This paper proposes an accurate method to represent horizontal wells in a reservoir simulation model. Conventionally, the model grids in the z-dimension coincide with the geological layers in order to honor the layer properties, resulting in non-horizontal corner point geometry grids. It is difficult to accurately place a horizontal well in this type of grids. At best it can be approximated by zigzagged segments within the model grids. This may create a serious problem in evaluating the application of horizontal wells in thin oil rims (35-65 feet). In this situation, the gas and water coning behaviors greatly affect the effectiveness of a horizontal well. A simulation model using zigzagged segments to represent a horizontal well often gives an un-reliable prediction because some segments may be misplaced toward the gas-oil contact while others toward the oil-water contact. This problem may become more acute in the assessment of a marginal field development where the expected productivity of a horizontal well may influence the economic outcome of the project. Therefore, a computer program has been written to "horizontalize" the z-grids while preserving the original reservoir volumes and permeabilities. Where there is a shale layer in the reservoir, the horizontal grids are adjusted such that the shape and location of the shale layer are precisely preserved. This is an important feature of the program in that the shale layer maintains its role as a barrier to the fluid flow. In this grid structure, non-neighbor connections of the model grids may occur; however, this can be handled by the reservoir simulator in use. The horizontal grids offer a number of advantages. First, a horizontal well can be accurately placed in the simulation model. Second, the optimal vertical position of a horizontal well in the oil rim can be meaningfully investigated. Third, the oil, gas and water rate profiles along the horizontal wellbore (from heel to toe) can be accurately predicted. This information is useful in the well completion design and in the planning of any flow control measures. This paper will present a benchmark study to illustrate the benefits of the horizontal grids and an application of these grids to the successful development of a UK North Sea field consisting of thin oil rim reservoirs.

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