Day 3 PM - Production Forecasting & Decline Curves

PRODUCTION FORECAST &
DECLINE CURVES
DAY 3 AFTERNOON
PRODUCTION FORECAST & DECLINE CURVES
We drilled a gas well that penetrated two layers
of total net pay of 12m + 4.6 = 16.6 m. Now
evaluate the formation gas flow rate potential?

(use the excel sheet)

How many mmscf of gas this formation & well
can produce during its life time?

(scratch your head)

ALL DEPTHS AREmKB
13
12
SURF. CSG.
610.10
11
10
- f rombottomup -
Coiled Tbg
1,850.5
9
8
7
6
5
4
3
2
1
2572.52
to
2584.7
2586.84
to
PBTD 2591.41
2,635.40
TOTAL DEPTH
2646.80
12 m
4.6 m
Production Forecast & Decline Analysis 2
Propagating pressure waves through the reservoir
(Golan & Whitson, Well Performance, 1991)
Constant rate depletion
Constant pressure depletion
OBJECTIVES OF PRODUCTION FORECASTING
For new wells
Estimate wells initial rate
Assess wells total production volume during its life
For current producers
Calculate remaining recoverable reserves
Calculate original recoverable reserves
For managing reservoir development
Observe reservoir behavior, independently of operational
activities
Observe interwell communication
For base management
Detect operational problems
Forecasting future production is a critical step of project economics
Common useful tool: production decline curve analysis
A Decline Curve refers to the production rate of a well vs. time
Two major significant forecasts:
Initial rate achieved by flow test & calculations
Long term trend by tracking/modeling the existing production
Production
History
Future
Prediction
F
l
o
w

R
a
t
e
q
o
Time
Production
History
Future
Prediction
F
l
o
w

R
a
t
e
q
o
Time
Both forecasts require
data measurements &
formation re-evaluations;
Decline curves &
forecasting leads to the
propertys future life, rate,
cumulative volume (EUR
or reserves) or fate
Gradual changes in the production rate of a well can be caused
by reservoir and wellbore controlled. They should be sorted
out, as early as possible
Reservoir related production declines:
Reduction in the average reservoir energy (pressure)
Increases in the field water cut in water drive pools
Wellbore controlled production declines:
Tubing or lifting efficiency/effectiveness reduction
Perforation; near wellbore conditions (skin, was, salt,
asphaltenes, sanding, dirts)
Multiphasae flow in the wellbore (loading, plugging, water)

Using past production history to predict future production

If the history is short
0
1,000
2,000
3,000
4,000
5,000
6,000
12/6/99 4/19/01 9/1/02 1/14/04 5/28/05 10/10/06 2/22/08 7/6/09 11/18/10
Date
G
a
s

R
a
t
e

(
m
c
f
/
d
)
History
Future Forecast
0.0
1.0
2.0
3.0
4.0
5.0
Apr-2001 Jan-2004 Oct-2006 Jul-2009 Apr-2012 Dec-2014 Sep-2017 Jun-2020
Date
G
a
s

R
a
t
e

(
m
m
c
f
d
)
Gas Rate
Curve Fit
Forecast
Once production begins, oil, gas, sometimes water, are flowing out of a
reservoir, reservoir energy will be depleted, causing the production to
decline.
Decline trends are manifested by seeing a declining well head gas rate, oil
rate, or a declining wellhead pressure or bottomhole pressure, or an
increasing water-oil ratio (WOR), or a surge of production gas-oil ratio.
Decline patterns are controlled by reservoir size, energy level, flowing rate,
formation characteristics, fluid properties, and operating conditions.
All wells, reservoirs, and fields, will exhibit production decline trend, as
more hydrocarbons have been evacuated from a reservoir of fixed volume,
structurally or stratigraphically.
ARPS DECLINE ANALYSIS
Rate-time decline curve extrapolation is one of the oldest and most often used tools
of the petroleum engineer.
Empirical in original by Arp, with further development by Ramsay, Slider, Gentry,
and Fetkovich.
It starts with Arps empirical rate-time equation and assumes constant pressure
conditions & boundary-dominated flow

Where:
b = decline curve exponent
D
i
= Initial decline rate, t
-1
q = surface flow rate
t = time
Early work by J.J. Arps (1945) from his field observations:
Exponential Decline
Hyperbolic Decline
Harmonic Decline
Commonly called Curve Fitting; empirically established from
wells or fields or pools
Advantages:
Easy to analyze and to forecast
Widely used in reserve evaluation & forecast due to its simplicity
Disadvantages
Too empirical, without thorough theoretical justification or
in-depth understanding
Exponential Decline

