Don’t Miss the Unconventional Resource Revolution’s Next Wave (Part 2/2)
Posted by D Nathan Meehan July 7, 2015

Why Strategic Well Rejuvenation is the Key to Sustained Profitability in
Today’s Oil and Gas Market

This blog post was originally a white paper by H.C. Freitag and his team at Baker Hughes.

STEP 1. SCREEN AND SELECT CANDIDATE WELLS

Selecting rejuvenation candidates with the best risk/reward ratio from an operator’s hundreds—or even thousands—of wells takes the right approach, the right tools, and the right expertise. The process includes:

  • Mining historical reservoir and production data
  • Applying advanced statistical methods
  • Estimating the candidate well’s production potential

The amount of available information around a well has grown from a few key data points to hundreds of variables related to reservoir geology, well architecture, completion tools and techniques, pumping schedules, stimulation fluids, and production schemes. Taken together, those data can generate an almost infinite number of combinations that require an iterative process and advanced analytical tools, including predictive models, to help zero in on the best candidates.

Mining Historical Reservoir and Production Data

The goal is to turn data into information, and information
into insight.”– Carly Florina, former Hewlett-Packard Co. CEO

Often, the best rejuvenation candidates are located in the best producing areas—or “sweet spots”—within fields. However, because of the heterogeneity of unconventional reservoirs, pinpointing the best candidates is still challenging.  An optimized screening process leverages more than just field production data, encompassing such factors as:

  • Overall recovery
  • Decline rates
  • Well architecture
  • Stimulation design
  • Production schemes

Advanced data mining techniques can provide a look into virtually any play in North America, enabling operators to study key production drivers. However, it is important to remember that data sets involving large well counts often contain many variables that are not ideally distributed, have missing values, bad values, or other problems. So it is crucial that the tools and techniques used in the data mining process can flag any potentially compromised data. Another best practice is building a single data set drawn from multiple sources—minimizing the risk of information gaps to ensure the most accurate and reliable screening possible.

Applying Advanced Statistical Methods

It is possible to pull raw data from multiple sources, both public and proprietary,
cleanse it, and merge it into a single set. Using a geographic information system
(GIS) application can improve data set interpretation by mapping the information in geographical perspective.

These methods can help operators better understand the impact of key well architecture, and completion and stimulation parameters. This allows one to create a baseline for reservoir performance and determine and explore the potential of various rejuvenation techniques within a specific play or field. With this information, wells located in good quality reservoirs with more to offer and/or wells possessing production issues that can be corrected effectively and economically can be identified.

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Using proprietary data-gathering and filtering algorithms and GIS mapping, it is possible to merge public data with proprietary information, and then analyze it to determine well placement, original completion type, and original stimulation treatment details.

The best performers in a field often represent the best potential candidates, assuming that the remaining reserves are sufficient to be recovered profitably. For example, good producers with steep declines curves can be excellent rejuvenation candidates. In good-quality reservoir areas within the play, poor or intermediate producers that were under-completed or under-stimulated also can be good—or sometimes, the best—candidates. With under-performers, it is crucial to understand reasons for poor performance because, while a problem well can often be corrected, a poor-quality reservoir cannot.

Estimating the Candidate’s Production Potential

Once the best candidates are selected, the workflow must be able to provide an initial means of estimating post-rejuvenation incremental production. One reliable method is using a Monte Carlo simulation, incorporating key reservoir and well parameters to rank the rejuvenation candidates within the selected group of wells. This makes it possible to estimate each well’s rejuvenation potential and determine when rejuvenation programs may be needed over the life of the well.

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The two refrac wells shown above provide an excellent example of why a thorough screening process is essential prior to any CAPEX investment in a well rejuvenation treatment. The first well’s rejuvenation treatment delivered results more than three times greater than the initial production
of the well and quickly recouped the operator’s reinvestment. In contrast, the rejuvenation treatment of the second well achieved less than half of the initial production of the well, and its projected incremental production is unlikely to earn back the additional monies spent on the refracturing program.

STEP 2. PERFORM INDIVIDUAL WELL DIAGNOSTICS

Creating a diagnostic profile of existing fractures lets one identify untreated or under-stimulated areas of the reservoir.

After the best candidates have been identified, an additional diagnostic analysis must be performed on each well in order to uncover its unique production challenges and to pinpoint issues that might preclude a specific type of rejuvenation treatment or render a treatment uneconomic.

