[URTeC 2022] The Diminishing Returns of Lateral Length Across Different Basins (ID 3723784)

The Diminishing Returns of Lateral Length Across Different Basins

Talk Details::

  • Tuesday, June 21st at 2:15 PM | Room 371
  • Theme 7: Applications in Reserves Estimation and Production Forecasting

AUTHORS::

A. Cui, T. Cross (Novi Labs)

Abstract::

Objectives/Scope

Over the past decade, operators have significantly increased unconventional well performance through drilling longer laterals. While longer lateral length (LL) is known to benefit production, the exact efficiency of the additional length is a subject of much debate, in part due to the difficulties in separating the impact of longer laterals from upsized completions, interwell spacing, and geology. In this study, we use machine learning to disentangle the complex, nonlinear relationships to generate estimates of lateral length production efficiency across the major unconventional plays in the US.

Methods/Procedures/Process

We created a dataset for nine different basins, the Bakken, Barnett, Delaware, Denver-Julesburg, Eagle Ford-Gas, Eagle Ford-Oil, Haynesville, Marcellus, and Midland basins. We filtered out all wells with less than 3000 ft LL then, for each data set, we built an ensemble of decision tree models that utilized LL, completions, geo, and spacing as input features to predict major phase cumulative production. SHAP (SHapley Additive exPlanations) values were calculated to attribute the three year cumulative production contribution of the wells’ LL. For each basin, we group wells into 500 ft bins and calculate the median SHAP of each bin. Finally, we calculate efficiency as the ratio of SHAPs for each LL bin divided by the SHAP of wells in 3000’ LL bin.

Results/Observations/Conclusions

We did not observe any basins with a 100% major phase production efficiency across all LL bins, but the closest was the Haynesville; production efficiency for that area was perfect for the first 7000 ft, but a small decline for longer wells. The Midland was also close; a constant shallow decline with 2-mile long laterals having a 97% efficiency. Delaware and DJ wells exhibit a similar trend; constant shallow declines with 2-mile long wells having a 90% efficiency. In the Marcellus and EF-Gas, LL efficiency declines for the first 8000 ft and plateaus at 90%. On the other hand, the wells in the Bakken and EF-Oil have steep drops in efficiency; down to 60% for 8000 ft wells. Lastly, the Barnett shows a continual sharp decline in LL efficiency with long laterals producing at 70% efficiency.

Applications/Significance/Novelty

Oftentimes operators are planning for future wells with very long laterals without adjusting expectations on production per foot. However, for every basin in this study, we demonstrate there are varying magnitudes of diminishing return on production per lateral foot. Asset valuations need to take each PUD’s length into account and adjust projected reserves accordingly. Similarly, for certain basins, planners will need to carefully weigh the costs and risks of drilling long laterals vs the outcome of drilling two separate wells.

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