Advances in Computer-Aided Well-Test

Interpretation
Roland N. Horne, SPE, Stanford U.
Summary
Several different computer methods combine to constitute a com-
puter-aided well-test interpretation. This paper compares some of
the different approaches currently in use. Future directions are dis-
cussed, as are deconvolution, pressure derivatives, model recogni-
tion, nonlinear regression, and confidence intervals.
Introduction
Despite the feeling expressed several times over the past 40 years
that well-test analysis had reached its peak development, an ex-
amination of recent advances shows continuous expansion in capa-
bility, with future improvement likely. The expansion in interpreta-
tion capability over the past decade arose mainly from the
development of computer-aided techniques, which, although
introduced 20 years ago, have come into use only recently. The
broad application of computer-aided interpretation originated with
the improvement of the methodologies and continued with the ex-
pansion in computer access and capability that accompanied the ex-
plosive development of the microcomputer industry.
This paper focuses on the different pieces of the methodology that
combine to constitute a computer-aided interpretation and attempts
to compare some of the approaches currently used. Future directions
of the approach are also discussed. The separate areas discussed are
deconvolution, pressure derivatives, model recognition, nonlinear
regression, and confidence intervals.
Background
During the 1970's and 1980's, mathematical and numerical tech-
niques provided new well-test solutions for a wide variety of reser-
voir configurations, such as fractures, layered reservoirs, and multi-
ple porosities. The complexity of these models and the large number
of parameters that they contain limited their analysis by traditional
graphical methods. Of the two main types of graphical analyses,
straight-line methods (such as Horner plots) can provide estimates
of, at most, two unknowns (from the slope and intercept of the
line). Type-curve methods can usually provide only three parame-
ters---one from each of the two axes and one from a curve from the
family of curves used. In the process of seeking a method to match
more unknowns, work began on the use of nonlinear regres-
sion. Earlougher and Kersch'sl 1972 paper was key in this
area. That and later work showed that nonlinear regression could
not only match reservoir models with more than a few parameters,
but also provide several significant advantages over graphical
matching. One important advantage was the illustration of the use
of confidence intervals,
2
another was the application of nonlinear
regression to reservoir responses that resulted from complex (vari-
able-rate) impulses.
3

4
Matching complex models and complex im-
pulses made up the challenge in and motivation for computer-aided
analysis.
Methodology
Because the underlying principle of well-test interpretation is to
match a mathematical model to an observed reservoir response, it
is necessary first to decide which mathematical model, out of the
plethora available, is most appropriate to the actual reservoir. This
Copyright 1994 Society 01 Petroleum Engineers
Original SPE manlJSClipt. Advances in CompUlerAi_ Well Test Interpretation. re-
ceived lor review Nov. 23. 1992. Revised manuscript received AprilS. 1994. Paper accepted
lor publication May 2. 1994. Paper (SPE 24731) first presented at the 1992 SPE Annual Tech-
nical Conlerence and Exhibition held in Washington. Oct. 4-7.
.JPT July 1994
model recognition requirement holds for both traditional graphical
analysis and computer-aided techniques. In a traditional analysis,
the reservoir model was recognized by characteristic features of its
response, by presenting the observed data in a standard graphical
form, such as a log-log or Horner plot. In modern graphical
analyses, the use of pressure-derivative curves
5

6
has become stan-
dard because the curves have greatest precision in the parts of the
response of greatest interest and have easily identifiable characteris-
tics. Automated model recognition methods, such as the artificial
intelligence approaches described by Allain and Horne,
7
rely on the
same characteristic features of a derivative presentation.
Nonetheless, even the derivative type curves are based on the re-
strictive assumption that the impulse giving rise to the pressure-
transient response was a step change from one constant flow rate to
another. Because the familiar characteristics are based on this step-
rate-change assumption, and because practical well tests rarely ex-
perience so simple a rate change, it is frequently necessary to correct
the observations to calculate the way the response would have
looked had the rate truly changed suddenly from one constant value
to another. This calculation process is called deconvolution.
Once the appropriate reservoir model has been recognized, the
unknown reservoir parameters (permeability, skin, fracture length,
reservoir size, etc.) can be estimated by matching the model and ob-
served responses. In a traditional analysis, this may be done by
matching a part ofthe response (e.g., matching the straight-line por-
tion on a Horner plot) or by matching the entire response (e.g., in a
type-curve match). In a computer-aided analysis, the matching is
achieved by nonlinear regression. It is important to note that nonlin-
ear regression, like a type-curve analysis, matches the entire set of
observations, hence the name "automated type-curve analysis" that
is sometimes (probably incorrectly) given to this technique. Unlike
type-curve matching, nonlinear regression is not dependent on the
impulse having been a step change between constant flow rates.
Besides eliminating the requirement for simple flow rate changes,
nonlinear regression also has the significant advantage of permit-
ting the calculation of confidence intervals on the parameter estima-
tions. The calculation of a confidence interval provides a quantita-
tive estimate of how good the estimate is and frequently illuminates
both strengths and inadequacies in the data and the interpretation
process. For example, confidence intervals have revealed that some
parameters are very poorly determined from a well-test interpreta-
tion, including the dual-porosity parameters, 0) and /.., the conduc-
tivity of a finite-conductivity fracture, and the verticallhorizontal
permeability ratio in a horizontal well test. This information was not
fully understood from traditional analysis, and a naive application
of nonlinear regression does not necessarily reveal it. The advan-
tages of using confidence intervals in well-test analysis have been
discussed in detail for 15 years.
2