Performing a detailed well diagnosis can include:

  • Conducting a thorough cleanup. Almost every well will require a thorough cleanup prior to any rejuvenation efforts; in fact, some wellbore cleanouts have even been effective at temporarily boosting production to the desired recovery levels without any additional rejuvenation efforts.
  • Verifying well integrity. It is crucial to evaluate the casing of the well and confirm its mechanical integrity. These data help determine the most effective isolation method—especially if restimulation is needed to improve production.
  • Reviewing the original well logs. A comprehensive examination of all existing formation evaluation data helps in quantifying the remaining reserves and in understanding reservoir conditions. If formation evaluation data is scarce or unclear, it may be necessary to gather new logging data prior to investing additional CAPEX in rejuvenation treatments.
  • Examining the original completion and stimulation program. A detailed review of the original completion and stimulation design can help create a diagnostic profile of the existing fractures and identify any areas that might have been untreated or under-stimulated.

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Petrophysical analysis of legacy rock cuttings, mapped to specific well intervals or stages, makes it possible to refine production and stimulation profiles for wells that lack detailed formation evaluation logs.

STEP 3. PRESCRIBE THE OPTIMAL REJUVENATION TREATMENT

In some cases, production can be restored to desired levels with a cleanup program or with artificial lift technology.

But if refracturing is needed, the production profile data from existing stages can be combined with reservoir models to capture the full scope of subsurface data, providing the insight to design the most effective rejuvenation program.

The best way to build that program is with a process that weighs the technical feasibility and risk against the cost of intervention. It is also important to consider how the well will be put back on production after the treatment because proper
flowback management plays an essential role in optimizing flow rates and in
achieving desired production.

This process helps to ensure effective management of project costs by limiting reinvestments to viable refrac candidate wells that can be rejuvenated—at a fraction
of the cost of new wells—not just once but multiple times.

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 STEP 4. EXECUTE AT THE WELLSITE

“Ideas are cheap.
The difficult part is finding the team to execute them.”

– Raymond Kwok, Chairman, SUNeVision Holdings Ltd

Field execution is the final step in the refracturing process. The overall success of the project—both technical and economic—rides on the effectiveness and efficiency of the wellsite execution.

At this point, it is crucial that the proper products and services be applied to help prepare any well for the application of chemicals or the installation of artificial lift. When refracturing is prescribed, these technologies will play an important role in closing off existing stages that are not part of the refrac design and in isolating the desired frac stages to effectively restimulate the well.

During the refracturing process, monitoring fracture propagation is important to ensure the success of the job. These real-time data, combined with post-refrac analysis, is crucial to refine and enrich the reservoir models for the next refracturing operation. It takes a multi-well approach to identify the most effective rejuvenation treatments, and to help further drive efficiency, reliability, and improved ultimate recovery.

If the operator is working with a service company offering a full arsenal of completion, stimulation, and production technologies, they are often able to provide a dedicated wellsite coordinator and project manager for overseeing the project. This is recommended as it provides a single point of accountability for the project results and typically delivers improved communications and better execution efficiency.

A NEW BUSINESS MODEL FOR UNCONVENTIONAL ASSETS

To avoid repeating the mistakes of the past and artificially limiting the potential of the North American shale plays, it is crucial that operators in these basins jettison their outdated business models and begin treating each of these wells as a renewable asset.

By emphasizing the placement of wells in the most productive portions of the reservoir, it is now possible to construct wells that can be rejuvenated multiple times to deliver more hydrocarbons than were previously possible—and deliver those hydrocarbons at a lower cost per barrel than with the current approach.

And this approach isn’t limited to new wells.

Any operator today with an inventory of unconventional wells likely has multiple rejuvenation candidates that can be leveraged to improve his or her financial performance with minimal CAPEX reinvestment. The key is to pinpoint those wells quickly and efficiently, determine the most effective (and most cost-effective) rejuvenation treatment, and reinvest only in those wells with the best potential and
least risk.

And that is now easier than ever before. By adopting a more strategic approach that leverages the process outlined in this paper and partnering with the right service provider or providers, operators can transform their current business model into one that can deliver consistent value to their organization… in both good times and bad.

This process has been applied successfully in numerous North American shale applications by Baker Hughes as part of its NextWave production rejuvenation solution.

To learn more about this solution and how it has been applied to help operators efficiently target and rejuvenate unconventional wells, please visit BakerHughes.com/NextWave.

ABOUT THE AUTHOR

Hans-Christian Freitag is Vice President of Integrated Technology for the
Global Products and Services group at Baker Hughes. He joined Atlas Wireline Services in 1989 and has worked in operations, geoscience, and management positions around the world. In 2002, he moved to Baker Hughes INTEQ and oversaw the development and market introduction of advanced logging while drilling technology. From 2005 to 2008 he was responsible for formation evaluation in North America. From 2008 to the end of 2013 he held a number of senior and executive management positions with
Baker Hughes in the Middle East and Asia Pacific. Before assuming his current role, he was Vice President for the Unconventional Resources group in the Eastern Hemisphere. He has authored publications on open-hole and cased-hole formation evaluation for the Society of Petrophysicists and Well Log Analysts and the Society of Petroleum Engineers. Freitag holds an MSc in Geophysics and a BSc in Physics from TU Berlin
and TU Clausthal in Germany.

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