Economic development of the Milk River sand requires that each well produce to the maximum of its capabilities. This infers it is highly desirable that initial well completions should be optimized by including the best potentially productive intervals. However, the producible sand lenses in this reservoir have been difficult to detect using conventional log analysis due to the extreme shaliness of the reservoir.
New techniques using a computer analysis of the well logs have been effective in delineating producing zones within the gross Milk River section. Knowledge of which zones are naturally permeable, as derived from the analysis, permits optimization of completion programs by perforation of only those zones capable of production. Comparison of actual production with that predicted determines the success of the completion and the effectiveness of the stimulation technique.
During the past three years the south-eastern portion of the province of Alberta, as shown in Fig. 1, has been the scene of considerable shallow-gas drilling activity. One of the main zones of interest being developed in this area is the gas-bearing Milk River formation.
The gross thickness of the Milk River formation ranges up to 350 feet, and consists of tightly interbedded layers of shale, sandstone, and siltstone with average permeability values less than 0.1 md. The low average permeability results in production rates from conventionally cased wells, which are uneconomical unless stimulated by fracturing. Wells that have been fraced show significant increases in production rate when compared to similar offset wells completed open hole.
Improvements in well deliverability rates significantly affect Milk River project economics. To illustrate the impact of improving the initial production rate from 150 Mcf/D to 250 Mcf/D per well, economic forecasts using the parameters listed in Table 1 were prepared. Fig. 2 illustrates the results of these forecasts over a large range of present-worth discount factors.
Table II presents a summary of the project economics calculated in Fig. 2 assuming a ten percent resent-worth discount factor with initial production rates of 150, 200 and 250 Mcf/D. An initial rate of 150 Mcf/D increased to 200 Mcf/D increases the present worth by 77 percent to$5.731 million while an increase to 250 Mcf/D from 150 Mcf/D increases the present worth 252 percent to $8.168 million. While these values are very hypothetical and are subject to the assumptions of Table I, it is readily evident that initial production rate very definitely affects the economics of a Milk River development project.
It is apparent that optimization of the completion intervals, with resulting maximization of the initial production rate, is extremely important when operating a Milk River project. Delineating the intervals of potential production in this complex reservoir depend on identification of the zones which are naturally permeable and arecapable of production. Once the permeable sections are identified, the zones which indicate the best producibility characteristics can be selected for completion.