9
Thus, to summarize the steps found in most computer-aided inter-
pretation, the pressure-transient data first go through a deconvolu-
tion calculation to reduce them to a would-have-been constant-
flow-rate/step-change response. Then the data are presented in a
pressure-derivative plot (or symbolic computer description) to
achieve model recognition, after which the original (not decon-
volved) pressure response is matched to the appropriate model us-
ing nonlinear regression. Finally, the confidence intervals are esti-
mated to evaluate the validity of the results. Fig. 1 illustrates these
steps.
Deconvolution
Suppose that the dimensionless pressure response to a step-rate
change qD=q/qr from 0 to 1 at dimensionless time tD=O is called
599
Data
Model
Recognition
Confidence
Intervals
Nonlinear
Regn:ssion
Fig. 1-SChematic of computer-aided interpretation sequence.
PDO. Then the response PD to a variable flow rate, lJD. will be given
by Eq. 1 in Table 1.
This convolution integral forms the basis of the method of calcu-
lating the variable rate from the constant-rate response. Deconvolu-
tion is the reverse process by which the constant-rate response,PDO,
is calculated from the variable-rate response, PD, and the informa-
tion about the rate variation, lJD. There are two main types of decon-
volution methods. The first uses an inversion of a numerical repre-
sentation of the integral in Eq. 1.10 This inversion process is often
unstable and usually requires imposition of constraints on the rate
of change of the functions. Thus, this method is unsatisfactory be-
cause it is not always clear whether real information has been dis-
guised by the constraints. The second type of deconvolution uses
the Laplace transform and has been known since the early work of
van Everdingen and Hurst
ll
in 1949. Taking the Laplace transform
of Eq. 1 turns the convolution integral into a simple multiplication
(Eq. 2, Table 1). The Laplace transform of the constant-rate solution
can then easily be recovered from the variable-rate solution (Eq. 3,
Table 1).
The real-time form of PDO then can be computed using the Steh-
fest
12
inversion algorithm. As Kuchuk
13
and Bourgeois and
Horne
l4
pointed out, Laplace space deconvolution with Eq. 3 is
often unstable at early time because the variable flow rate caused by
wellbore storage gives rise to the deconvolution equation (Eq. 4,
Table 1). During the wellbore storage period, PD is given by Eq. 5
in Table 1, so the denominator in Eq. 4 becomes zero or oscillates
around zero owing to inaccuracies in the computation. This, then,
is the source of the instability. The solution to this difficulty is to add
a small amount of wellbore storage, CrD, to stabilize the deconvolu-
tion of Eq. 3 or 4, as in Eq. 6 in Table 1.
As examples of this technique, Fags. 2 and 3 show the pressure and
rate data from a real field test reported by Kuchuk.13 Deconvolution,
leaving in the small residual wellbore storage, provides the estimate
of constant-rate pressure shown in Fig. 3.
14
This deconvolved pres-
sure and its derivative can then be used for model recognition.
Fig. 2-Flow-rate history for Well A.13
600
TABLE 1-ESSENTIAL EQUATIONS
pcI..te) = (0 Poo (T) - T) dT .................. (1)
po<s) = poo(s) . sqo<s) ............................... (2)
sp (s) = ..................................... (3)
DO sqO<s)
Sp- (S) sP,j..s) s ........................ (4)
DO = 1 - Co#PO<s) -
Po = 1/s2C
o
........................................ (5)
sp (s) = sP,j..s) . ........................... (6)
DO sqO<S) + C,o# P,j..S)
ilp/ilt = .t -1(SP) ...................................... (7)
n 2
mjnE = I[pmeasured(t;) - Pcatculaled(ii, t;)] .............. (8)
a ;=1
n
"!!nE = IlpmeasUrsd(t;) - PcalcUlaled(ii, t;)1 ............... (9)
a ;=1
Pressure Derivative
The pressure derivative, popularized by Bourdet et al.
5
in 1983,
gains its usefulness from two principal features. The first is that the
most significant part of the response (the radial flow period) hap-
pens to' coincide with small values of the pressure-derivative func-
tion. Therefore, the pressure-derivative plot has greatest precision
at the place needed most. The second useful property is that the dif-
ferentiation procedure accentuates subtle changes in the pressure
history, them easier to identify. The algorithm suggested by
Bourdet et al. has become the most common for computing deriva-
tives.
Four more recent algorithms have attempted to overcome the dif-
ficulty of obtaining smooth derivatives. The first 15 uses a numerical
computation of the Laplace transform of the measured pressure, af-
ter which the derivative can be found from the Stehfest inversion
(Eq. 7, Table 1).
The numerical computation of the forward transform imposes
some difficulties because it is necessary to extrapolate the pressure
history over times preceding and following the actual measure-
ments. Bourgeois and Horne
14
provided an algorithm derived from
Romboutsos and Stewart'sl6 earlier procedure, which overcomes
much of the extrapolation difficulty.
The algorithm described by Stewart and Du 17 uses a spline repre-
sentation of the data, minimizing a merit function based on the error
Fig. 3-Pressure history and deconvolved pressure for Well A.14
July 1994.JPI'
10
....
.............. ~ . ......................................................... .
.......... : : : : ; ; ; : ; ; ; ; ~ ~ ; : : : : : : : : : : : ............. ..
100
lI(s"'cd)
100000
Fig. 4-Laplace pressure and derivative type curves.
14
mean square and the second derivative of the spline. Lane et al.
1S
proposed a method that also computes a spline representation of the
data but uses shape constraints based on possible solution types.