Rate Time

Cum Time

Rate - Cum
) 1 ( ) (
t D
i
p
e
D
q
t Q

=
t D
i
e q t q

= ) (
t D q t q
i
= log ) ( log
D
t q q
t Q
i
p
) (
) (

=
Hyperbolic Decline

Rate Time

Cum Time

Rate - Cum
| |
b
i
p
t D b
D b
q
t Q
/ 1 1
) 1 ( 1
) 1 (
) (

+

=
b
i
t D b q t q
/ 1
) 1 ( ) (

+ =
| |
b b
i
i
p
t q q
D b
b q
t Q

=
1 1
) (
) 1 (
) (
Harmonic Decline

Rate Time

Cum Time

Rate Cum
) 1 ln( ) ( t D
D
q
t Q
i
p
+ =
t D
q
t q
i

=
1
) (
) (
ln ) (
t q
q
D
q
t Q
i i
p
=
Decline Exponent, b, identified/substantiated by field observations
Buick C-86-E Decline Forecast Modeling
10
100
1000
0 25 50 75 100 125 150
Days
G
a
s

R
a
t
e

(
m
s
c
f
d
)
exponential
hyperbolic
harmonic
0.164 Bcf
Exponential: b=0
fast decline;
natural depletion; high pressure
pessimistic commonly used as
conservative estimate of the
base case of proved reserves

Harmonic: b=1
slow decline
water encroachment/flooding
aquifer supplies
tight gas; low k rock
b>1 also occurs, but always
check if it is realistic

Hyperbolic: 0<b<1
widely seen in a variety of rocks

SPE 28628
0 < b < 1 b = 0 b=1
b is dependent on reservoir drive, # of layers and their sizes, fluids,
pressure, etc.
Estimated Ultimate Recovery (EUR)
Assume the current trend will continue
Use this trend-line to make forecast future production until it stops
q
Qp
EUR
q
ab
abandonment
Production
history
Nominal Decline
the fractional change of the oil
production rate per unit of time

Effective Decline
the effective decline rate is a
stepwise function where each step
represents the reported production
q
dt dq
dt
q d
D
/ ) (ln
= =
dq
dt
q
1
dt
q
2
q
3
q
4
q
5
q
t
i
i i
e
q
q q
D
1 +
=
ARPS DECLINE ANALYSIS FORECASTING
q
i
t
flat
q
ab
t
life
D
Np
flat
Np
decline
Np
total
=Np
flat
+NP
decline
RF = Np
total
/HIP
q
i
t
flat
q
ab
t
life
D
Np
flat
Np
decline
Np
total
=Np
flat
+NP
decline
RF = Np
total
/HIP
Scoping Economics & Budgetary:

Input: Output:
Resource Volume Production Forecast
Initial & Abandonment Rate

Why Exponential?

fast decline
quick payback
foreseeable
ARPS DECLINE ANALYSIS (Oil Exponential)
1
10
100
1000
0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 9.0 10.0
Year
R
a
t
e

(
b
b
l
/
d
)
Input:
OOIP = 500,000 bbl (total oil-in-place)
t
flat
= 0.5 year (flate rate period)
q
i
= 500 bbl/day (initial rate)
q
ab
= 10 bbl/day (abandonment rate)
Expotential Decline
Output:
Np
f lat
= 91,250 bbl (flat period cum production)
D = 0.4465 / year (annualized decline rate)
Np
total
= 491,825 bbl (total recoverable volume)
RF = 98.4 % (recovery factor)
Decline Duration = 8.8 years (life during decline period)
Project Life = 9.3 years (entire project life)
R/P Ratio = 2.7 years (reserve over production ratio)
ARPS DECLINE ANALYSIS (Gas Exponential)
Input:
OGIP = 10.000 bcf (total gas-in-place)
t
flat
= 1.50 year (flate rate period)
q
i
= 10.00 mmscf/day (initial rate)
q
ab
= 0.10 mmscf/day (abandonment rate)
Expotential Decline
Output:
Np
f lat
= 5.475 bcf (flat period cum production)
D = 0.807 / year (annualized decline rate)
Np
total
= 9.955 bcf (total recoverable volume)
RF = 99.5 % (recovery factor)
Decline Duration = 5.7 years (life during decline period)
Project Life = 7.2 years (entire project life)
R/P Ratio = 2.7 years (reserve over production ratio)
1
10
0.0 1.0 2.0 3.0 4.0 5.0 6.0
Year
R
a
t
e

(
b
b
l
/
d
)
1
10
0.0 1.0 2.0 3.0 4.0 5.0 6.0
Year
R
a
t
e

(
b
b
l
/
d
)
Transient Flow Flow within a reservoir has not reached the
reservoir boundaries.

