Horizontal and multi-lateral wells have emerged as a new means, alternative to vertical wells, for optimal reservoir exploitation. The selection of the proper well configuration is essential for maximizing well productivity. The vertical-to-horizontal permeability anisotropy is a crucial variable in deciding which configuration can provide the best performance.

This paper presents an economic assessment of horizontal and multi-lateral wells in permeability-anisotropic reservoirs. Using a semi-analytical simulation model, this work investigates the incremental changes in probable reserves and the incremental net present values for horizontal and multilateral wells, in comparison to vertical wells.


Horizontal and multi-lateral wells are introduced in ever increasing numbers into modern reservoir development. As the cost of these well configurations declines, applications of horizontal technology become more varied and widespread. In some cases the horizontal technology is the indicated solution for poor-reservoir-quality formations (e.g., tight-gas reservoirs). Horizontal wells increase the productivity by increasing the reservoir-to-wellbore exposure. Multi-lateral holes from the same vertical wellbore accentuate this productivity with even greater formation exposure. However, the cost-effectiveness of any new or envisioned well configuration must take into account incremental benefits balanced against costs.

To evaluate this issue a recently developed comprehensive multi- and single-well productivity or injectivity model, allowing arbitrary positioning of the wells in an anisotropic reservoir, is used in this work.

Previous studies with this model investigated the incremental productivity benefits with horizontal and multilateral wells in both isotropic and anisotropic reservoirs. Other research using this model, investigated the risk reduction with multi-lateral wells in areally anisotropic formations.


A proper exploitation strategy is critical to the success of any petroleum venture. Evaluation of the project is determined traditionally by the incremental benefits over a base case. The net present value, NPV, has been employed frequently as a means to measure this attractiveness (or lack thereof). Because costs vary considerably among petroleum provinces, the NPV of the incremental revenue, which is much more uniform universally, is used often. Of course, the presumption is that the engineer will subtract the incremental costs associated with each project. This is the approach followed in this paper.

Additional incremental benefits for the property value can be claimed from the increases in the probable reserves. Clearly, the incremented production and probable reserves are sufficient motivations to investigate new and, perhaps, more innovative projects.

To assess the incremental benefits from horizontal and multi-lateral wells, the flexible, semi-analytical simulator mentioned above has been used. The simulator allows for any well direction/configuration in a permeability-an isotropic reservoir. Although the model can accept well(s) that are located anywhere in the reservoir, for simplicity, the vertical well considered here is centralized (Fig. 1) and the horizontal well is in the vertical middle (Fig. 2). A four-branch multilateral well (Fig. 3) is also examined.

The first part of this study determines the probable reserves associated with each configuration and demonstrates the incremental effects from horizontal and multi-lateral wells. The second study concentrates on the respective increases in the NPV from oil production over the first three-year period.

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