Like Stewart and Du's approach, this method requires user interac-
tion.
Allain and Houze 19 suggested a third spline technique that passes
a curve through the points of a "sketch" of the data determined with
Allain and Home's
7
feature extraction procedure.
These recent algorithms may yet become prevalent, but the incon-
venience of user interjection and/or the complexity of the smooth-
ing will probably keep them from replacing the widely used Bour-
det et al.
6
approach.
Another way of presenting the diagnostic plot was developed re-
cently by Bourgeois and Home,14 who proposed the use of the La-
place pressure, SPD, and its derivative as a means of displaying con-
ventional plots in Laplace space. The advantage of the Laplace
space presentation is that deconvolution is straightforward (it re-
quires only the division shown in Eq. 3 in Table 1) and numerically
stable. Fig. 4 shows an example of a Laplace pressure type
curve. As discussed later, there is also a significant advantage in us-
ing Laplace pressure during nonlinear regression.
Model Recognition
A wide variety of different reservoir and well configurations have
easily recognizable characteristics on a pressure-derivative
plot. This "one-plot" solution significantly expanded the possibili-
ties for automation of model recognition. Automated model recog-
nition by artificial intelligence techniques is a challenging problem,
requiring that the computer first achieve a "vision" of the character-
istics of the data and then consider that vision in the context of a
"knowledge base" of rules. Various workers have applied different
approaches to these problems, and a standard procedure has yet to
appear.
AI-Kaabi et al.
20
implemented feature extraction (the vision) in
a hyperstack that used the human operator to describe features of the
data. The hyperstack also formed the basis of the if/then rules that
made up model recognition. Allain and Home
7
used a symbolic rep-
resentation approach, achieving feature extraction by developing a
"sketch" of the data. The advantage of the symbolic sketch ap-
proach is that it allows the computer to be cognizant of the corre-
spondence between parts of the data and parts of the model response
(such as infinite-acting radial flow). The symbolic approach was
JPT July 1994
also used by Stewart and Du, who used a more detailed description
of the extracted features.
A disadvantage of the symbolic approach is that it is adversely af-
fected by noise. An uncharacteristic feature in the middle of an
otherwise conventional response may throw off an artificial intelli-
gence knowledge-based program. Allain and Home developed a
"nonideality-sensitive" procedure, but at the cost of major complex-
ity in the computational sequence.
AI-Kaabi and Lee
21
described a completely different approach to
model recognition. They used neural networks to identify the mod-
el. The neural-network approach has the advantage of being insen-
sitive to noise and can recognize the reservoir model despite inter-
vening nonidealities in the data. The disadvantage of the
neural-network approach is that it has no vision of the characteris-
tics of the data and therefore allows no further reasoning as to which
part of the data is associated with specific reservoir flow regimes.
Perhaps the best approach to automated model recognition would
be the hybrid approach described by Allain and Houze.
19
In such an
approach, a symbolic description of the data would be developed
from the sketch, and the model would be identified by a neural net-
work. The initial parameter estimates could then be obtained by the
same rule-based procedure described by Allain and Home.
Model recognition need not depend on the pressure derivative. To
overcome the problems of generating a derivative free of noise,
some authors have proposed the use of a pressure integral.
22
,23
However, the pressure integral has less definition than the derivative
and has less clearly definable characteristics. Thus, greater attention
has been given to methods to smooth the derivative rather than re-
place it entirely.
It is worth considering the nature and purpose of the model-recog-
nition approach. Despite its perception as a black art, model recog-
nition is actually not difficult for a human interpreter. Allain and
Home's rule-based artificial intelligence program had only a mod-
est number of rules to describe the models compared with a large
number of rules to detect and avoid nonidealities. Because model
recognition can be performed straightforwardly by a human, why
ask for the computer to do it? First, an artificial intelligence model-
recognition program can detect all reservoir models that are consis-
tent with the data, whereas a human interpreter may be satisfied with
the first or the easiest one found. Second, automation of the model-
recognition step provides a means of fully mechanizing the inter-
pretation, allowing intelligence to be placed within the measuring
hardware and perhaps some day unattended monitoring of perrna-
601
10
Residual
0.1
Case 01
5 parameters
0.01
o ~ ~ ~ ~ = = ~ ~
20
Fig. 5-Comparison of convergence, five-parameter model.
30
nently installed pressure gauges. Finally, and most importantly,
association of specific data ranges with specific flow regimes allows
interpretation software to be more sensitive to inconsistencies in the
data and blunders on the part of the human well-test analyst.
Because a well-test interpretation incorporates many other kinds
of information than just pressure-transient data (such as geological
description or drilling records), it is a naive hope to be able to cir-
cumvent the human interpreter entirely. Methods to include multi-
ple forms of information and qualitative data are the subject of re-
