Economic Optimization of Horizontal-Well Completions in Unconventional Reservoirs
Authors: Wilson Adam 
Published: January 2015

This article, written by Special Publications Editor Adam Wilson, contains highlights of paper SPE 168612, ’Economic Optimization of Horizontal-Well Completions in Unconventional Reservoirs,’ by R.D. Barree, SPE, Barree & Associates; S.A. Cox, SPE, PetroEdge Energy III; J.L. Miskimins, SPE, and J.V. Gilbert, SPE, Barree & Associates; and M.W. Conway, SPE, Core Laboratories, prepared for the 2014 SPE Hydraulic Fracturing Technology Conference, The Woodlands, Texas, USA, 4-6 February. The paper has not been peer reviewed.
This paper presents methods for production forecasting that give reasonable post-treatment predictions that have been found to be useful for economic planning. The proposed methodology provides an economically viable plan for optimizing lateral length, fracture spacing, and treatment design. The methodology focuses on the post-simulation effective reservoir volume. Results show that increasing apparent fracture length rarely affects long-term recovery. Likewise, adding more fractures within the same reservoir volume may increase early-time production rate and decline rate without contacting more reservoir volume or adding to long-term recovery.
Introduction
Industrywide, there appear to be several basic assumptions that govern expectations about recovery generated through horizontal-well stimulation in unconventional reservoirs. Depending on the basic belief system applied, dramatically different, even diametrically opposed, recommendations result. The first belief is that core-derived permeability values, usually from crushed samples, represent overall reservoir flow capacity accurately. This assumption frequently controls post-treatment expectations regarding treatment size, spacing of perforation clusters (fracture-initiation points), or number of treatment stages and most significant aspects of completion design. However, core permeabilities do not represent the overall reservoir flow capacities, something that diagnostic fracture injection tests (DFITs) or production analysis does achieve by measuring the integrated-system permeability, including any secondary fracture enhancement, including existing natural fractures and shear and extensional fracture enhancement developed during the stimulation process.
The assumption that crushed-core-derived matrix permeability describes the system flow capacity is generally accompanied by the industry’s second belief, that created or seismically imaged fracture length represents the effective flowing length of the hydraulic fractures. The combination of these two beliefs is used by the industry to explain the observed production behavior in many models. In other words, belief in one requires belief in the other. However, field observations and many years of laboratory work strongly support the conclusion that effective fracture length is much smaller than the created or imaged length and that fracture cleanup is driven by the reservoir flow capacity. In very-low-permeability and low-pressure systems, the effective fracture length is limited by cleanup (flowing length) rather than by conductivity.