How long a lateral to drill, how many stages to complete and how far apart to place laterals to optimize recovery and economics are the foremost questions for effective reservoir management in any unconventional play. We present an approach to answer these questions via reservoir simulation on a geocellular model of a micro darcy range tight gas formation in East Texas. Two reservoir simulation models were built from the geocellular model, one to understand internal depletion between the fracs and another to understand the external depletion taking place in the region outside the fracs. Fraccable lateral lengths (distance from first to last port in an open hole completion) from 4000 to 6000 feet with 8 to 20 stages were simulated to understand internal depletion between the fracs. From these simulations we conclude that for this reservoir:

  1. incremental recovery decreases as more stages are added;

  2. For a set number of stages longer laterals yields more production due to less fracture interference;

  3. Fraccable lateral lengths greater than 5000 ft have better IRRs and

  4. Highest NPVs are obtained at a stage spacing between 360 and 385 ft.

To better understand external depletion, we modelled three wells with the spacing between the middle lateral and two offset laterals increasing from 1000 to 2500 ft in 500 ft increments. From these models we conclude that for this reservoir:

  1. ~57% higher EUR could be obtained by increasing well spacing from 1000 to 2000 ft;

  2. Well spacing around 2000 ft is optimum;

  3. Impact of additional stages is negligible at close well spacing and

  4. Mainly internal depletion takes place in the first 3 years followed by mainly external depletion at well spacing greater than 1500 ft.

The lessons learnt through this study are being applied to our East Texas assets for effective reservoir management.

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