With considerable foresight, the Working Interest owners in the Trading Bay Unit approved the first performance prediction for the Hemlock reservoir before the first development well was spudded in the Unit. This study and subsequent ones have been made utilizing a high speed digital computer and a program which simulates flow of one, two or three fluid phases in one, two or three dimensions within a reservoir model composed of several thousand grid cells. The fluid flow simulator has been described in published papers. papers. The incentives which prompted the engineering representatives to recommend expenditures for computer simulation and management to approve the expenditures are outlined. In essence; these incentives are proper reservoir management and effective utilization of reservoir energy (either natural or induced) to (1) sustain a high field producing rate, (2) increase the recovery from the reservoir, and (3) minimize investments, particularly by drilling only the required wells. The objectives and major results of the important performance predictions and pressure history matches that have been made are pressure history matches that have been made are reviewed.

A number of problems typical of preliminary studies have been encountered, and additional problems will occur in the future. The problems problems will occur in the future. The problems involve simulating fluid flow in the reservoir, in the well bores and at the surface. Thus far, adequate solutions to the various problems have been obtained and the studies have been successfully completed.

It is concluded that early simulations of historical performance and early performance predictions can be advantageous and profitable. predictions can be advantageous and profitable. However, engineers should carefully outline all objectives, review the five ingredients of an effective application of simulation models as outlined and proceed to recommend a study that may cost tens of thousands of dollars only if economically justified.

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