Summary

Developing a continuous resource play with multiple productive zones of varying geological complexity that total in excess of 4,500 gross feet, requires careful consideration in order to maximize value while fully addressing the inherent technical and economic challenges. Laredo has developed a proprietary "Earth Model" workflow that integrates seismic, well, production and completion data using multivariate statistical methods to denote the highest productivity potential throughout the entire prospective section. Building an early appreciation of the development potential allows the prioritization of highest value zones, design of landing points and wellbore geometries to seek optimized production and planning for no detrimental impact on future development. Production results from a growing population of wells demonstrate improvements in cumulative 90-day oil production that are in line with forecasted Earth Model expectations. This continues to assist in ranking development areas and prioritizing exploration acreage. The Earth Model workflow represents an "evergreen" process that can be iterated and updated on an ongoing basis with new data, including new complexities and changes to development designs providing an improved platform that may further improve well EUR's and economic returns.

Introduction

Laredo recognized early during the evaluation of its Garden City acreage positioned on the eastern side of the Midland Basin (Figure 1) that development of multiple zones require a holistic and rigorous technical workflow, integrating all available data types, in order to fully exploit the total resource package. With resource potential aggregating into billions of barrels, this represents a development that requires careful consideration and oversight.

The multi-stacked nature of the Midland Basin tight unconventional oil play presents additional challenges in terms of vertical and horizontal spacing when designing the overall development and building the appropriate scale of facilities necessary for exploitation of these resources (Figure 2).

A key starting point to building any type of high quality 3D geocellular Earth Model is acquiring the right data at the right time in order to initiate this process. A cornerstone principle in Laredo's operating philosophy is that a better understanding of the subsurface via integration of data, science and technology leads to improvements in value creation for the company's stakeholders. Laredo acquired over 400 square miles of high fold (>200) 3D data over their Garden City assets. New efforts to acquire seismic data in the Permian Basin are very much a trend in response to the success of horizontal drilling, as explained by Dunham (2013).

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