pump rate (Fig. 9e), increasing rate per lateral foot from 0.16 to 0.42 bpm/ft from 2010
through 2017 to improve diversion along the lateral. This change has also caused frac fleet sizes,
measured in horsepower, to increase rapidly;
◦ Changes in perforation strategy toward extreme limited entry with fewer perforations and
more clusters/fracture initiation locations per stage for better overall fracture distribution.
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Operators also group perforation clusters along the lateral in similar type rock (enabled by MWD
measurements) to create more equal fracture growth from each perforation cluster and "leave no
rock behind" (Weddle et al., 2017, 2018; Raterman et al., 2017; Ugueto et al., 2016; Somanchi
et al., 2016);
◦ Diverter technology. The industry has developed a range of chemical additives and particulates
to temporarily block flow into sub-sets of stage clusters, aiming to achieve a more equivalent
distribution of fractures and surface area complexity (Van Domelen, 2017; Ugueto et al., 2015).
Public access to well drilling and completion information has unleashed "big data" multi-variate analysis
(MVA) as a scoping tool that can be used for production optimization or minimization of the cost to produce
a barrel of oil ($/BO) or barrel of oil equivalent ($/BOE). These statistical tools (Mayerhofer et al., 2017)
have helped the industry on its path to higher well production and more economic wells through the changes
highlighted in Fig. 9. Also, massive fracture diagnostic projects such as those documented by Haustveit et
al. (2017), have also helped to close the loop on calibrated fracture growth and reservoir modeling. Each
region will have its own unique set of optimum paramters, but several general trends hold across the plays.
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Figure 9—Recent "big picture" completion changes, reported on a per-well basis, in ten liquid-rich plays.

Drilling and Tools Technology Advances

Two other technology efforts have combined with hydraulic fracturing to create a critical combination for the
success of shale development: horizontal drilling and "staging" – the ability to deliver a fracture treatment
to a focused sub-section of the horizontal lateral and repeat this process numerous times to effectively treat
the entire lateral.
As shown in Fig. 10, through the last 15 years of the Shale Revolution an increasing number of wells
have been horizontal wells. During the early years of the Shale Revolution, most drilling efforts focused on
gas wells following the commercial development of the Barnett Shale. After 2010, drilling activity focused
mostly on liquid-rich shales.

Figure 10—Number of frac'ed wells in the United States, as categorized into vertical and horizontal wells

While some of the early horizontal wells were completed with single-stage "Hail Mary" fracs or
completed in multiple stages with sand plugs that were hard to place, the ability to easily place subsequent
fracture stages in smaller subsections of the horizontal well became a major differentiator, as improved
diversion helped to create more fracture surface area. Tool companies perfected ball and sleeve tools, where
a ball would be dropped at the end of a frac stage to close access to the interval that was just treated while
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opening a fresh interval for a subsequent fracture treatment stage. Initially, fast adoption of the ball-and-
sleeve setup was critical to improve pumping efficiencies for service companies especially where single well
development was used to prove up a shale play. In parallel, wireline service companies improved plug &
perf tools and procedures, also to improve stage isolation effectiveness. This technology ultimately showed
higher production response through the creation of significantly more fracture initiation points and became
more efficient from a frac time perspective as the industry moved to multi-well pads. Further innovations
on the wireline side, such as digitally addressable perforation shots, guns providing similar hole sizes from
a concentric gun, pump down efficiency of wireline tools, system reliability, etc., were critical to make
the plug–perf–frac–repeat sequence in horizontal wells a massive success and the completion technique of
choice today.
In addition to changes in completion technology and designs, drilling technology has changed rapidly
during the Shale Revolution, enabling significant cost savings through a series of technological innovations.
Where fracs have become bigger and denser, drilling has predominantly become faster and cheaper.
A few innovations that stand out on the drilling side are:

• Mud motors, allowing higher penetration rates due to significantly higher rotation rates than
can be achieved with rotary drilling. In addition to enabling the drilling of "the curve", the
section where the well changes from a vertical to a horizontal orientation, mud motors are used
throughout the vertical and horizontal sections of the well to increase penetration rates compared
to conventional rotary drilling methods. In addition, higher penetration rates have been assisted
by more horsepower and higher pressure drilling fluid systems which allowed more horsepower to
be transferred to the drill bit.;
• PDC (Polycrystalline Diamond Compact) drill bits that are much more durable, sometimes
allowing the drilling of the vertical and lateral section in a single trip. In combination with mud
motors, these faster-rotating bits also allow for a faster rate of penetration and longer bit-life;
• Measurement-While-Drilling (MWD), allowing for real-time log measurements to determine
where to steer the wellbore to "land" and stay in the hydrocarbon-rich formation of interest;
• Monobore well designs and completions which allow skipping on a drill bit changeover in some
(shallower) target zones such as the Niobrara and Codell in the DJ Basin. This enables significantly
faster drilling and lower well costs; and,
• Walking Rigs which allow drilling rigs to easily move short distances to the next well without
rigging down or laying down pipe on multiple well pads, saving time and moving cost.
Overall drilling time has decreased from an average of 35 days to 22 days (see Fig. 11), while Measured
Depths (MDs) have increased from 14,000 to 17,000 ft between 2010 and 2017, mostly due to increasing
lateral lengths. Overall penetration rates have increased from about 400 ft/day to about 1,200 ft/day, a
threefold increase in drilling speed in just 7 years.

Figure 11—Average number of days to drill a well in various basins in the US (courtesy Coras Research).
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Efficiency
The amount of time the frac industry spends pumping has dramatically increased over the last few decades.
Pumping efficiency, or the percent of time spent pumping each day, is up to about 25% for the industry.
On average for the industry in the 1990s, our "guesstimate" is that equipment was utilized for pumping for
maybe 5 – 10% of the time. There were exceptions on the upper side to 50+% for easy, low-pressure pumping
per day from a central location in the South Belridge Field, California, but we have also experienced jobs
where pumping took less than 1% of all time. As recently as 2008, many companies prohibited nighttime
pumping operations.
The Shale Revolution put an end to low pumping efficiencies. Pumping service companies can only
survive if they put their equipment to work. Paying back expensive frac equipment is easier if you can spread
the fixed costs over more pumping hours. In the process of increasing efficiency, oil and gas operators have
secured a massive discount per unit pump time. Pre-frac diagnostics while the pumping equipment is on
location are a thing of the past. If pre-frac diagnostic information is needed, the information is typically
acquired using Diagnostic Fracture Injection Tests (DFITs), conducted before the frac equipment gets to
location.
Over the last 15 years the focus has been on increasing equipment pump time. Modern frac fleet
equipment has changed substantially from before the Shale Revolution, all to increase pumping efficiencies
and to keep equipment working (see Fig. 12). In North America, frac equipment typically runs 24/7,
zippering between multiple horizontal wells. Well count per pad is increasing, limiting time lost for moving
equipment. Average pump rates in liquid-rich US basins have increased from 57 bpm in 2012 to 77 bpm in
2016, increasing the achievable stage count and the proppant mass placed in a well every day. The photo
below of a modern frac location in the DJ Basin shows this focus on efficiency. Redundancy on location
minimizes downtime, for example through a warehouse trailer that carries common maintenance parts.
Boxed sand delivery helps mitigate dust and noise, while it also improves sand logistics.

Figure 12—Aerial photograph of a modern frac operation in the DJ Basin with a variety of efficiency-
gaining improvements highlighted. Photo courtesy of Bayswater Exploration & Production
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Understanding Downtime
Modern operators and pumping services companies take considerable effort to understand how time is spent
on a frac location. In some companies, Field Engineers track how operators, pumping companies and other
third parties spend their time on location by the minute. Rather than assigning a loser for every game of
musical-chairs-downtime, tracking downtime helps identify bottlenecks and areas for improvement. In Fig.
13 we show a Sankey diagram with categories that take away from pumping 24/7.

Figure 13—Sankey diagram of all efforts associated with frac operations.