search in the general artificial intelligence field; however, a true
multitalented artificial intelligence program for well-test interpreta-
tion is probably years away.
Nonlinear Regression
Instead of matching graphs on pieces of paper, nonlinear regression
matches pressure-transient data directly to the mathematical mod-
el. The two main advantages of doing this are that it is oflittle conse-
quence if the flow rate was not constant and that confidence inter-
vals may be computed to evaluate quantitatively whether the
interpretation is valid. Other advantages are that more complex
models with more unknown reservoir parameters may be matched
and that the procedure obtains a consistent interpretation by match-
ing all the data instead of specific subranges of it. Furthermore, by
matching data that lie in the transition regions usually ignored by
traditional graphical analysis, it is possible to interpret tests that
would not have enough data for conventional interpretation. It is not
that nonlinear regression allows us to design well tests of shorter
duration; rather, nonlinear regression allows us to recover an an-
swer from tests that were unintentionally cut short or could not poss-
ibly be run for sufficient time (e.g., in a tight gas reservoir).
In nonlinear regression, the objective is to minimize the sum of
the squares of the differences between the measured data and the
calculated reservoir model. The unknown reservoir parameters (k.
S.O), A" C, r
e
, etc.) are modified until the objective function cannot
be made any smaller. Referring to these parameters as a vector a
of m unknowns, then the minimization over n measured pressure
data can usually be stated in terms of the squares of differences in
pressure (Eq. 8, Table 1).
There are three primary types of methods used to minimize this
objective function in well testing. The first and most common are
gradient methods based on Newton's method. A second gradient
method
24
,25 is based on optimal control theory. Finally, there are
different classes of direct search methods, such as that used by
Chang and Ershaghi.26
Well-test applications have been a stringent test of nonlinear re-
gression algorithms because the reservoir models tend to be weak
functions ofthe unknown parameters. In addition, Newton's meth-
od by itself is not guaranteed to converge to a minimum unless the
Hessian matrix, H, is positive-definite. One of the simplest modifi-
602
1000
100
Case 02
6 parameters
10
Residual
GM
0.1
NB
0.01
0 20
Iterations
Fig. &-Comparison of convergence, six-parameter model.
30
cations to H is the Gauss-Newton (GN) method, which removes the
second-order derivative terms in Newton's method, making H posi-
tive-definite and simplifying the computation by avoiding the need
to evaluate the second derivatives. The GN method was used in the
early papers by Earlougher and Kersch
1
and Dogru et al.
2
and lies
at the center of many later methods.
One of the most common variants of GN is the Gauss-Marquardt
(GM) method, which improves the condition of the Hessian by ad-
ding a small constant term to the diagonal. Rosa and Home
8
found
that the GM method worked best when combined with a line search
(such as the one described by Bard
27
) and penalty functions to limit
the search space. The GM approach was also adopted in Chang and
Ershaghi's26 and Abbaszadeh and Kamal's28 work. The GM modi-
fication is very effective but may seem to be a heavy-handed way
to improve the condition of the matrix; other methods have modified
only the eigenvalues ofH that need repair. The Newton-Greenstadt
(NG) and Newton-Barna (NB) methods
29
modify negative and/or
small eigenvalues, and in doing so can make even a Newton (se-
cond-order derivative) method converge. The NG and NB methods
are useful when more than one parameter is poorly determined (as
in reservoir models with many parameters) but generally do not
work any better than GM otherwise. Nanba and Home
30
proposed
the modified-Gauss-Cholesky (MGC) method as an improvement
over GM. The MGC approach also uses eigenvalue modification
similar to that of NB and is a derivative of the modified Cholesky
approach suggested by Gill et al.
31
Finally, yet another eigenvalue
modification approach is used in the rotational discrimination and
transformational discrimination approaches,32 which have been
used for decline-curve matching.
33
A variant of these approaches is the variable projection (VP)
method, which can separate the linear and nonlinear parameters in
the problem. VP has been used in well-test applications
4
but does
not usually offer a significant advantage because most of the param-
eters are nonlinear.
Among these many different approaches, the most robust is prob-
ably the MGC method,30 which is rapidly convergent, is computa-
tionally efficient, and works well for reservoir models with many
parameters or weakly determined parameters. The GM method is
almost as good in many cases and is easier to implement algorithmi-
cally. The GM method has also been successfully af,plied to prob-
lems with many and weakly determined parameters. 4 As examples
of the comparative merits of the different methods, Figs. 5 and 6
30
show that the GM method converges faster than the MGC and NB
methods in straightforward problems, even with one poorly deter-
mined parameter (Fig. 5), but is adversely affected by the addition
of a second poorly determined parameter (Fig. 6).
Most of the methods described above profit from careful use of
auxiliary procedures, such as the line search algorithm27 and the
penalty function approach.
8
,28 Line searching is a way of moving
cheaply toward the optimum solution by computing only function
July 1994 .JPl'
Hom.r pktt
leoo
11500
1700