Pseudo Steady State (PSS) Flow within a reservoir has
reached the reservoir boundaries. Boundary dominated flow.

Time to Pseudo Steady State the time it takes to reach
boundary dominated flow.

Multi-layered No-Cross Flow production of multiple reservoir
layers with no in rock communication.
PRODUCTION DECLINE ANALYSIS
You must consider whether you have
a single layer or Multi-layer with no crossflow?
Multi-layers will have a longer time to PSS, and a b between 0 and 1.
in transient or psuedo-steady state flow? DCA applies for
PSS.
Use caution anytime you DCA during the transient flow period.
is the reservoir depletion or waterdrive drive?
Forecast b and forecast cutoff is dependent on reservoir drive.
is the rock permeable or tight?
Time to PSS increases for tight rock.
is the reservoir going to see changing flowing pressure?
The decline trend will change with changing flowing pressures.

Advanced Production Data
Analysis & Forecasting
An Extension of Arps Empirical
Equation
Definitions of Dimensionless
Variables:
dimensionless rate q
D

dimensionless time, t
D
FETKOVICH DECLINE ANALYSIS
i
D
q
t q
q
) (
=
t D t
D
=
t D
D
e
q
1
=
| |
b
D
t D b
q
/ 1
1
1
+
=
t D t
D
=
) 0 ( > b
) 0 ( = b
SPE 28628
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
0 100 200 300 400 500 600
Days of Production
G
a
s

R
a
t
e
0
200
400
600
800
1000
1200
1400
1600
C
u
m

G
a
s
10
100
1000
10000
10 100 1000
Days of Production
G
a
s

R
a
t
e
10
100
1000
10000
C
u
m

G
a
s
Normally we plot q vs. calendar date or q vs.
cum data for Arps decline on semi-log scale
If we replot q vs. days of production or cum
vs. days of production on log-log scale, we
are seeing Fetkovich trend
1.E+03
1.E+04
1.E+05
1.E+06
1.E-03 1.E-02 1.E-01 1.E+00 1.E+01
tDd
q
D
d
1.E+00
1.E+01
1.E+02
1.E+03
Q
D
d
)
]
(
)
(
[
]
5
.
0
)
/
[
l
n
(
)
(
3
0
0
,
5
0
w
f
p
i
p
s
c
w
e
f
f
e
s
c
D
d
P
P
P
P
h
k
T
r
r
T
P
t
q
q
=
] 5 . 0 ) / [ln( ] 1 ) / [( 5 . 0
/ 00633 . 0
2
2

=
weff e weff e
weff t g
Dd
r r r r
r C t k
t
|
)] ( ) ( [ ) (
) ( 8 . 637
2 2
wf p i p w e t g sc
p sc
Dd
P P P P r r C h T
t G T P
Q

=
|
)] ( ) ( [
]
2
1
) [ln( 1422
wf i
wa
e
MP
Dd
g
p m p m h
r
r
T
q
q
k
=
)] ( ) ( [ ) (
54 . 56
wf i i t
MP
Dd
g
MP
Dd
p
p m p m c
T
q
q
t
t
V
gi
w p
B
S V
OGIP
000 , 1
) 1 (
=
PRODUCTION DECLINE ANALYSIS
Transient Flow
Flow within a reservoir has not reached the reservoir
boundaries.
Pseudo Steady State (PSS)
Flow within a reservoir has reached the reservoir
boundaries. AKA - Boundary dominated flow.
Time to Pseudo Steady State
the time it takes to reach boundary dominated flow.
Multi-layered No-Cross Flow
production of multiple reservoir layers with no in rock
communication.
actual time t
q
material balance time t
e
Q
Q
t
e
=Q/q
Constant Rate Decline Actual Decline
actual time t
q=dQ/dt
actual time t

