In a time of necessary capital discipline, the last place you want to experience production loss is with an unplanned outage due to equipment failure. According to recent data shared by Rystad Energy, unplanned outages are on the rise, globally.
Current projections indicate that the E&P industry stands to lose $8 billion in revenue due to unplanned outages. That’s billion with a B. Of course, there are several contributing factors that have led to this trend. Some are out of our control. While others are issues we can work to mitigate with a strong measure of success.
The sharp rise in unplanned outages since 2016 mirrors the production growth of U.S. shale in the same time period. As we all know, U.S. shale is both dynamic and difficult, presenting many production challenges. Which is where our expertise can come into play for you and your operations.
ESPs (electric submersible pumps) are frequently used in unconventional wells but require careful, strategic consideration. To get the best possible performance out of an ESP and avoid unplanned outages, producers can do the following:
When you’ve just spent $10-$12MM to drill and complete a well, it doesn’t make sense to delay payback by installing used production equipment. Used equipment has limited remaining useful life and virtually guarantees an outage and costly workover expenses. Pro-tip: a low-dollar, monthly ESP lease offer is a sure sign of used equipment.
Quality equipment installed poorly results in a short run. A flawless installation sets your well up for success and gives you the best chance at uninterrupted production. If you’re spending money with consultants to double check the work of your service company, you’re using the wrong service company.
During an outage, speed matters. Every day is lost revenue and operating expenses grow exponentially until the well is back online. Choose an ESP provider that shares your sense of urgency and has both the inventory and the personnel to react quickly.
Producers that focus on these three things will find their unplanned outages decreased resulting in more production, lower operating costs and increased cash flow.
Interested in learning more how Extract Production can help you create a plan to mitigate unplanned outages? Give us a call. We’re here to help.