Application of Well Spacing Optimization Workflow in Various Shale Gas Resources: Lessons Learned

In shale plays, as with all reservoirs, it is desirable to achieve the optimal development strategies, particularly well spacing, as early as possible, to minimize loss of capital or reserves. The understanding of parameters influencing well spacing is a vital for the economic development of unconventional reservoirs. Previous papers on this subject have concentrated on unique history match solution, or a parametric study to evaluate optimal well spacing to maximize returns on investment. The optimal well spacing decision is a tradeoff between maximizing the ultimate recovery from an asset and the cost associated for that recovery. Development of shale gas resource will require drilling a large number of wells. Most of the shale gas reservoirs are early in their development cycle with very few wells having long term production data for error free forecasting. Shale gas wells have a long production life but most of the economic value of the well is recovered in the first few years of its life. During the field development it is critical for the operators to obtain a good understanding of the Stimulated Reservoir Volume (SRV) initially, and the contribution of the External Reservoir Volume (XRV) to the SRV in the long run. This paper presents a stochastic forward modeling workflow capturing uncertainties both in the reservoir and completion properties. The workflow was applied to evaluate an optimal number of wells required in a section in various shale gas resources in North America. The forecasted rates for all models are evaluated with an economical model to determine the optimal well placement in the section. Unlike the deterministic approach, advantage of the stochastic approach is in capturing the uncertainty in Net Present Value (NPV) by providing reasonable bounds for NPV that reflects the uncertainties associated with reservoir and completion parameters. Examples of application of this workflow in Marcellus, Woodford, Fayetteville and Haynesville shale gas resources are presented. The workflow discussed in this paper can be used by the operators in unconventional reservoirs to determine optimal well spacing and completion strategies earlier in the lives of these reservoirs, which could accelerate production and improve economic value of shale gas assets.