Q
Q
Rate Integral = Q/t Actual Decline
material balance time

t
e
= Q(t)/q(t)

rate integral (normalized)

q / (p
i
-p
wf
)

derivatives

- d(q/(pi-pwf)) /d(ln(t
e
))
ADVANCED VARIABLE RATES/PRESSURES
FLOWING MATERIAL BALANCE
SUMMARY OF PRODUCTION & DECLINE
Arps Fetkovitch Blasingame
Agarwal &
Gardner
Flow
Material
Balance
Early
Production
yes yes yes
Pseudo-
Steady
State
yes yes yes yes yes
OGIP yes yes yes
EUR yes yes
High K yes yes yes yes yes
Low K yes
Water
Drive
yes yes
W-83 Well/Pool Production Data
Analysis
MANAGING RESERVE UNCERTAINTY: W-83
Reservoir Performance Uncertainty
W-83 Case Study (Gas Well)
Preliminary Proved and Non-Proved Reserve/Resources Booking & Progression
Reconcile Production Data with G&G Data
Drainage Area/Reservoir Tank Size
Decline Pattern/Rate and Recovery Factor
Scada Well Performance Monitoring
Permeability and Well Deliverability
Constant Reserve Calibration
Geological Reserves vs. Performance Reserves
Proved Reserve Promotion/Demotion
Operation Limits (Mechanical and Economic)
Well Work Execution Additional Reserve Addition
Descriptions

Upper Cretaceous
Naturally Fractured Sandstone
Perf Depth: 2853 ~ 2560 mKB

Porosity: 4.3%
Net Pay: 36 ft
Sw: 40%
Sg: 60%
Tr: 68
o
C (154
o
F)
Pr: 22,340 kPa (3240 psi)

Gas Specific Gravity: 0.622
Gas Compressibility: 0.902
FVF: 212 scf/cf
Gas Composition:
C1: 94.12%
C2: 3.37%
CO2:1.5%
W-83
Producing zones
Cretaceous and Upper Jurassic
Low porosity, permeability
Fine to coarse grained litharenites and
conglomerates
Cadotte is most predictable
Blanket sands and conglomerate
Coarsening upward sequence
Falher is least predictable
Narrow shoreline trends
Gething channel sands and congl.
Locally significant
Cadomin conglomerate
Laterally continuous
Usually tight
Nikanassin fluvio-deltaic clastics
Numerous sands = most reserve potential

Structural Depiction & Fold Style
Similar Formation Production Performance Analogs
1
10
100
1,000
10,000
100,000
0 5,000 10,000 15,000 20,000 25,000
Cum Gas (mmcf)
R
a
w

G
a
s

R
a
t
e

(
m
c
f
d
)
8-4-63-11W6
6-19-62-12W6
8-30-62-11W6
d-41-G/93-I-15
b-62-G/93-I-15
b-77-A/93-I-15
c-74-G/93-I-15
c-36-A/93-I-15
d-13-A/93-I-15
b-35-A/93-I-15
16-24-62-13W6
11-24-62-11W6
6 mmcfd
Notes:
1. Almost all those wells from Cadotte and
Cad/Nik formations show harmonic declines,
some rapid, others very slow
2. Short time flow test rates may not be
indicative of onstream production performance,
while the initial productions (the early months)
may be better indicate of ultimate deliverabilities
and thus PDP reserves
Analog Well/Formation Performance: IP Rates vs. Cum Gas
(IP rates used the average of the first three months onstream productions)
-
5,000
10,000
15,000
20,000
25,000
30,000
- 5,000 10,000 15,000 20,000 25,000
Cum Gas (mmcf)
I
n
i
t
i
a
l

G
a
s

R
a
t
e

(
m
c
f
d
)
Narraway
N Grizzly
S Grizzly
ARL 8-30
Cadotte
ARL 11-24
Cad/Nik
BP 16-24
Cadotte
Devon 6-19
Cadotte
CNRL c-74-G
Cad/Nik
CNRL b-82-G
Cad/Nik
CNRL d-41-G
Cad/Nik
Anderson 8-4
Cadotte
CNRL b-35-A
Cad/Nik
CNRL b-77-A
Nik
CNRL d-13-A
Cad/Nik CNRL c-36-A
Cad/Nik
Note:
Overall the higher the IP rates the
greater the cum gas productions
(and thus the greater the PDP
reserves), but the number of wells
in the study is still small to reach
a satisfactory confidence level of
the conclusion.
Deterministic Analysis

