Maximizing the Value of Unconventional Reservoirs by Choosing the Optimal Appraisal Strategy
- Bart J. A. Willigers (BG Group) | Reidar B. Bratvold (University of Stavanger) | J. Eric Bickel (University of Texas at Austin)
- Document ID
- Society of Petroleum Engineers
- SPE Reservoir Evaluation & Engineering
- Publication Date
- August 2017
- Document Type
- Journal Paper
- 502 - 512
- 2017.Society of Petroleum Engineers
- Bayes rule, Appraisal unconventional reservoirs, Montney Formation, Canada
- 4 in the last 30 days
- 420 since 2007
- Show more detail
- View rights & permissions
|SPE Member Price:||USD 10.00|
|SPE Non-Member Price:||USD 30.00|
The choice of appraisal strategy for the decision whether to develop a reservoir largely determines the amount of uncertainty that is carried forward to the development and execution phase of the project. Hence, the selection of an appraisal strategy can indirectly influence later go/no-go decisions. Reservoirs are appraised by drilling and producing wells. In unconventional reservoirs, these wells represent a small subset of possible wells that could be monetized if the decision were made to develop the reservoir (i.e., the appraisal wells sample an underlying population of possible wells).
This study explores how an optimal appraisal strategy can be designed in terms of the number of appraisal phases, the number of wells to be drilled in each appraisal stage, and how long to produce the appraisal wells before deciding whether to abandon the project or to proceed to the next stage. It is demonstrated how the view on the average expected ultimate recovery (EUR) of a well in an unconventional reservoir can be continually revised as new information surfaces.
Production data from a large well set from the Montney Formation, which straddles British Columbia and Alberta, Canada, is used to assess how accurately initial production predicts the expected ultimate recovery of a single well.
|File Size||705 KB||Number of Pages||11|
Allan, P. D. 2013. Leveraging the Option Value of Unconventional Resource Projects. Presented at the Unconventional Resources Technology Conference, Denver, 12–14 August. SPE-168707-MS. https://doi.org/10.2118/168707-MS.
Bickel, J. E. 2014. Decision Analytics, Value of Information, and Appraising in Unconventional Reservoirs. Presented at the SPE Hydrocarbon Economics and Evaluation Symposium, Houston, 19–20 May. SPE-169841-MS. https://doi.org/10.2118/169841-MS.
Can, B. and Kabir, C. S. 2011. Probabilistic Performance Forecasting for Unconventional Reservoirs With Stretched-Exponential Model. Presented at the SPE North American Unconventional Gas Conference and Exhibition, The Woodlands, Texas, 14–16 June. SPE-143666-MS. https://doi.org/10.2118/143666-MS.
Cipolla, C. L., Lolon, E. P., Erdle, J. C et al. 2010. Reservoir Modelling in Shale-Gas Reservoirs. SPE Res Eval & Eng 13: 638–653. SPE-125530-PA. https://doi.org/10.2118/125530-PA.
Duong, A. N. 2011. Rate-Decline Analysis for Fracture-Dominated Shale Reservoirs. SPE Res Eval & Eng 14 (3): 377–387. SPE-137748-PA. https://doi.org/10.2118/137748-PA.
Frantz Jr., J. H., Williamson, J. R., Sawyer, W. K. et al. 2005. Evaluating Barnett Shale Production Performance Using an Integrated Approach. Presented at the SPE Annual Technical Conference and Exhibition, Dallas, 9–12 October. SPE-96917-MS. https://doi.org/10.2118/96917-MS.
Giles, M. R., Nevin, D., Johnston, B. et al. 2012. Understanding Volumes, Economics and Risk Mitigation in Unconventional Gas Projects. Presented at the SPE/EAGE European Unconventional Resources Conference and Exhibition, Vienna, Austria, 20–22 March, Vienna, Austria. SPE-151906-MS. https://doi.org/10.2118/151906-MS.
Gouveia, J. and Citron, G. P. 2009. A Statistical Approach to the Effective Economic Modeling and Portfolio Selection of Unconventional Resource Opportunities. Presented at the SPE EUROPEC/EAGE Annual Conference and Exhibition, Amsterdam, 8–11 June. SPE-151906-MS. https://doi.org/10.2118/151906-MS.
Gray, W. M., Hoefer, T. A., Chiappe, A. et al. 2007. A Probabilistic Approach to Shale Gas Economics. Presented at the SPE Hydrocarbon Economics and Evaluation Symposium, Dallas, 1–3 June. SPE-108053-MS. https://doi.org/10.2118/108053-MS.
Haskett, W. J. and Brown, P. J. 2005. Evaluation of Unconventional Resources Plays. Presented at the SPE Annual Technical Conference and Exhibition, Dallas, 9–12 October. SPE-96879-MS. https://doi.org/10.8/96879-MS.
Ingsoy, P. B., Chandler, A. S., Lie, O. et al. 2013. Technical Aspects of Risking and Valuation of Shale Reservoirs. Presented at the SPE Unconventional Resources Conference and Exhibition–Asia Pacific, Brisbane, Australia, 11–13 November. SPE-167059-MS. https://doi.org/10.2118/167059-MS.
Kanfar, M. S. and Wattenbarger, R. A. 2012. Comparison of Empirical Decline Curve Methods for Shale Wells. Presented at the SPE Canadian Unconventional Resources Conference, Calgary, 30 October–1 November. SPE-162648-MS. https://doi.org/10.2118/162648-MS.
Kuppe, F., Haysom, S., and Nevokshonoff, G. 2012. Liquid Rich Unconventional Montney: The Geology and the Forecast. Presented at the SPE Canadian Unconventional Resources Conference, Calgary, 30 October–1 November. SPE-162824-MS. https://doi.org/10.2118/162824-MS.
Schlaifer, R. 1959. Probability and Statistics for Business Decisions. New York: McGraw-Hill Book Company, Inc.
Stabell, C., Gonzales, R., and Langlie, E. 2007. Stochastic Modelling of Shale Gas Resource Play Economics. Presented at the SPE Hydrocarbon Economics and Evaluation Symposium, Dallas, 1–3 June. SPE-108081-MS. https://doi.org/10.2118/108081-MS.
Williams-Kovacs, J. D. and Clarkson, C. R. 2011. Using Stochastic Simulation to Quantify Risk and Uncertainty in Shale Gas Prospecting and Development. Presented at the Canadian Unconventional Resources Conference, Calgary, 15–17 November. SPE-148867-MS. https://doi.org/10.2118/148867-MS.
Willigers, B. J. A., Begg, S., and Bratvold, R. B. 2014. Combining Geostatistics With Bayesian Updating to Continually Optimize Drilling Strategy in Shale-Gas Plays. SPE Res Eval & Eng 17: 507–519. SPE-164816-PA. https://doi.org/10.2118/164816-PA.
Willigers, B. J. A., Begg, S. H., and Bratvold, R. B. 2016. Appraising Unconventional Resources: How Many Wells To Drill and Where To Place Them? SPE Res Eval & Eng 19: 340–349. SPE-179736-PA. https://doi.org/10.2118/179736-PA.