.
:

..
11500
150
1400
I
Storage Skin Wodel:
Permeability (md) - 120.00 +- (,macceptoble)
Skin - 24.155 +- 17.58 (unalCceptabte)
storo. 5TB i - .0243 + - 6.0B u cc table
100 1000 1.'0 .. 10
latO 5
(t+dettat)/dettat
Fig. 7-First solution (k= 120, 5= 24.5).
evaluations and not derivatives. Penalty functions improve the con-
vergence rate by restricting the search space to physically reason-
able values.
It is worth mentioning the method by which the parameter gradi-
ents are evaluated. Some authors
28
have calculated them by finite
differences, which saves considerable algebraic effort when devel-
oping the computer programs but which is slower to compute. Finite
differences may also be useful for reservoir models whose solutions
are only available by numerical techniques. However, it is generally
faster and more robust to evaluate the gradients directly from their
full algebraic A key issue in this regard was introduced
by Rosa and Home, who evaluated the parameter gradients in La-
place space before inverting them to real space with the Stehfest al-
gorithm. This concept was taken further by Bourgeois and Home,14
who performed the entire nonlinear regression in Laplace space,
making the procedure faster by a factor of about eight (for a Stehfest
value n=8). The key in this approach is to match notp(s) but spes);
otherwise, there is insufficient sensitivity in the Laplace space func-
tion to obtain a good parameter estimation.
Some regression methods work without evaluating gradients of
the function at all and reach the optimum by direct search. Chang
and Ershaghi
26
applied one such method to well-test applications.
They described a derivative-free search approach. This kind of ap-
proach is probably most useful for scanning the search space to
locate the vicinity of the optimum solution before using gradient
methods to find the final solution.
26
Such a "first guess" procedure
is definitely an advantage because nonlinear regression algorithms
converge more quickly when they start out close to the optimum
solution. Having a scan over a broader search space can also help
avoid convergence to local optimum (which is a source of non-
uniqueness in well-test interpretation). Another derivative-free
method is the polytope method described by Gill et al.
31
and used
by Carroll and Horne.
35
This approach is useful for functions (such
Iog(E)
n 2
Fig. 9- E = I [P..-su,.,.,( tl) - pcalcula/lJd(ii, t
i
)] as a function of
kand S. 1=1
JPI' July 1994
Homer ptDt
____ __ ____ ____ ____ -,
UIDD
1700
,.,00
1500
+- 41.5"
Skin - 1 4.38 +- 10.3e (vnac:ceptable)
1400 sto STB - .0248 +- 8 .24" c W-
I 10 100 1000
(I+dolto.)/doltat
'.,0
5
Fig. 8-Second solution (k=81, 5=14.4).
as those obtained numerically} that have some roughness close to
the optimum solution, but is conceptually a gradient-following
method that does not have the scanning advantage of the derivative-
free search method.
Yet another different formulation of the minimization problem
arises in the optimal control theory (OCT) approach.
24
.
25
For com-
plex problems like automatic history matching of reservoir simula-
tions,36 OCT methods have the advantage that the gradients can be
evaluated very quickly independent of the dimensionality of the
problem. This is a very important consideration in problems with
many unknowns but is of lesser significance in well-testing applica-
tions that have relatively few.
Finally, recent work has looked at other kinds of optimization
than straightforward nonlinear regression. By minimizing the sum
of squares, nonlinear regression becomes susceptible to "outlier"
data points that may be significantly in error and increase the objec-
tive function disproportionately compared with other points (which
have less error). A way to avoid this is to use so-called robust opti-
mization techniques such the least-absolute-value (LAY) approach
that minimizes according to Eq. 9 in Table 1. This approach was
used in well-test applications
37
and was found to have significant
advantage over standard least-squares regression for data.
Confidence Intervals
Dogru2 illustrated the fundamentals of the evaluation of confidence
intervals on the parameter estimates from a well-test interpreta-
tion. This work formed the basis of Rosa and Home's8 work. They
showed how confidence intervals can be used for a quantitative
evaluation of how good the interpretation is.
Confidence intervals are functions of the objective function, E,
the correlation between parameters, and the number of data relative
to the number of unknowns. In most modem well tests, there are
usually many more data than unknowns, so the confidence interval
-plot