Min ~ Most Likely ~ Max @PS

Key Knowns

Gas column height ?
Structural or stratigraphic play?
Sw (estimated from capillary pressures)

Business Cases

Full Cycle Success (unrisked):
PS = 75%
Raw Recoverable 10 ~ 14 bcf
Initial Rate 6 ~ 8 mmcfd

Failure (unrisked):
PS = 5%
Raw Recoverable < 2 bcf
Initial Rate < 2.0 mmcfd
Input Summary Table:
Minimum Most Likely Maximum
Porosity 0.034 0.043 0.057
Average net pay thickness (ft) 30 36 65
Top of Cadotte Subsea Elevation -1365 -1360 -1355
Abandonment Pressure 2000 4000 7000
Midpoint Column height for water product 150 258 315
Drainage Length of Structure 3 4 10
Reference Column height 230 310 350
constant 13.3 13.4 13.5
Output Summary Table:
Minimum Maximum Mean Std Dev
Category: Default
Recoverable Raw Gas (BCF) 0.562255 51.2969 15.7538 6.54448
Average Reservoir Pressure 22257.4 22406.6 22339.1 19.9629
Average Gas Saturation 0.404257 0.727438 0.59413 0.053572
Average Cadotte Formation Temperature 67.3961 70.0659 68.7686 0.310718
Formation Volume Factor 205.086 207.4 206.384 0.261089
Raw Gas Recovery Factor from Abandoment 0.702434 0.914044 0.821345 0.037001
Total Recovery Factor 0.0561453 0.798478 0.578282 0.10753
Hydrocarbon Pore Volume 450.791 8134.17 3075.58 1065.74
Recovery Factor based on dist. from h20 0.0700025 0.885129 0.688747 0.125756
Parameter in determining RF -2.85238 7.1184 2.23474 1.40961
Range in Column Heights 230.014 350 301.628 18.8855
Transition zone thickness from Porosity
Column Height for zone 1 63.0457 216.985 148.592 21.593
Area for zone 1 corrected for dip 646.668 4168.99 2680.28 514.056
column height for zone 1 161.811 239.258 206.024 10.6919
Transition zone corrected for pressure 108.561 160.024 131.728 9.64774
Gas Density
Z Factor 0.902 0.902 0.902 0
Original Gas-in-place (BCF) 3.90502 70.9246 26.747 9.2866
Zone4
Drilling

High angle horizontal well
(70 ~ 80
o
) (5
o
dip)
Under balanced coil-tubing

Goals

To intersect natural fractures
To maximize reservoir
productivity
w-83 Drill Flow Rate vs Pressures (Choke Size: 54/64)
0
5000
10000
15000
20000
25000
0:00 1:12 2:24 3:36 4:48 6:00
Clock Time
P
r
e
s
s
u
r
e
s

(
k
P
a
)
150
175
200
225
250
R
a
w

G
a
s

R
a
t
e

(
e
3
m
3
/
d
)
BHP
WHP
Gas Rate
1 e
3
m
3
= 35 mscf
w-83 Single Point Flow Test (Choke Size Varied)
0
5000
10000
15000
20000
0 4 8 12 16 20 24 28
Elapsed Time (hrs)
S
u
r
f
a
c
e

G
a
u
g
e

P
r
e
s
s
u
r
e
s

(
k
P
a
)
0
50
100
150
200
250
R
a
w

G
a
s

R
a
t
e

(
e
3
m
3
/
d
)
Tubing Pressure (kPa)
Casing Pressures (kPa)
Gas Rate (e3m3d)
Ojay 202/a-038-H/093-I-09 Buildup
10
-3
10
-2
10
-1
10
0
10
1
10
2
1
0
5
1
0
6
1
0
7
Delta Pseudo-T (hr)
D
P

