This paper focuses on P.T. Stanvac Indonesia's (PTSI) efforts to evaluate, justify and drill a horizontal well at the current edge of Industry technology. This pilot well, Gunung Kembang 7 (GK-7), located in a remote area of South Sumatra, Indonesia, was drilled successfully within an "ultra-thin" 33-foot oil column encompassed by both a gas cap and aquifer (see simplified cross section, Figure 1). Vertical wells in this field produce at low oil rates and yield marginal to non-commercial economic results.

The paper details efforts to numerically model the optimum case for vertical and horizontal wells to allow a fair economic comparison. Each alternative's optimum was derived by determining the respective spacing and rate for maximum profitability. Other associated studies are also discussed in addition to well performance and the actual horizontal drilling and completion results.

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