stot'CI ... Skin Yodel:
(md)
Storag. .0700
800
i 400

200
o
10 100 1000 1.tO 4 1.10 5
( .......... )/dollol
Fig. 10-SPE Test Problem 3, regression match (Horner plot).
603
Rat. hiaory

75

m
....
..
50

II:
25
o
1GOO 1G50 2000 2050 2100 2150
nm. how ....
Fig. 11-5PE Test Problem 3, flow-rate history.
is mainly a function of E (Le., how well the model fits the data or
how noisy the data are) or the correlation between parameters (Le.,
whether we can change one parameter and make a compensating
change in another parameter that results in a match that is just as
good). The importance in knowing about correlation between pa-
rameters cannot be overstated; permeability and skin factor are
strongly correlated in many interpretations, giving rise to consider-
able uncertainty in the answer. As an example, consider two
matches to the same data set, as shown in Figs. 7 and 8. Both
matches look very good, yet the skin factors differ by almost a factor
of two! The reason is revealed in Fig. 9, which shows that there are
many possible combinations of permeability and skin that give rise
to similar low values of the difference between calculated and mea-
sure pressures (indicated by the constant-depth "valley" in the ob-
jective function surface). In this case, the confidence intervals lie
well outside the acceptable range.
38
Recognizing that neither of the
two interpretations fits the criteria of an acceptable match, we would
reject them both. Without the confidence intervals, an interpretation
engineer might have accepted either set of answers, comforted by
the visual appearance of the match.
Confidence intervals are useful for showing us good and bad an-
swers. Fig. 10 illustrates a nonlinear regression match to SPE Test
Problem 3 from the 1992 SPE Petroleum Computer Conference test
suite.
39
Since the test has a variable flow rate (Fig. 11), it is difficult
to discern whether the data satisfy traditional analysis criteria, such
as the 112 log cycle rule, and the Homer plot (Fig. 10) has not clearly
reached a straight line. Nonetheless, nonlinear regression fits the
data and provides almost acceptable confidence intervals for all but
the initial pressure. These data are too short for conventional analy-
sis because they fail to reach infinite-acting radial flow (Fig. 12}, de-
spite being 150 hours long. The use of the flow rate information and
nonlinear regression allows the answer to be recovered from the
data within the transition period. The flow rate information provides
us more complete information about the impulse imposed on the
TABLE 2-COMPARISON OF ESTIMATED CONFIDENCE
INTERVALS WITH OBSERVED VARIATION BETWEEN EIGHT
DIFFERENT INTERPRETERS IN SPE TEST PROBLEMS39
Problem Parameter Mean
Standard Confidence
Deviation Interval
Problem 1 k,md 0.25 0.35 19%
S 17.65 29.69 1.2
Problem 2 k,md 11.67 11.51 17%
S -2.46 2.25 0.56
Problem 3 k,md 13.73 12.98 15%
S 22.14 27.48 0.98
Problem 4 k,md 5,772.23 9,650.87 129%
S 11.05 17.37 49
604

..
..
.!l
Ii
Q
100
100
10
1.,0' -2.
1.10
Log-log plot

/
.r.
.1'
I:
..
.
10 100
Fig. 1Z-5PE Test Problem 3, derivative plot.
1000
reservoir; nonlinear regression provides the means for us to use this
extra information. Finally, the confidence intervals provide us a
way to determine whether we have obtained an acceptable answer.
In SPE Test Problem 3, the results summarized by Baldwin and
Norris
39
also demonstrate the relationship between the estimated
confidence intervals and the actual uncertainty. Table 2 shows the
mean and standard deviation between the estimates of permeability
and skin from each of the eight interpretations submitted for the
comparison. Because the four data sets were too short for proper
analysis, the answers from different interpreters varied widely. This
variation (which may be quantified by comparing the standard devi-
ation to the mean) is reflected in the estimate of the confidence inter-
vals. For example, only Problem 3 is close to the acceptable confi-
dence interval range, and it shows the smallest standard deviation
relative to the mean. Problem 4 shows the largest variation between
the eight interpreters and has the widest confidence intervals (i.e.,
least confidence). Note that the confidence intervals were computed
based on only one of the sets of estimates of permeability and skin.
The actual means and standard deviations of the answers were not
discovered until later, when the seven other interpretations were col-
lected for the paper.3
9
The examples shown here were chosen to illustrate the necessity
of looking at the confidence intervals for any nonlinear regression
match. Perhaps 95% of all real well tests are not as pathological as
these examples. Nonetheless, it is important for the well-test inter-
preter to be able to distinguish between the 95% and 5% problems. It
is also important to acknowledge that 5% of well tests do not permit
a valid interpretation and to be honest about a lack of a result in a
summary report.
Other methods are available for evaluation of an interpreta-
tion. The confidence intervals are strongly governed by the correla-
tion matrix (which is a normalized form of the Hessian), so an alter-
native evaluation procedure is to examine the correlation matrix
directly.28 For example, Table 3 shows the correlation matrix repre-
senting the problem illustrated in Figs. 7 through 9; the strong nega-
tive correlation between permeability and skin is clear. As another
alternative, Watson et al.
40
illustrated a statistical method (F test) as
an aid in deciding whether a given model is sufficiently comprehen-
sive to describe the well-test response adequately. This procedure
works by comparing models of increasing complexity. Although
this approach can be used to discriminate between models in the
k
S
C
TABLE 3-CORRELATION MATRIX FOR THE MATCH
SHOWN IN FIGS. 8 AND 9
k
1.0

