Abstract
This paper aims to describe the capabilities of an end to end, fully integrated system model and the potential opportunities for its application. This integrated system modelling approach can be applied not only to unconventionals, but any value stream, including onshore, offshore, and conventional wells. The ultimate goal of this approach is to drive business decisions through systems modelling that are strongly anchored on historic data and knowledge.
When considering procuring oil and gas in any discipline, extensive planning must take place to achieve maximum value. Within unconventionals, the type of planning involved for drilling, completions, and production vary greatly from one another, but are inexplicably interconnected. For example, the effect of a design change made within completions on the other sub-functions are not fully clear. The desire for fully connected and streamlined operations within each sub-function necessitated full transparency of KPI's (Key Performance Indicators) and mutually agreed upon value drivers for the businesses. This incentivized the development of the integrated system model, abbreviated ISM.
The ISM presents a holistic view of the impacts that a well manufacturing design change makes on financial metrics such as FCF (Free Cash Flow) and VIR (Value Investment Ratio). Through the integration of CAPEX, production and economic models, the ISM provides a platform for the front-end working team to quickly assess the end-to-end impact of changing drilling or completions design parameters. The ISM contains detailed drilling, completions, and production models to perform design studies within each of these sub-functions. At any point during the design study an engineer can look at the impact of the design choice they made within one of these sub-functions on to the higher-level business operational/financial metrics (time to first oil, time on online, free cashflow, etc.) It also takes a reference type curve as an input for the selected basin and scales it for different design options. The ISM simulates the cycle time, critical path, capital spend and supply chain for the given design. The ISM also has an economics module where the financial metrics are estimated.
The integrated system model has delivered tangible monetary value to the businesses through identification of optimal design choices with high confidence while maximizing three-year free cash flow. The tool has uncovered additional possibilities of increasing the well's production through design exercises such as unchoking wells, further frac spacing/lateral length optimization, etc. The ISM has delivered these tangible values at a fraction of the time that would take multiple full-time employees to do. Additionally, the ISM has improved team efficiency by integrating across multiple silos and provides a standardized platform for exploring quantifiable future ideas.
