While additional reserves can generally be accessed by drilling a higher total number of wells within an unconventional development, decreased productivity due to increased well density can lead to diminished economic returns.
The objective of this work is to provide an optimal development plan with maximum Net Present Value (NPV Max) considering well spacing density in any given drilling spacing unit (DSU).
NPV Max development optimization is a multi-step workflow integrating physics-based and data analytics technologies as follows:
1. Decline curve analysis is conducted using machine-learning techniques to rapidly derive individual well oil EUR on large public data sets at a basin-wide level.
2. Analog well selection criteria, including "like-rock" mapping is applied to focus analysis on areas of interest, which are truly analogous.
3. Oil EUR degradation as a function of well density (horizontal and vertical spacing) is calculated to derive strong correlations between well productivity and spacing density. Such relationships can be observed at both regional and local levels.
4. Traditional decline curve analysis (DCA) is conducted in parallel at local levels and compared to analytics results to detect and remove outliers providing a high-quality working data set.
5. Well economics are calculated to generate correlations between oil EUR’s and NPV. NPV’s are maximized within single zones and multiple zones as a function of optimal spacing density, based on predefined economic parameters.
6. NPV Max solutions are cross validated with calibrated hydraulic fracture models. Fracture geometries are superimposed on NPV Max well locations, visualizing overlap and expected total cube drainage efficiency.
7. Well results from a wide range of development scenarios validate the NPV Max methodology and decision-making approach for large capital investments.
This workflow will provide an efficient frontier analysis (Huang et al., 2016) for any unconventional development plan, to deliver the preferred economics outcomes for stakeholders. This paper is predominately Permian-basin based, but the methods and approaches are transferrable to any unconventional horizontal development.
