Chase the Cube Not the Well
Data Science & Analytics

Chase the Cube Not the Well

Rosemary Jackson  •  

Petro.ai: Accurate calculations for accurate well spacing predictions

Petro.ai: Full cube perspective using geomechanical insights

Optimizing total cube performance, multiple wells drilled in multiple benches from a single well pad, is more important than optimizing the individual well. The oil and gas industry will meet this challenge by maximizing productivity through drainage.

Troy Ruths, CEO of Petro.ai, cautions the industry, “Companies are chasing well level results, which is the wrong way to think about it. You’re not going to be able to predict what one well is going to do, especially if it’s working in concert with other wells. We’re still thinking about optimizing the well when it should be the pad. We’re still asking, why didn’t this well perform in the pad but this well did. That’s the wrong paradigm to think in.”

Wells aren’t cheap. Cube development has high upfront costs which is balanced out by the benefits of scale and speed. Hart Energy summarizes, “Wood Mackenzie estimates that if operators save 10% on costs per well, cube development can improve net present value per section by more than 70% and increase capital efficiency by 15%... However, cubes concentrate the spend up front and decrease flexibility. In fact, if well spacing on a cube is wrong, cash flow can actually be impaired.”

“In Petro.ai, if we can get to drainage volumes, anyone can make a decision on well spacing. Getting to that drainage volume using all of the geomechanics steps is complex but your only way to cube optimization.”

Ruths and Kyle LaMotta, VP of Analytics, take us on a tour of cube logistics, well spacing, and most importantly, drainage.

“If these wells were very cheap to drill, then well spacing wouldn’t matter because people would just put in a bunch of wells and know that they were interfering with one another. Because they’re expensive and take a long time to drill and complete, well spacing becomes important. An extra well that you don’t need significantly affects the economics of the whole project.

“In this gun barrel diagram, each of these dots represent wells.You can see the multi-colored bounded area that we’re assuming is the drainage.”

“This is looking at it in 2D but you could imagine propagating this down in 3D perspective. You have the feathered silhouette around the perimeter from the frac geometry that we’re predicting. With this we can calculate the drainage. You could fill this in with wells and that would be the simple solution to drain as much as possible. But then you could imagine a different story where we say, let’s keep on removing wells till we have the optimal set to drain this part of the reservoir.

“This is an example of the cube development. You can see these wells targeting lots of different zones.

“That’s how we see it connected. When people think about well spacing right now, the first thing they need to do is decide on their spacing. Are they going to do 350 foot spacing or 500 foot spacing? That’s typically horizontal spacing. And the way they talk about vertical spacing is stacked versus staggered. Are they going to stack the wells on top of each other or are they going to stagger them side by side? Within that cube you have lots of different types of patterns where wells are stacked or staggered across 3 different zones and that can make a big difference.

“This cube has both stacked and staggered with a 5 spot pattern.”

“In the conventional space we’d be looking top down on the reservoir and 5 spot patterns are very common in conventionals, for instance when you’re doing water flooding. Here, we’ve rotated the earth and we’re looking at it horizontally rather than bird’s eye view.”

“Here the wells are staggered in the Dean. They’ve tried out a Wolfcamp B and a Wolfcamp A. And a lower Sprayberry stack. The wells are stacked on the side and staggered in the center. That’s how this company came up with this diagram. Their question is, do I put more wells in the Dean? I’ve stacked. I’ve also varied the landing zone. This is where well spacing as a vocabulary and vernacular term stops being useful. There are so many dimensions to this. That’s why people are starting to get hung up as they go to cube development.

“One of the challenges is they may take that cube and develop it over 2 years for a variety of reasons. And right now, people are worried about this parent child problem. I think when you view it in the terms of what are you draining in that cube, it doesn’t really matter. The difference is, are you getting production now or later. It’s like a difference of 70-30 now or 50-50 for the wells.The wells will look better early on because they’re not competing over the same resources.

“Engineers are still thinking with the conventional notion that they’re going to put these wells in and they’re going to keep draining. They’re going to keep growing in the cube and draining it. But the permeability is so low in shale that whatever you got at the beginning is as good as it’s going to get.

“That’s why the declines are so fast, but that’s why the placement of these wells are so important because the wells are not going to grow. You can’t just drill them and hope that the well’s going to grow into the bottom.

“The industry doesn’t think about it this way. This is a big issue. After the initial frac, people aren’t thinking conceptually about what’s happening underneath the surface when they’re draining these wells.The normalization of drainage volume is a critical step to show what’s going on.

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