Maximizing in the Bounded Era
Data Science & Analytics

Maximizing in the Bounded Era

Rosemary Jackson  •  

“Make gold of that”*: Oh, the Unbounded Era when we were fracking and flipping leases. One parent well per section. No need to think about a pad. Focus on completion design and put in your well. Rapid exploration and leasing. This was the era of the land man.

“Beware the ides of”*: The Cube Era when capital was flowing and pads were growing. Huge infill development based on the productivity models of the unbounded phase grossly overestimated shale resources. Cube development was supposed to be the right idea, but it turned out oh so wrong. We rubbled the reservoir and bet the house on each pad.

“Tis not so wide as a church door”*: And now, the Bounded Era, where we ask tough questions and need complex answers. We have to maximize returns from a crowded pad and a scarce dollar environment. It’s all about capital discipline within the constraints of shale and parent/child/sibling wells and the edges of your lease. The Bounded Era is all about limitations and trade-offs. And the oh so timely rise of technology.

Just as the Bard awakened the English language to higher levels of understanding and awareness presaging a new period of literature, so Petro.ai is moving the Oil and Gas Industry to radically advanced innovation and insights heralding the conquering of the Bounded Era. And where Shakespeare plied linguistics, Petro.ai employs the Pad Designer, your Shale Productivity Calculator, to maximize capital returns on your inventory in a finite amount of rock.

“What does it mean to maximize?” Dr. Troy Ruths, CEO of Petro.ai asks the foundation question. “There are different maximization opportunities. One maximization opportunity is total profit of the reservoir. How many dollars can you get out? Another one is cash flow. What kind of cash flow can you get for your company? And a third one is reservoir potential. Maybe you’re trying to get as much recovery as you can get out of the ground.”

Maximization requires experimentation. But that’s not always easy when companies have made promises of specific returns on their inventory hooked to a technical analysis that has already been used to back up those promises. Sound messy? It is. Historical calculations based on pad performance from the Cube Era with wells spaced too closely or too far apart, is a losing metric for new pad designs that require new understandings of the intricate shale environment.

Sequencing multi-generation drainage

“They need to reframe,” Ruths urges. “Operators have to take another look at their pad design. They are trying to optimize, but they’re reluctant to change it too much. You’ve made promises and you don’t want to look like you’re unsure about your analysis. So, the first step to take when you want to rethink maximizing your remaining inventory, is just to try putting the sticks in a different spot. Keep the same number of sticks and move them up a little or down a little based on the performance of different landing zones. Experiment with spacing them a little differently based on sequencing and co-development which is what we help with.

Then you can rethink your well spacing step by step. Can we drop the number of wells per section? Can we increase the number of wells per section? These are critical questions to maximize your remaining inventory. And you need to ask these questions every quarter. You need to look again. What have we learned? That should be part of the review process that companies do, and the successful ones have this in place.

It’s the job of the operator to constantly change the pad design, to constantly maximize their inventory. Our job is to give them the tools to make those tradeoffs.

“How Petro.ai provides help is that we have the only software platform on the market that takes the critical inputs from the constraints of this Bounded Era and lets you experiment with different options,” Ruths explains.

“What if their fracs are bigger? What if they’re a little smaller? What if there was a different cost for putting these wells in, does that completely change what you can do? And the answer is yes to all of them because it’s a tradeoff not just one solution.”

Dr. Brendon Hall, VP of Data Science, adds, “As your inventory gets drawn down, it actually gets harder to maximize, because what that means is, you’re running out of space. We talk about bounded development, but your development is becoming more and more bounded all the time.Technically, it becomes a greater challenge to optimally drill those wells and put them in the right spots, complete them in the right order.

Well spacing siblings versus nearest well drainage model

“So, there’s this trade off, you want to drill it but you want to adapt based on what you’re seeing very quickly. If you wait too long that’s a lot of inventory that you’ve lost. Not only did you lose money on that well you’re deteriorating the reservoir and you’re not going to get that back.

What we’re doing is closing the gap on the speed of design and learning.The faster we can learn from something and apply it to our inventory the bigger the result will be from that learning.

The great promise of digital technologies like Petro.ai, is that we’re building the speed so that you can integrate previous knowledge quickly and bring it to bear on your next development opportunity.

Because as we know, “There is no darkness but ignorance.”*

*Make gold of that. (Timon of Athens, Shakespeare)

*Beware the ides of… (Julius Caesar, Shakespeare)

*Tis not so wide as a church door…(Romeo and Juliet, Shakespeare)

*There is no darkness but ignorance. (Twelfth Night, Shakespeare)

PETRO
114 Main Street Ste. 200, Houston, TX 77002
4-5609 Avenue du Parc, Montreal QC, H2V 4S8

© 2020 Petro.ai All Rights Reserved