Monte Carlo Techniques Applied to Well Forecasting: Some Pitfalls
- Hugh S. Williamson (BP Exploration Inc.) | Steven J. Sawaryn (BP Exploration) | John W. Morrison (BP Trinidad & Tobago)
- Document ID
- Society of Petroleum Engineers
- SPE Drilling & Completion
- Publication Date
- September 2006
- Document Type
- Journal Paper
- 216 - 227
- 2006. Society of Petroleum Engineers
- 7.3.3 Project Management, 1.10 Drilling Equipment, 5.1.1 Exploration, Development, Structural Geology, 7.5.3 Professional Registration/Cetification, 4.2 Pipelines, Flowlines and Risers, 1.13 Drilling Automation, 1.1 Well Planning, 7.2.1 Risk, Uncertainty and Risk Assessment, 5.1.2 Faults and Fracture Characterisation, 5.6.9 Production Forecasting, 4.1.2 Separation and Treating, 1.6 Drilling Operations, 5.6.3 Deterministic Methods, 4.1.5 Processing Equipment, 1.1.2 Authority for expenditures (AFE), 1.10.1 Drill string components and drilling tools (tubulars, jars, subs, stabilisers, reamers, etc), 3.1.2 Electric Submersible Pumps, 2 Well Completion, 5.7.5 Economic Evaluations, 5.7.3 Deterministic Methods, 3 Production and Well Operations
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Monte Carlo simulation is rapidly superceding deterministic methods as the preferred technique for many well-forecasting applications. This paper contrasts the two techniques and highlights the potential benefits of the former. The main part of the paper is a discussion of the application of Monte Carlo simulation to time and cost estimation of single wells and, in particular, of some common errors that the authors have observed practitioners to make (or have themselves made) within this context. This discussion, together with sections covering multiwell programs, scheduling, and production issues, demonstrates that although Monte Carlo simulation has the potential to enhance the reliability of well forecasts, this potential can be realized only if the technique is applied with great care.
Predictions of the duration and cost of well construction, project schedules, production rates, and cash flows are key inputs into the appraisal, planning, and monitoring of wells projects. These predictions may collectively be termed well forecasts. Some of these forecasts, while of interest in themselves, are also used as the building blocks of other forecasts. Thus, there emerges a hierarchical structure (Fig. 1).
The sustained delivery of new production at reasonable cost and the achievement of results signaled to and/or expected by investors are central to an E&P company's profitability and reputation. Errors in well time and cost forecasts will propagate through to production and cash-flow forecasts, potentially putting the company's entire business plan at risk. If the forecasts are basically sound, random variation caused by the inherent unpredictability of well operations ought not to have a significant effect on the final, rolled-up results. In contrast, the effects of systematic errors in forecasting technique are likely to be cumulative, resulting in possible substantial variance between forecast and actual results. It is the identification and elimination of these errors in technique with which this paper is concerned.
|File Size||1 MB||Number of Pages||12|
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