This paper presents a novel approach to numerical simulations of hydraulic fractures in dynamic reservoir simulations. The fluid flow in fractures is modeled through a network of virtual perforations created in the model grid blocks intersected by the expected fracture trajectory and directly connected to the fractured well. It is demonstrated that by adjusting the productivity indexes of fracture virtual perforations on each time step, practically any static and dynamic behavior of the fracture and its proppant can be realistically modeled. The crossflow between real and virtual perforations is managed by solving a joint well equation. The algorithm takes into account effects of fracture permeability degradation due to pressure, proppant destruction, or total accumulated liquid flux. When the fracture half-length is greater than the average grid block size, the approach described in this paper provides much more realistic simulations than the conventional skin-factor approach or manual generation of high permeability channels. One of the most important advantages of the proposed method is that it can be robustly used for large full-field models with hundreds of horizontal or vertical wells with large scale hydraulic fracturing.

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