&

D
E
R
I
V
A
T
I
V
E

(
K
P
A
2
/
P
A
S
/
M
3
/
D
)
ENDWBS
PD=1/2
2006/ 01/ 02-0154 : GAS (PSEUDO-PRESSURE)
Linear-Composite Dual-Porosity 3-Zone
** Simulation Data **
well. storage = 0.00412 M3/KPA
Skin(mech) = -3.63
permeability = 3.38 MD
X-Interface(1) = 229. METRE
Mob.ratio(1) = 0.253
Stor.ratio(1) = 0.539
omega = 0.319
lambda = 0.140E-05
Perm-Thickness = 37.2 MD-METRE
Turbulence = 0. 1/M3/D
+y boundary = 150. METRE (1.00)
-y boundary = 298. METRE (1.00)
Initial Press. = 21837.0 KPA
Skin(mech)+DQ = -3.63
Smoothing Coef = 0.,0.
Static-Data and Constants
Volume-Factor = 5.425 M3/KM3
Thickness = 11.00 METRE
Viscosity = 0.01830 uPS.S
Total Compress = .2326E-04 1/KPA
Rate = 181000. M3/D
Storivity = .1100E-04 METRE/KPA
Diffusivity = 656.4 METRE^2/HR
Gauge Depth = 2448. METRE
Perf. Depth = 2507. METRE
Datum Depth = N/A METRE
Analysis-Data ID: GAU002
Based on Gauge ID: GAU002
PFA Starts: 2006-01-01 00:00:55
PFA Ends : 2006-01-24 20:30:03
Ojay 202/a-038-H/093-I-09 Buildup
-100. 0. 100. 200. 300. 400. 500.
1
4
0
0
0
.
1
6
0
0
0
.
1
8
0
0
0
.
2
0
0
0
0
.
2
2
0
0
0
.
2
4
0
0
0
.
Time (hours)
p
r
e
s
s
u
r
e
s

(
K
P
A
)
2006/ 01/ 02-0154 : GAS (PSEUDO-PRESSURE)
Linear-Composite Dual-Porosity 3-Zone
** Simulation Data **
well. storage = 0.00412 M3/KPA
Skin(mech) = -3.63
permeability = 3.38 MD
omega = 0.319
lambda = 0.140E-05
Perm-Thickness = 37.2 MD-METRE
Turbulence = 0. 1/M3/D
+y boundary = 150. METRE (1.00)
-y boundary = 298. METRE (1.00)
Initial Press. = 21837.0 KPA
Skin(mech)+DQ = -3.63
Static-Data and Constants
Volume-Factor = 5.425 M3/KM3
Thickness = 11.00 METRE
Viscosity = 0.01830 uPS.S
Total Compress = .2326E-04 1/KPA
Rate = 181000. M3/D
Storivity = .1100E-04 METRE/KPA
Diffusivity = 656.4 METRE^2/HR
Gauge Depth = 2448. METRE
Perf. Depth = 2507. METRE
Datum Depth = N/A METRE
Analysis-Data ID: GAU002
Based on Gauge ID: GAU002
PFA Starts: 2006-01-01 00:00:55
PFA Ends : 2006-01-24 20:30:03
Single Point Well test of Demonstrating Flow Assurance & Producibility
What was learned from the well test:

Able to Produce Gas Commercially

Formation Pressure from PBU = 21837 kPaa (3167 psi)
Recorder Depth = 2448 mTVD

MPP Depth =2550 mTVD
Formation Pressure MPP = 21999 kPaa (3190 psi)

Static Gas Gradient = 1.588 kPa/m (before & after flow/PBU)

Temperature at Recorder Depth = 80
o
C

Formation Pressure from Previous Studies = 22340 kPaa
Temperature from Previous Studies = 68
o
C
(depth reference to be checked)
t
inv
C
t k
r
| 948
=
Parameters Example
k Permeability md 3.380
Porosity 0.0430
Viscosity cp 0.0177
Ct Compressibility 1/psi 0.000114
t Flowing Time hours 24.0
r Radius of Investigation ft 994.83
m 303.23
|
|
Total Effective Permeability k=3.38 md
Skin =-3.63 (connected to natural fractures)
Minimum Depth of Drainage Radius = 303 m
(70 acres as a result of this flow test)
298 m
150 m
220 m
Initial Volumetric Bookings

Proved
Drainage Area: 1124 acres
(1.5 DSU)

OGIP: 9.66 bcf
Recovery Factor: 58%
Raw Recoverables: 5.58 bcf

Possible Compression Reserves

Probable
Additional Drainage: 1230 acres
OGIP: 10.57
Recovery Factor: 58%
Raw Recoverables: 6.13 bcf