0.2351
s

1.0

c
0.2351

1.0
July 1994 .JPI'
same way as confidence intervals, it is applicable only to compari-
sons of models that are subsets or supersets of each other.
In Practice
So, given all the different methods and procedures, what does com-
puter-aided well-test interpretation mean to the engineer in the field
office? The combined advantages of deconvolution, improved
model recognition using the pressure derivative or Laplace pres-
sure, nonlinear regression, and confidence intervals can be summa-
rized as follows.
1. Variable-rate tests can be analyzed. Thus, more complete in-
formation from the reservoir is included, and an interpretation can
be achieved with a shorter test.
2. More complex models can be used, providing a means to ana-
lyze tests in layered reservoirs, composite reservoirs, multi phase
flow, horizontal wells, and naturally fractured formations. In the fu-
ture, the degree of complexity may even be expanded to include res-
ervoir description.
3. By matching data within transitions, a computer-aided analysis
can recover an answer that contains insufficient data within tradi-
tional flow regions to allow a conventional analysis. As an example,
Fig. 13 shows a Horner plot with the Horner straight line drawn in
the correct position. The position of this line would be hard to deter-
mine by eye or by experience but can be found without difficulty by
nonlinear regression. Ramey9 discussed other examples in which
the true Horner straight line was found by nonlinear regression to lie
in places not evident by eye. Computer-aided interpretation has al-
lowed us to discover that Horner analysis often underesti-
mates permeability and skin.
4. By illuminating inadequacies in the data or appropriateness of
the reservoir model, confidence intervals permit us to determine
quantitatively how good the interpretation is. This allows us to re-
ject improper answers and to recognize good ones. Instead of sim-
ply processing data and collecting results into reports, the quantita-
tive judgment allows us to differentiate between adequate and
inadequate interpretations and shows us how our well tests could be
run better.
Nomenclature
CD= storage coefficient
E= objective function
H= Hessian matrix
i= indices
k = permeability, L2
.t - 1= inverse Laplace transform
m= number of unknown parameters
n= number of data
P= pressure, mlLt
2
PD= dimensionless pressure, mlLt
2
PDO= constant-rate dimensionless pressure, mlLt
2
q= flow rate, L3
(jJ)= dimensionless flow rate, L3
qr= reference flow rate, L3
re = reservoir radius, L
s= Laplace variable
s= skin
t= time, t
tD= dimensionless time
(1= unknown parameter
"t= integration variable
0),1.. = dual porosity parameters
Acknowledgments
The work summarized here represents considerable effort on the
part of many people in places throughout the industry. I especially
acknowledge the Stanford U. students who have carried the baton
through research studies that were many in number and wide in
JPI'. July 1994
scope; by no means do they all appear in the References. Special
recognition goes to Adalberto Rosa, who in 1983 laid the ground-
work for much that followed. The collective work of this dedicated
group has been funded first by Schlumberger and subsequently by
the members of the SUPRI-D Research Consortium for Innovation
in Well Test Analysis.
References
1. Earlougher, R.C. and Kersch, M.K.: "Field Examples of Automatic
Transient Test Analysis," JPT (Oct. 1972) 1271.
2. Dogru, A.H., Dixon, T.N., and Edgar, T.F.: "Confidence Limits on the
Parameters and Predictions of Slightly Compressible, Single Phase Res-
ervoirs," SPEJ (Feb. 1977) 42; Trans., AIME, 263.
3. McEdwards, D.G.: "Multi well Variable-Rate Well Test Analysis," SPEJ
(Aug. 1981) 444.
4. Guillot, A.Y. and Horne, R.N.: "Using Simultaneous Downhole Flow-
Rate and Pressure Measurements To Improve Analysis of Well Tests,"
SPEFE (June 1986) 216.
5. Bourdet, D. et al.: "A New Set of Type Curves Simplifies Well Test
Analysis," World Oil (May 1983) 95.
6. Bourdet, D., Ayoub, J.A, and Pirard, Y-M.: "Use of the Pressure Deriv-
ative in Well Test Interpretation," SPEFE (June 1989) 293; Trans.,
AIME,287.
7. Allain, O.F. and Horne, R.N.: "Use of Artificial Intelligence in Well-
Test Analysis," JPT(March 1990) 342.
8. Rosa, AJ. and Horne, R.N.: "Automated Type Curve Matching in Well
Test Analysis Using Laplace Space Determination of Parameter Gradi-
ents," paper SPE 12131 presented at the 1983 SPE Annual Technical
Conference and Exhibition, San Francisco, Oct. 5-8.
9. Ramey, HJ. Jr.: "Advances in Practical Well Test Analysis," JPT(June
1992) 650.
10. Kuchuk, FJ., Carter, R.G., and Ayestaran, L.: "Deconvolution of Well-
bore Pressure and Flow Rate," SPEFE (March 1990) 53.
11. van Everdingen, A.F. and Hurst, W.: "The Application of the Laplace
Transformation to Flow Problems in Reservoirs," Trans., AIME (1949)
186,305.
12. Stehfest, H: "Numerical Inversion of Laplace Transforms," Commu-
nications o/the ACM (Jan. 1970) 13, No.1, 47.
13. Kuchuk, FJ.: "Applications of Convolution and Deconvolution to
Transient Well Tests," SPEFE (Dec. 1990),375; Trans., AIME, 289.
