Production results from capital or operational investments are often difficult to identify and quantify due to a field's decline and other factors that introduce noise in the data. This was the case with a series of operational improvements in a tight gas field of 80 mostly marginal wells located in South Texas, a mature producing area similar to Appalachia's assets.
However, approaching the problem with a set of statistical tools not commonly applied in the upstream oil and gas industry yielded a definitive answer to the success of the investments. Normal distribution analysis and hypothesis testing are well-grounded academically and have been applied in globally competitive manufacturing operations for decades, but are not common tools in the petroleum engineer's toolkit. Nevertheless, today's low-cost, easy to use statistical software facilitates an easy transition to the oil and gas industry.
The results from using the above methods eliminated uncertainty about the success of the operational changes, which was questionable using traditional production and decline curve analysis. In addition to proving the success of the investments, the model also points to the viability of improvement by reducing production variation as opposed to looking exclusively for production increases.
These statistical methods are especially significant for analyzing data, particularly in marginal, mature producing areas. Moreover, the analytical methods can yield definitive answers to a number of oil and gas engineering, operation, production and financial questions. Hence, one will be able to take the material provided and leverage it to help in a number of potential applications.
The Lobo Gas Field, primarily located in Webb and Zapata Counties of Texas (Figure 1), is a mature tight gas field that has been producing significant amounts of gas for several decades. ConocoPhillips, currently the largest operator in the field, has approximately 2000 active producing wells in the field.
In 2006 ConocoPhillips realized that significant potential resources could be economically added by reducing the bottom-hole abandonment pressure. Hence, the company put together a multi-discipline, cross functional team of engineers to pursue the Aggressive Artificial Lift Low Pressure Pilot (AALLPP) program in what will be referred to as the "D" lease in the field.