Note:
Before on-stream, SEC allows 1+8
adjacent DSU, if believed capable
producing; once on-stream, 1 DSU
becomes converted to PDP while
the adjacent 8 DSU remain to be
PUD
W-83
1 DSU = 300 ha =741 areas
Production Data: Rate and Pressure Decline Analysis
WHP: inlet and pipeline pressure fluctuations
Raw gas production decline: Arps decline analysis
Integration of well pressure and production rate data
Fetkovitch: constant WHP when rate declines
Blasingame: variable rate & WHP during production
Agarwal-Gardner:
Flowing Material Balance: late-time boundary-dominated flow
Well head temperature
Water gas condensation/water production
Transition water breakout
IPR curves
Liquid loading
Results as of May 31, 2006
(45 days into the production)
Harmonic decline
b = 1.56
Qi = 8,000 mscfd
Index = 0.0162
W-83 Daily Production
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
24-Mar-06 13-May-06 2-Jul-06 21-Aug-06 10-Oct-06 29-Nov-06 18-Jan-07
Date
R
a
w

G
a
s

R
a
t
e

(
m
m
c
f
d
)
0
50
100
150
200
250
R
a
w

G
a
s

R
a
t
e

(
e
3
m
3
d
)
mmcfd
May '06 Forecast
e3m3d
Production Rate Decline Related to
Reservoir Production mechanism: natural depletion? water drive?
Wellbore problems: liquid loading, multiple phase, non-
hydrocarbon?
Reservoir characteristics:
Smaller reservoir tank? Compartmentalized?
Misinterpreted reservoir parameters (net pay, transition)?
Low matrix permeability? Lack of natural fracture networks/connectivity?
Proved Reserve Calibrated and Re-Filed
How much producible/economic reserve this well can see?
New reserve/resource estimate and new forecast
Well workover/facility options?
Tubing size change? Acidizing/fracturing? Compressor?
W-83 Well Reserve Analysis (as of May 31, 2006)

Volumetric Estimates Performance Analysis

OGIP 9.66 bcf 2.22 bcf
RF 57.83%
Raw Recoverable 5.58 bcf 1.8 ~ 2.0 bcf
Defined Drainage 1124 acres 250 acres ?

Permeability 3.38 md (PTA) 0.4 ~ 1.5 md (RTA)
Skin -3.63 (PTA) -4.5 (RTA)

Netpay 36 ft (11 metres) 36 ft (11 metres)
Porosity 4.3% 4.3%
Sw 40% 40%

Without compression, the well will likely see (against the line pressure of 8500 kPa or 1250 psi)
a PDP reserve around 1.8~2.0 bcf in 3 years
by Christmas 2006, the cum production will be 0.95 bcf

With compression, at 3500 kPa (500 psi) well head pressure, the well will probably see
a total PDP reserve of 2.2 ~ 2.5 bcf in 3 years
Pr @June 2006
Pr @Oct 2006
8500 kPa Line Pressure
3500 kPa Line Pressure
We are here today
Pr @April 2006
concave
downward

reaching
boundaries?
high reserve low reserve
high perm
low perm
early flow
transient
late-time flow
boundary-dominated
Results as of
December 12, 2006
(240 days into the
production)
W-83 Daily Production
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
24-Mar-06 13-May-06 2-Jul-06 21-Aug-06 10-Oct-06 29-Nov-06 18-Jan-07
Date
R
a
w

G
a
s

R
a
t
e

(
m
m
c
f
d
)
0
50
100
150
200
250
R
a
w

G
a
s

R
a
t
e

(
e
3
m
3
d
)
mmcfd
May '06 Forecast
e3m3d
W-83 Production & Forecast
1,000
10,000
4-Mar-06 23-Apr-06 12-Jun-06 1-Aug-06 20-Sep-06 9-Nov-06 29-Dec-06
Date
R
a
w

g
a
s

R
a
t
e

(
m
c
f
d
)
0
200
400
600
800
1,000
C
u
m

P
r
o
d
u
c
t
i
o
n

(
m
m
c
f
)
Raw Ga Rate
Forecast
Cum Forecast
Cum Production
Christmas
0.95 bcf
2.2 mmcfd
we are here today
w-83 Well Gas Material Balance
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
0.00 0.25 0.50 0.75 1.00 1.25 1.50 1.75 2.00 2.25 2.50
Cum Gas Production (bcf)
P
/
Z
,

p
s
i

Date P/Z Cum P psi
15-Apr-2006 3635 0 3255
15-May-2006 3430 0.209 3046
16-Jun-2006 3279 0.362 2901
16-Jul-2006 3125 0.484 2756
15-Aug-2006 2966 0.592 2611
15-Sep-2006 2804 0.688 2466
16-Oct-2006 2638 0.771 2321
15-Nov-2006 2470 0.85 2176
15-Dec-2006 2300 0.952 2031
Op Limit 529 1.625 508
If we are able to simulate & predict the performance
of this well
Then a follow-up in-production well pressure buildup
should give an answer (by checking the current
average reservoir pressure)
w-83 Well Power Outage between July 7-10, 2006
0
2000
4000
6000
8000
10000
12000
14000
16000
18000
7-Jul-2006 7-Jul-2006 8-Jul-2006 8-Jul-2006 9-Jul-2006 9-Jul-2006 10-Jul-2006 10-Jul-2006
Date
W
e
l l h
e
a
d

