Patent ID: 8670966

Claim:
A method for identifying an optimum allocation of an applied resource throughout a well network, comprising: validating, according to a predefined schedule, well test data obtained from one or more wells of the well network by data conditioning and quality checking to generate validated well test data; updating, using a processor and according to the predefined schedule, a network model of the well network based on the validated well test data to generate an updated network model, wherein the well network comprises the one or more wells and a surface network, wherein the network model comprises static network parameters, the static network parameters comprising a boundary constraint at sources and sinks of the well network and a fluid composition in the one or more wells, and wherein the boundary constraint and the fluid composition are updated based on the validated well test data; updating, in response to a sensitivity analysis of a well test indicating a change in well performance, a well model comprised in the network model based on the validated well test data to generate an updated well model in the updated network model, wherein the sensitivity analysis is performed using the well model to predict a parameter value of the well test based on other parameters of the well test, and wherein the well model comprises a lift configuration of the one or more wells and a plurality of performance curves that relate well performance to one or more levels of the applied resource; diagnosing, according to the predefined schedule, the lift configuration of the one or more wells based on the validated well test data and the updated network model to generate a diagnosed lift configuration; and determining, using the processor and according to the predefined schedule, the optimum allocation of the applied resource using the updated network model based at least on the diagnosed lift configuration to maximize an operating parameter of the well network, including: converting a portion of the updated network model having a linear inequality relationship to a modified portion having a single variable and a linear equality constraint; and solving the modified portion using a modified Newton's method, wherein solving the modified portion using the modified Newton's method comprises determining one or more inverse derivative curves in order to solve a plurality of Karush-Kuhn-Tucker (KKT) conditions for optimality directly.