The total time spent on pumping by a typical US frac crew is now about 25%, with some crews pumping
up to 50% of all time.
Typically, a few days a month are lost due to scheduling inefficiencies and equipment maintenance in the
yard. While "white calendar" days are virtually absent during the current cycle, it is possible to lose days
due to scheduling inefficiencies, delays or finishing a pad early. In addition, essential tasks occur on location
(Non-Pumping NP time), such as rig up / rig down, scheduled maintenance, well swaps, etc., that moves
well completion forward but does not add to pump time. Finally, some time is lost to 3rd party and pumping
company downtime.
It is generally possible to break that downtime into a variety of categories. What we often see is that most
downtime on a frac location is due to the "W's" – Wireline, Water, Wellhead and Weather. In addition, the
pumping services company is responsible for some downtime, generally associated with pump maintenance
or blender swaps.
The pumping services industry has work to do on pumps and blenders. Pumps that were sidelined during
the downturn are coming back, and new crews are often started with fewer than the ideal number of pumps.
At the same time, overall pump rates are increasing while the industry further moves to slickwater and finer
and more abrasive sands.

Service Company Efficiency Tasks

Most companies take pumping efficiency very seriously, with a focus on safely increasing pump time in
any possible way. The frac industry can only continue to grow that rapidly if we can pump an increasing
fraction of the time.
The pumping companies are working on a variety of items to minimize their downtime. First, more
redundancy on location. In general, providing redundancy is money well spent as downtime quickly adds up
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to become a major cost for conducting business. Efforts to create redundancy focus on: (1) Store common
parts that fail on location in a warehouse trailer; (2) Stage extra horsepower units and a spare blender near
location; (3) Stage other critical equipment, such as a second forklift for proppant logistics; and, (4) equip
blenders with a second discharge pump to minimize blender swaps.
Fig. 14 shows a historic overview of the total hydraulic horsepower (HHP) available in the industry,
showing a 20-fold increase in HHP in the last 15 years of the Shale Revolution. Fig. 15 shows how the total
amount of HHP is increasing for each frac crew as frac jobs are being pumped at higher rates and pumping
more and poorer-quality (higher-abrasive) proppant.

Figure 14—Industry changes in total available horsepower across all US frac fleets.

Figure 15—Recent increases in average hydraulic horsepower per US frac spread.

Another typical pumping services company task to reduce its non-pumping time is to expedite rig ups
and rig downs. A made-for-purpose iron truck can significantly add to a speedy rig-up and rig-down.
As the industry has grown massively, especially with respect to sand mass (40x during the Shale
Revolution), the industry has had to focus on streamlining logistics. This industry change has sparked a new
business line of last-mile sand delivery through a boxed proppant solution. While boxed sand delivery also
helps to reduce maintenance through dust control and minimizes noise, its primary benefit comes from
streamlining proppant delivery to location.
Finally, a focus on minimizing wear and tear on equipment is key considering the use of larger quantities
of more abrasive proppants that are pumped in conjunction with high-rate and slickwater jobs. Once again
as an example at the pumping company, some of the following ongoing efforts to address this challenge:
(1) Pressure monitoring to boost fluid-end life expectancy and provide targeted and timely valve & seat
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replacements; (2) Vorteq missile development to keep proppant out of fluid-ends through separate clean and
proppant-laden slurry flow through non-moving parts in the manifold (Gusek et al., 2015).

Minimizing Downtime is a Joint Effort

In addition to what can be done by the pumping services company, minimizing downtime is a team effort
for all parties on a frac location.
There are many possible considerations for other service providers and operators. Many service
companies are working to provide more equipment redundancy or decrease the possible impact of
human error. We all try to coordinate preventive maintenance through syncing re-heads, valves & seats
replacements and wellhead greasing.
In addition, operators can help to minimize single-well projects, as multi-well operations decrease waiting
on essential non-pumping operations by allowing service swapping on wells without the necessity to wait
on one another. Also, well swap time can be improved through utilization of new quick-connect systems,
while continued pumping becomes easier to do through staggered personnel (frac crew, supervisor, engineer
and consultant) swaps.
Finally, it is important that all parties on location are incentivized to safely place as many stages or as
much proppant every day. This can often be achieved through pricing for pumping services, for example
through an incentive of discounting stages past a specific daily goal. The rate of safely conducted fracture
treatment stages greatly increased once the proper financial incentives were negotiated between this operator
and pumping services company.
Fig. 16 shows how technology and efficiency gains have benefitted frac crews across the United States.
These joint efforts have helped them to pump significantly more stages every year, as well as pumping more
proppant every year.

