Abstract

The previous decade has seen producers focusing on cost cutting. While this has been valuable strengthening the industry against oil and gas price fluctuations, obtaining good reservoir information is still the most valuable and necessary cost for maximizing profitability. It is shown that well test analysis serves several important purposes in the economic development of a shallow field. A simple method is proposed to detect "limited reservoir behavior". The paper shows how well testing is integrated into field development. Three field examples of shallow gas reservoirs are presented. The paper concludes that real shallow reservoirs are often more accurately modeled using the composite and multi-composite reservoir model. It further concludes that careful engineering judgment is required when using the material balance approach in gas reservoirs to determine the original gas in place.

Introduction

Beginning in the 1980's investors were increasingly skeptical about the return on investment potential of the petroleum business compared to the S & P 500 index1. This, together with lower oil and gas prices, has led to cost-cutting as a dominant theme for the past two decades of oil patch development. The desirable feature of this has been the elimination of many wasteful practices that it is hoped will allow the industry to continue to be profitable even with lower oil and gas prices. The undesirable feature must be the sometimes elimination of field data gathering necessary to determine certain key near wellbore and reservoir parameters necessary to guide business decisions.

It is widely recognized that shallow oil and gas development had some very distinct advantages over deeper development. Shallow oil and gas wells are less expensive to drill, complete and tie in. Therefore, they are typically much cheaper to operate. This minimizes the risk associated with field development. Unfortunately it also creates the temptation to eliminate other practices - such as well testing with analysis and rely on inferred data and experience to guide business decisions. Well testing in shallow pool development is the first opportunity to understand the nature of the near wellbore environment and often the far reservoir environment. Critical errors in judgment on field development can be made which can be avoided by making production testing and production test analysis an integral part of field development. Rather than take the negative approach and point out (numerous) cases whereby errors in judgment have resulted by not doing this, we will propose an approach which we believe will aid the practicing reservoir or exploitation engineer to guide future field development. The only caveat is that our approach is not comprehensive. No doubt certain exceptions to the approach we take can be cited. However, we do believe that the vast majority of cases will be found within our approach.

Threshold Economics

It is expected that more than one well will be drilled to make up a series of wells or a "campaign". It is recommended that before a "campaign" of wells are drilled, the calculation of threshold reserves necessary to payout development work be made.

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