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Chevron's ( CVX ) triple-frac cuts well completion time by 25%

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Technique reduces costs per well by 12%

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Triple-frac requires 60% more water and sand per day

By Sheila Dang

HOUSTON, April 9 - U.S. oil major Chevron ( CVX ) plans

to increase the use of a technique that allows it to fracture

subterranean rock in three wells at a time in the Permian basin,

the company told Reuters, in an effort to cut the time and cost

of producing oil.

Chevron's ( CVX ) expansion of the technique, known as triple-frac,

comes as the second-largest U.S. oil producer expects to

continue growing output in the Permian, the biggest U.S.

oilfield, even as it begins to slow spending in the basin.

The shale oil revolution in the United States has been

driven by technological advancement. The widespread deployment

of hydraulic fracking, which involves drilling wells and

injecting sand and water into them to fracture rock and extract

oil and gas, made previously uncommercial fossil fuel deposits

held in shale rock profitable in the late 2000s.

Chevron ( CVX ) began employing triple-frac for the first time in

the Permian in March last year. This year the company plans to

use it on 50% to 60% of its wells in the basin, up from 20% last

year, Jeff Newhook, a completions operations manager, told

Reuters in an interview.

The extent of Chevron's ( CVX ) planned deployment of the technique

to new wells has not previously been reported.

Fracking three wells at once allows Chevron ( CVX ) to complete each

well and bring them to production in 25% less time, Newhook

said, which translates to a 12% reduction in costs per well.

"What's really in it for us is a more efficient use of

capital and a better return on our investment," he said.

Fracking two wells at once has grown in popularity as oil

producers look for efficiency, but fracking three or even four

at a time remains a niche strategy, said Thomas Parambil Jacob,

senior vice president at consultancy Rystad Energy.

Companies that can complete wells more quickly have an

advantage over competitors, particularly in shale fields, where

oil production quickly decreases over time, said Hugh Daigle, an

associate professor at University of Texas at Austin's

department of petroleum and geosystems engineering.

Shale producers have continued to innovate over the years,

learning to bend drill bits horizontally and drill longer

distances. Recent innovation has added artificial intelligence

to process drilling data in real time for better results.

Triple-fracking requires the same amounts of sand and water

as fracking one well at a time, but uses them more quickly,

meaning Chevron ( CVX ) needs 60% more water and sand per day when using

the technique, Newhook said.

That creates a logistical challenge for sand and water

supply, with more than 10 trucks arriving per hour to deliver

sand to the well pad.

The company has also begun fracking three wells at a time in

another shale field, the Denver-Julesberg basin in Colorado,

Newhook said.

Chevron ( CVX ) uses mostly electric-powered equipment for

triple-fracking, which consumes 50% more power per day than

fracking one well at a time, he added.

Triple-frac also requires more capital spending upfront to

have enough wells drilled in advance, Daigle said.

Chevron ( CVX ) hit production of 1 million barrels of oil

equivalent per day from the Permian in December and aims to

increase output by about 10% this year, CEO Mike Wirth has said

previously.

After this year, Chevron ( CVX ) expects Permian production growth

will begin to slow as the company focuses on generating free

cash flow.