Well spacing optimization is one of the most important considerations in unconventional field development. The Appalachian basin development has been increasingly prevalent in the last decade due to substantial production performance from Marcellus, Upper Devonian, and Utica/Point Pleasant Shale plays. The majority of operators have been in a manufacturing mode, where a standard well spacing and completions design have been applied to a field with less emphasis on optimizing the net asset value of the field. NAV can be improved through modeling and various optimization workflows such as numerical simulation, machine learning, and linear programming. The essence of field development and optimization is to use completions design, as well as well spacing, to optimize the net present value of the field based on current commodity pricing, capital expenditure, operating cost, cycle time, and net revenue interest. A substantial change in any of these essential factors must be studied to make sure the appropriate changes are accounted for in the field development and optimization.
Determining the optimum well spacing that coincides with the completion design can often be challenging and time consuming due to complexity of some governing factors such as geology, engineering, and economic analysis. For instance, if optimum well spacing and completions design were developed in a geologically noisy and complex reservoir, the outcome may no longer be valid in a discreet and quiet area. In addition, if well spacing and completions design were developed for a high commodity pricing environment, performing the same workflow and evaluation at a lower commodity pricing would yield an increase in well spacing. The dynamic nature of the oil and gas industry, specifically these essential factors, could cause complications with selecting the optimum well spacing and completion design to maximize the shareholder's value. Therefore, a fast-paced and dynamic workflow has been developed, that can be applied in different shale reservoirs, to maximize the present value of these assets. This paper will walk through the step-by-step process that can be applied to any unconventional shale play to optimize the field considering geology, engineering, and economic analysis.
The objective of this paper is to go through a fast-paced optimization workflow, starting with a fracture model, coupled with a production model using numerical simulation to obtain a calibrated model, and finally performing detailed economic and sensitivity analysis to obtain the optimum well spacing and completions design, which would yield the highest net present value of the field.