P

(
k
P
a
)
WellHead P BTHP
kpaa kPaa
1.5 kpa/m
12022 15772
12140 15890
12267 16017
12389 16139
Modified Reserve Bookings

Proved
Drainage Area: 250 acres?
(0.34 DSU)

OGIP: 3.26 bcf?
Raw Recoverables: 2.22 bcf?

Possible Compression Reserves:
0.5 bcf?

Probable Resources (non-proved)
Total Drainage: 2104 acres?
OGIP: 18.08 bcf?
Recovery Factor: 58%?
Raw Recoverables: 10.58 bcf?

1 DSU = 300 ha =741 areas
W-83
w-83 Well Rate vs Cum Forecast
0
1,000
2,000
3,000
4,000
5,000
6,000
7,000
8,000
9,000
0 500 1000 1500 2000 2500 3000 3500
Cum Gas (mmcf)
R
a
w

g
a
s

R
a
t
e

(
m
c
f
d
)
Raw Gas Rate
Forecast
economic/
operation
limits
Compression?
18 months
10-3 10-2 10-1 1.0 101 102
2 3 4 5 6 7 8 2 3 4 5 6 7 8 2 3 4 5 6 7 8 2 3 4 5 6 7 8 2 3 4 5 6 7 8
Material Balance Pseudo Time
10-2
10-1
1.0
101
2
3
4
5
7
2
3
4
5
7
2
3
4
5
7
N
o
r
m
a
l i z
e
d
R
a
t
e
, I n
t
e
g
r
a
l , D
e
r
i v
a
t
i v
e
Blasingame Typecurve Analysis
a-38-Hcadotte 2007 october
10-4 10-3 10-2 10-1 1.0 101
2 3 4 5 678 2 3 4 5 67 2 3 4 5 678 2 3 4 5 67 2 3 4 5 6 7 2 3 4 5 678
Time
10-3
10-2
10-1
1.0
101
2
3
4
6
8
2
3
4
6
8
2
3
4
6
8
2
3
4
6
8
R
a
t
e
, C
u
m
u
l a
t
i v
e
P
r
o
d
u
c
t
i o
n
Fetkovich Typecurve Analysis
10-5 10-4 10-3 10-2 10-1 1.0 101 102
2 3 4 56 8 2 3 4 56 8 2 3 4 56 8 2 3 4 56 8 2 3 4 56 8 2 3 4 56 8 2 3 4 56 8
Material Balance Pseudo Time
10-2
10-1
1.0
101
102
2
3
5
7
2
3
5
7
2
3
5
7
2
3
5
7
2
3
5
7
N
o
r
m
a
l i z
e
d
R
a
t
e
, D
e
r
i v
a
t
i v
e
Agarwal Gardner Rate vs Time Typecurve Analysis
0.00 0.20 0.40 0.60 0.80 1.00 1.20 1.40 1.60 1.80 2.00 2.20 2.40 2.60 2.80 3.00
Cumulative Production, Normalized Cumulative Production , Bscf
0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
P
r
o
d
u
c
t
i v
i t
y
I n
d
e
x
, M
M
s
c
f
d
/ (
1
0
6
p
s
i 2
/ c
P
)
0.000
0.001
0.002
0.003
0.004
0.005
0.006
0.007
0.008
0.009
0.010
0.011
0.012
0.013
N
o
r
m
a
l i z
e
d
R
a
t
e
, M
M
s
c
f
d
/ (
1
0
6
p
s
i 2
/ c
P
)
0
200
400
600
800
1000
1200
1400
1600
1800
2000
2200
2400
2600
2800
3000
3200
3400
3600
P
/Z
* , p
s
i
Flowing Material Balance
Original Gas In Place
Legend
P/Z Line
Flowing P/Z*
Productivity Index
Decline FMB

Day 3 PM - Production Forecasting & Decline Curves

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