Figure 16—Recent industry trends for growth in stage count and proppant throughput per crew.

That increase in frac stage and proppant intensity, in combination with faster drilling, has tilted the balance
between drilling cost and completion cost toward completions, with completion cost now representing about
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40 – 50% range and growing. The importance of this statistic lies in the fact that completion costs are
increasing as a fraction of total well cost over the last few years.
This has caused a dramatic change in the number of drilling rigs per frac crew (see Fig. 17). This is similar
to observations by Enercom (2018), who report a total US Effective Rig Count, a productivity measure per
rig, with a multiplier over regular rig count that has increased by about a factor 3 since the start of 2014 and
appears to be on pace for needing one frac crew to support a single horizontal drilling rig. Spears &
Associates also anticipate an average of one rig per frac fleet for the United States in 2020. The productivity
gains are from different frac designs and the fact that rigs are drilling more wells in a fixed period.

Figure 17—Number of rigs per frac crew, indicating faster drilling and higher-intensity frac'ing, both
over the last few years and with a macro-view estimate provided by Spears & Associates (2018).

Better Wells. Cheaper Oil & Gas

Ultimately, economics matter to drive permanent changes in our choices of energy sources. From
2010-2016, well production in liquid-rich plays, as shown in Fig. 18, has increased by about 75% per well.
This is partly due to longer laterals but is primarily driven by the increased fracture density we have created
through stage intensity, higher fluid injection rates and increased proppant and fluid loading per lateral foot.
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Figure 18—Recent changes to average well productivity in the first 365-days of production.

One of the amazing feats of our industry is that, despite the higher frac intensity and the longer wells,
overall drilling and completion costs have been reduced substantially. According to Coras Research, the
average of well costs in four major liquid-rich basins is down to about $5.1 million in 2017, from $7.2
million in 2012. While this change was triggered by the 2015-2016 downturn, it demonstrates the resilience
and innovation of the US shale industry.
Overall cost of frac jobs is down substantially over the last few years. Around 2015 the industry changed
to designs with cheaper sand and lower gel loadings with cheaper fluid systems to cut cost through the
industry downturn. Since ceramics was used in some basins at the start of the Shale Revolution, job cost
calculated on the basis of an all-in proppant cost reduced two- to three-fold in 2015. All-in job cost per
pound of proppant stabilized in 2016 as frac jobs became bigger with more proppant and fluid. Overall cost
per pound of proppant placed, however, remained low as the pumping industry extended low prices in
exchange for volume. As the frac market improved again in 2017, all-in cost per pound of proppant
gradually increased again. However, all-in job cost per pound of proppant never recovered back to 2014
levels. The most recent change to pump more locally-sourced sand in the Permian Basin is causing all-in
job cost per pound of proppant to be trending downward again in 2018.
As shown in Fig. 19 and Fig. 20, the 75% increase in 365-day production and 30% decrease in well cost
have helped our industry to reduce $/BO or $/BOE by more than 60% in just 5 years. At the bottom of the
table in Fig. 19 we define $/BO as all drilling and completion cost (no long-term lifting cost) assigned to
just the barrels produced in the first year. In 2012, the cost to bring a barrel of shale oil to the surface was
about $128/bbl in the first year of production. For 2017, that average cost per bbl is down to just $46.
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Figure 19—Recent changes to frac designs, average well productivity and general well economics in $/BO.

Figure 20—Recent progression in early-production well economics in $/365-day BO in four US liquid-rich areas.

