​Paramount increases 2017 capex in part on the strength fracking advances

Image: Paramount Resources

Producers that are determined to continue growing aren’t waiting for floundering oil prices to improve but are pushing hard on fracking technology to improve production results and free cash flow.

Stronger production as a result of better frack design has, in part, led Paramount Resources to increase its 2017 capital program to $385 million, from an original $325million.

Some of the more recent advances in fracking technology include work by Encana, which recently announced it is applying its “Cube” approach to simultaneously fracking multiple stacked pay zones in the Montney—a practice it migrated from the Permian Basin in Texas.

Downhole tools continue to diversify and improve, with Packers Plus growing its cemented hybrid completions in Canada. Service companies are rolling out new frack fluids. And diversion materials are getting a lot of attention as a way to improve stimulations performance during infill drilling.

Paramount’s updated budget includes additional capital for completion technology that is expected to further strengthen well performance and generate higher returns in its Karr-Gold Creek area, where Paramount produced 10,000 boe/d of its 16,163 boe/d Q1 total production.

The Karr program is a 27-well horizontal Montney drilling and completion program that started in mid-2016.

“These wells have been designed with longer horizontal laterals of approximately 3,000 meters, higher intensity completions, tighter frack spacing and different completion fluids compared to prior years,” the company said in a statement.

Paramount is also taking this fracking approach into its Smoky/Resthaven area, where it is drilling a new Montney with a lateral length of approximately 3,000 meters, using slickwater completion fluids and approximately 70 fracture stages and a proppant loading of approximately 2.4 tonnes per meter.

“Total estimated costs for this well are approximately $13 million, as this single well pad will not benefit from the cost synergies of multi-well pads,” the company said.