Inside The Business Of Shale Diverters

Among the hottest trends in the shale industry, diverting agents can improve production with out increasing completion costs. These companies have experienced firsthand the rise—and the profits available—of biodegradable diversion material.
By Luke Geiver | May 02, 2017

Jamplast Inc., a raw plastic material and biopolymer developer and distributor, has two U.S. locations, each of them hundreds of miles away from the country’s most active shale oil and gas plays. But, since 2014, the company has been at the center of an emerging trend present now from Texas to North Dakota. Jamplast produces biopolymer-based diverting agent materials for oilfield services and exploration and production companies. Diverters, as they are often referred to in oil and gas speak, are used during the hydraulic fracturing process to plug holes or perforations and allow fluid flow to transfer past or be diverted towards other sections of a well bore. Over time, heat and pressure downhole hydrolyze the diversion material and perforations that had been plugged with the diverting agent, allowing for the perfs to flow freely. Without diverters, mechanical operations involving plugs are required.

 As John Moisson, president of Jamplast can attest, diverters have become extremely popular since the market downturn began in 2014. While many oilfield services and equipment vendors were financially struggling the past few years, Moisson and his team were trying simply to keep up with customer demand. Since first entering the oilfield diverter manufacturing and distribution market three years ago, Jamplast has created an entirely new division for its diverter-based services, separate from the raw plastic services it provides for food packagers and others. In those three years, the company has shipped specialized diverter product to Texas, North Dakota, Canada and the Middle East. “We’ve had a really good acceptance in the market for these degradable diverters,” Moisson says.

Listen to nearly any of the investor updates provided by operators targeting shale oil or gas resources the past three years and it is easy to see that Moisson is right. From the Bakken to the Delaware to the Marcellus, operators who were or still can tout improved completion designs that generate increased production without significant cost increases have typically had one thing in common: the use of biodegradable diverting agents.

Now, as the shale industry is ramping up production and activity due to stabilized oil prices, Moisson and others who stayed busy during the downturn by supplying diverters—a downhole alternative cheaper, more efficient and more flexible—must face a new reality: the diverting business could be set for a boom.

Mastering The Art Of Fluid Dynamics
The use of biodegradable diverters in shale wells today is a combination of equal parts science experiment and proven formula. Moisson’s team can custom design its material into different-sized-beads or flake consistencies. In most cases, clients prefer to have packages delivered directly to a well site or a supply house with a clearly marked company logo on all diverter packages. No matter the markings, there are several use-cases popular in the field today. In most cases, a diverting agent is used to create a better fluid-flow scenario downhole. When a well is fracked, often a small percentage of the perforations made in a well bore will receive most the fluid and sand mix pumped into the well. On a 30-stage frack, Moisson says, you may have 10 perf holes that are taking 70 to 80 percent of the water and sand. Diverting material can be pumped in between fracks to minimize the unevenness of fluid flow by temporarily plugging certain perf holes to allow others to receive greater volumes of fluid. “You don’t need mechanical clean-outs. It is a very efficient way of controlling fluid dynamics,” Moisson says.

Brad Todd, a 30-year industry veteran who formed Completion Science LLC in 2012 out of Duncan, Oklahoma, knows very well the impact of diverters. Todd also stayed busy during the downturn due to work requests for diverting materials and designs. “One of the things we got busy with during the downturn was people using diverters on wells that weren’t fracked very well during initial fracture procedures,” Todd says. With low oil prices pinching operating budgets, many operators wanted to refrack wells to gain production—without the cost of drilling a new well—and diverters allowed them to do so without spending on mechanical operations and clean-outs. Using diverters, operators could section off previously perforated areas of the well, run new fractures into the well and pump new sand fluid mixtures downhole.

Along with refracks, Todd says, operators quickly learned that diverter materials can be used during new completion procedures to improve the fracture network near the well bore through better sand retention and placement. The interstage diversion techniques are largely responsible for greater production totals that have been reported by operators in the previous quarters.

For those operators looking to reach the toe section of a wellbore too long for coiled tubing, diverter agents can be used to frack the furthest, hard-to-reach areas of the horizontal. And, if an acid job is necessary, biodegradable diverters can be pumped to plug sections that are not to be treated with the acid mixture, Todd says. “They will drill the lateral longer than they feel they can get to, and then they will use diverters to frack the long part of the well,” he says. “The diverter has the mechanical competency to bridge and hold different pressures.”

On spacing units that will have multi-well pads with several wells, operators are now looking to diverters as a length limiter on perforations that could impact neighboring wells. “Here lately,” Todd says, “diverters have been used to minimize the frack hits where there is a risk of fracturing into an existing well bore.”

Diverter Specifics
Despite the proven positives of diverters, clients of both Moisson and Todd are always asking for tweaks. At his lab in Duncan, Todd and his team are testing new biodegradeable materials or mixes based on client requests. Todd will test his own formulas or others provided by a client. Moisson is doing the same. The material can be made in many sizes but the 4 to 8 mesh sizes are most popular. Moisson estimates it takes roughly six pounds of diversion material to plug a perforation.
When his team receives an order from the plastics industry, clients typically give Moisson’s Indiana-based team three to five days leniency to receive the material. “Oil clients will give us an order and they want it the next day,” he says. Last year, Jamplast invested in a hotshot logistics truck and a 32-foot gooseneck trailer to deliver material across the U.S. The truck has been to nearly every part of every North American shale play, Moisson says.

Duncan is also expanding. This summer, he will hire more chemists and lab techs. Clients are starting to request testing on other materials that can degrade downhole over time, including tools that haven’t yet been designed to degrade. Some clients are even looking to Todd’s team to find materials that will expand downhole.

The key parameters both Jamplast and Completion Science start with are downhole temperatures and pressures. The temperature downhole will help determine the chemical make-up of a diverting material. Operators will choose varying size or form of diverting agent based on pressures. In some cases, beaded diverters are too large for pressure pumps and they need to be used on an isolated pump. Both Todd and Moisson say they have been on the well site during a frack job involving a diverting agent. “As soon as it [the diverting agent in the fluid] hits bottom hole you will see a pressure response,” Todd says on the amount of time it takes to see the impact of a diverter downhole.

With their respective client lists growing and staff numbers increasing from necessity, Moisson and Todd both speak with enthusiasm about the future of biodegradable diversion technology and their place in providing unique material and know-how to the evolving shale industry. “There is a lot of opportunity for material science to make completions cheaper, simpler and more effective,” Todd says. “Looks like we are going to stay pretty busy.”

Author: Luke Geiver
Editor, North American Shale magazine