Through the 2015-2016 industry downturn, service companies have learned the hard way to become
more efficient in what they do. Their all-in price per downhole placed pound of proppant has been reduced
by a factor of three to five, thus providing their oil&gas operating customers with a massive and lasting
volume discount.
This proppant volume discount, in turn, has helped operators to further reduce their $/BO(E) and improve
shale oil's competitiveness with oil from other sources, especially those from capital-intensive offshore oil
developments. And those reductions in the cost of lifting a barrel of oil from a shale reservoir in turn have
led to massive consumer savings.

Increased US Shale Production

Cheap and abundant energy is provided to the world through fossil fuels. A growing portion of this mix is
provided by hydraulic fracturing of shales.
The Shale Revolution has resulted in a dramatic increase in production, increasing US production beyond
"Peak Oil" production in the 1970s. This higher production is shown in Fig. 21 and Fig. 22. US energy
production has soared, and the US is now the #1 natural gas producer in the world, with over 50% of this
from shale. The US is also the #1 liquid fuel producer (oil plus natural gas liquids), with a contribution of
over 50% of this from shale. The dramatic changes were all achieved through the "invisible hand" of private
capital, market forces (winners & losers), advancements in frac'ing, and a much smaller drilling "footprint"
than conventional production.
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Figure 21—100-years of US oil production (EIA).

Figure 22—Historical shale oil and gas production by major shale play in the United States
(EIA). US shale production represents 50% of US oil production and 60% of US natural gas
production, or about 6% and 10% of world oil and gas production, respectively.

As shown in Fig. 22 (bottom), the natural gas production from the Barnett shale proliferated in the early
2000s following Mitchell's quest to extract it directly from the source rock. This effort of horizontal drilling
combined with high-intensity stage frac'ing was quickly copied in other gas shales such as the Marcellus
Shale. These shales now produce more than half of the US’ natural gas.
Liquid-rich shales were a tougher nut to crack, but innovative frac designs in the Bakken, Eagle Ford and
Permian in 2008-2012 resulted in production improvements that caused Shale Oil to provide more than
50% of the current US oil production (see top of Fig. 22). In addition, the energy provided by all frac'ed
wells in the United States provides more than 50% of all US Energy production.
These production gains, shown for each individual shale basin and major formations in the graph below,
are even more remarkable given the fact that newer wells now often represent infill drilling, which face
possible depletion or production interference from older wells.
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Conclusions
• The Frac industry has changed beyond recognition, growing 10-fold in horsepower in the last 15
years, 20-fold in yearly stages pumped and 40-fold in yearly proppant mass pumped.
• The Shale Revoluton has changed the world energy equation. Oil prices and natural gas prices
globally are far lower than they would be otherwise with the surge of US oil and gas production,
saving consumers well over $1 trillion per year.
• The environmental footprint of oil & gas production is shrinking and will continue to do so. Modern
shale development employs only a few percent of the surface area over a field for full development.
• Technological changes have resulted in a massive cost reduction to commercially produce a barrel
of oil. "Big Picture" statistical analysis supports these general frac design changes, showing the
benefits of a gradual industry move to "larger volumes", higher stage intensity and cheaper and
lower-quality proppant.
• Together, oil and gas operators and their service providers have used technology & innovation to
improve efficiencies. There is still room for further improvements.

Acknowledgments
Some of the data in this article was provided by Daniel Cruise at Coras Research, Michelle Stribling at
PropTester and Nancy Strabala at IHS Markit. We want to thank Jessica Franklin at Liberty Oilfield Services
for her help with some of the graphics. The authors would thank our colleagues at Liberty Oilfield Services
and Liberty Resources for their feedback and contributions.

SI Metric Conversion Factors

acre × 4.046 873 e+03 = m2

bbl × 1.589 874 e-01 = m3
cp × 1.0 e-03 = Pa.s
ft × 3.048 e-01 = m
°F (°F – 32)/1.8 = °C
lbm/gal × 1.198 264 e+02 = kg/cm2
psi × 6.894 757 e+00 = kPa

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