Improving the bottom line in the Permian

Oilfield service companies are under continuous pressure to reduce costs. The global pandemic and weather crisis that impacted millions of Texans in February have presented challenging market conditions for service companies, resulting in lost revenue and missed operational targets. As a result, service companies are looking for cost optimization and increased equipment utilization to help improve their bottom lines.

Operating cost management has always been a top priority for oil and gas companies, but with these latest challenges that literally brought pumps to a standstill, it’s more important than ever to take a fresh look at operations, to find new ways to improve efficiency. Frac fleets are pushed harder year after year. Keeping up the relentless pace forces companies to scrutinize two important aspects of operation: pump utilization and maintenance downtime.

REDUCING MAINTENANCE

One operational pillar that will generate significant costs savings is reduced maintenance. When evaluating maintenance practices, valves, seats and packing all demand a closer look, as they represent one of the largest maintenance expenses on a frac site. Reducing costs related to fluid end maintenance and downtime is a natural area of focus. It’s more important than ever to increase the efficiency and reliability of frac fleets.

However, how to effectively lower operating costs and nonproductive time (NPT) is a constant challenge. Investing in new technologies that can deliver an improved ROI provides the answer. As companies leverage technological advances, they can achieve reductions in cost and NPT.

Seat costs. Recently, an oilfield service provider operating in the Permian basin sought to improve operational efficiencies on its multi-well pads. The Permian is notorious for pushing equipment to the limit, which increases consumables costs. Standard steel seats were wearing out quickly for this company. The provider was replacing seats every 80 hr when pumping 550,000 to 650,000 pounds of 100-mesh sand per stage at 8,000 to 11,000 psi. This dramatically increased the company’s materials and labor costs.

The company wanted to identify how it could stop pulling seats in the field. Replacing seats is one of the costliest expenses an oilfield service operator incurs, and also one of the most frustrating. There are also inherent safety risks involved with pulling seats.

NEW SEAT TECHNOLOGY

SPM™ Oil & Gas helped the company realize this goal by providing new seat technology—SPM™ EdgeX™ Carbide Seats (Fig. 1), which offered greater resistance to wear, cracking and washout, even with large particles. The field-proven EdgeX™ Carbide Seat demonstrated an average six times longer lifespan than conventional steel seats. The carbide-reinforced seats protect high-wear areas while fitting standard taper fluid ends, to eliminate the typical installation error sensitivity of other seats that cost time and money.

Fig. 1. SPM™ EdgeX™ carbide seats, which offer greater resistance to wear, cracking and washout, even with large particles, have an average six times longer lifespan than conventional steel seats in the field.

This patented seat sets a new standard by increasing seat life an average of six times and doubling valve life, compared to conventional valves and seats. Engineered with a systems approach to the frac site, this valve and carbide seat enables companies to push their frac fleets harder while significantly reducing valves and seat maintenance costs. The significant increase in seat longevity eliminates field change-outs and reduces expenses.

Field results. For this oilfield service provider in the Permian, the new seat produced substantial results and helped the company achieve its goal by lasting a remarkable eight times longer than the previous seats used. The carbide seats were run an average 655 hr, which provided 720% longer life than the previously used conventional seats that lasted only 80 hr. One of the carbide seats even ran 760 hr—believed to be the longest in North America.

In addition to scrutinizing maintenance costs and consumables, aligning with a service provider who understands your equipment and needs can help minimize NPT. The right service provider doesn’t just perform more intensive maintenance; the firm can help win contracts.

Case in point: an integrated oil and gas field service company in the Permian had a very tight timeframe in which to begin a new frac job in the basin and needed 17 frac pumps on-site and ready to pump at more than 12,000 psi with zero NPT. Otherwise, the service company would lose the job and potential for future work. All 17 pumps required inspections and replacement of all wear components, so they could head to the job site within two weeks—a process that typically takes at least 30 days.

SPM™ Edge Services teams from three locations joined together to ensure that the company met its deadline. A signature 13-point pump inspection, replacement of wear items, lubrication system inspection, required maintenance actions and a yard test were performed for each pump. The “all hands on deck” approach enabled these 17 pumps to be returned to the company in just 10 days, without sacrificing quality or shortcutting the engineered process. The company started the job on time and with no unexpected downtime.

CONCLUSIONS

The new challenges that oilfield service companies face right now are calling on them to re-evaluate their operations and dig deeper to find new ways to streamline and reduce costs. Maintenance and unexpected NPT are known to affect pumping hours and profits.

Because consumables are the single-largest expense for all frac service companies, and service providers’ capabilities and availability can differ widely, these are two areas where companies can likely identify cost-savings that actually strengthen their bottom lines. To maximize potential in the Permian, taking these types of measures to reduce costs and downtime creates a powerful competitive advantage.