14. Bourgeois, M.J. and Horne, R.N .: "Well-Test Model Recognition Using
Laplace Space," SPEFE (March 1993) 17; Trans., AIME, 295.
15. Manrique, J.: "Algorithms for Smoothing Noisy Well Test Data and the
Generation of Continuous Pressure Derivatives," U. of Tulsa, Tul-
sa (1991).
16. Romboutsos, A. and Stewart, G.: "A Direct Deconvolution or Convolu-
tion Algorithm for Well Test Analysis," paper SPE 18157 presented at
the 1988 SPE Annual Technical Conference and Exhibition, Houston,
Oct. 2-5.
17. Stewart, G. and Du, K.F.: "Feature Extraction for Well-Test Interpreta-
tion Model Selection by an Artificial-Intelligence Approach," paper
19820 presented at the 1989 SPE Annual Technical Conference and Ex-
hibition, San Antonio, Oct. 8-11.
18. Lane, H.S., Lee, W.J., and Watson, AT.: "An Algorithm for Determin-
ing Smooth, Continuous Pressure Derivatives From Well Test Data,"
SPEFE (Dec. 1991) 493.
19. Allain, O.F. and Houze, O.P.: "A Practical Artificial Intelligence Ap-
plication in Well Test Interpretation," paper SPE 24287 presented at the
1992 SPE European Petroleum Computer Conference, Stavanger, Nor-
way, May 25-27.
20. AI-Kaabi, A.U., McVay, D.A, and Lee, w.J.: "Using an Expert System
To Identify a Well-Test Interpretation Model," JPT (May 1990) 654.
21. AI-Kaabi, A.U. and Lee, W.J.: "Using Artificial Neural Networks To
Identify the Well-Test Interpretation Model," SPEFE (Sept. 1993);
Trans., AIME, 295.
22. Onur, M., Peres, A.M.M., and Reynolds, AC.: "New Pressure Func-
tions for Well Test Analysis," paper SPE 19819 presented at the 1989
SPE Annual Technical Conference and Exhibition, San Antonio, Oct.
8-11.
23. Blasingame, T.A, Johnston, J.L., and Lee, W.J.: "Type-Curve Analysis
Using the Pressure Integral Method," paper SPE 18799 presented at the
1989 SPE California Regional Meeting, Bakersfield, April 5-7.
24. Padmanabhan, L.: "WELLT.EST-A Program for Computer-Aided
Analysis of Pressure Transient Data From Well Tests," paper SPE 8391
605
1000
(t+deltat)/deltat
Fig. 13-An evasive Horner line, Example 4.2(a) from Ref.
38
presented at the 1979 SPE Annual Technical Conference and Exhibi-
tion, Las Vegas, Sept. 23-26.
25. Padmanabhan, L. and Woo, P.T.: "A New Approach to Parameter Es-
timation in Well Testing," paper SPE 5741 presented at the 1976 SPE
Symposium on Reservoir Simulation, Los Angeles, Feb. 19-20.
26. Chang, J. and Ershaghi, I.: "An Improved Microcomputer Approach to
Well Test Interpretation," paper SPE 15928 presented at the 1986 SPE
Eastern Regional Meeting, Columbus, Nov. 12-14.
27. Bard, Y.: Nonlinear Parameter Estimation, Academic Press Inc. Ltd.,
New York City (1974).
28. Abbaszadeh, M. and Kamal, M.M.: "Automatic Type-Curve Matching
for Well Test Analysis," SPEFE (Sept. 1988) 567.
29. Barna, J. et al.: "Improved Estimation Algorithms for Automated Type-
Curve Analysis of Well Tests," SPEFE (March 1988) 186; Trans.,
AIME,285.
30. Nanba, T. and Horne, R.N.: "An Improved Regression Algorithm for
Automated Well-Test Analysis," SPEFE (March 1992) 61.
31. Gill, P.E., Murray, W., and Wright, M.H.: Practical Optimization, Aca-
demic Press, New York City (1983).
32. Law, V.J. and Farriss, R.H.: ''Transformational Discrimination for Un-
constrained Optimization," Ind. & Eng. Chern. Fund. (1972) 11, No.2,
154.
33. Spivey, J.P.: "A New Algorithm for Hyperbolic Decline Curve Fit-
ting," paper SPE 15293 presented at the 1986 SPE Symposium on Pe-
troleum Industry Applications of Microcomputers, Silver Creek, June
18-20.
34. Rosa, A.J. and Horne, R.N.: "Reservoir Description by Well Test Analy-
sis Using Cyclic Flow Rate Variations," SPE 22698 presented at the
1991 SPE Annual Technical Conference and Exhibition, Dallas, Oct.
6-9.
35. Carroll, J.M. and Horne, R.N.: "Multivariate Production Systems Opti-
mization," JPT(July 1992) 782.
36. Chen, W.H. et al.: "A New Algorithm for Automatic History Match-
ing," SPEJ (Dec. 1974),593; Trans., AIME, 257.
37. Rosa, AJ. and Horne, R.N.: "Automated Well Test Analysis Using Ro-
bust Nonlinear Parameter Estimation," paper SPE 22679 presented at
606
the 1991 SPE Annual Technical Conference and Exhibition, Dallas,
Oct. 6-9.
38. Horne, R.N.: Modem Well Test Analysis, Petroway Inc., Palo Alto,
CA(l990).
39. Baldwin, J.O. and Norris, C.: "Software Showcase: Pressure Transient
Analysis Software," paper SPE 24461 presented at the 1992 SPE Petro-
leum Computer Conference, Houston, July 20-22.
40. Watson, A.T., Gatens, J.M. III, and Lane, H.S.: "Model SeleCtion for
Well Test and Production Data Analysis," SPEFE (March 1988) 215.
81 Metric Conversion Factors
bbl X 1.589873 E-Ol = m
3
psi X 6.894757 E+OO= kPa
Roland N. Horne is associate chairman of the Stanford U. Petro-
leum Engineering Dept. in Stanford, CA. He joined the faculty in
1981. His main areas of interest are well testing, use of artificial
intelligence in solving reservoir engineering problems, and geo-
thermal reservoirs. A member of the Books Committee, Horne
has served as a member of the Editorial Review Committee, as
Stanford U. Student Chapter faculty sponsor, and as chairman
of the Pressure-Transient Testing Technical Committee for the
1989 Annual Technical Conference and Exhibition.
July 1994 JPl'