The Permian Basin plays an important role in the US oil and gas industry with production of one-fifth of all US domestic oil and gas. With the development of hydraulic fracturing technology, the low permeability oil-bearing sands of the Third Bone Spring formation have proved to be profitable. Multistage hydraulic fracturing in horizontal wells through multiple reservoir sands allows production of hydrocarbon from multiple reservoirs at the same time while improving the hydrocarbon flow significantly in low-permeability formations. As drilling activity in the Third Bone Spring continues to increase, there is still a lack of full understanding of fluid flow in unconventional hydrocarbon reservoirs producing through hydraulic fractures. Our reservoir characterization and simulation modeling study is the first stage of a full field development study. The main goal of this study is to investigate general behaviors of the Third Bone Spring formation under common wellbore conditions such as multistage hydraulically fractured horizontal wells. This study also aims to initiate a larger-scale full reservoir simulation study for the field development plan of the region by showing the value of performing reservoir simulation with the available data.

Available data from multiple disciplines were used for the study, including well placement, petrophysics, geology, well completion, and stimulation. The data were then processed and used to build a reservoir simulation model that represents the Third Bone Spring sands. Actual data from representative vertical and horizontal wells in a defined area of interest were used to build the static and dynamic model. Other well trajectories were added to the model to investigate the production behaviors of different wellbore scenarios. The simulation model was run, and the results indicate that the hydrocarbon production is sensitive to reservoir properties, hydraulic fractures, and wellbore footage in the reservoir sands.

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