The Well Factory Approach to Developing Unconventionals: A Case Study from the Permian Basin Wolfcamp Play

Abstract

Abstract In order for operators to grow production and maintain profit margins in unconventional resource plays, a ‘Well Factory’ or ‘Manufacturing’ style of development is often employed. These types of plays are commonly termed ‘statistical’ and the popular school of thought is to drill and complete hundreds (or thousands) of wells in the same manner and design. Such a strategy, likened to the assembly line model that made the car manufacturing industry so successful, requires making some general assumptions regarding subsurface and surface homogeneity across the field. There are both merits and potential drawbacks to employing an overly strict well factory approach to development with standardized designs. A manufacturing style typically results in faster execution speeds and improved efficiency, meaning more wells on production over a shorter period of time at a lower cost. This approach also lends itself to taking advantage of economies of scale, by applying standard designs across multiple rig lines over a large geographical area. However there are drawbacks to this approach if not implemented appropriately, including slower adoption of industry best practices, suppressed innovation, and increased likelihood of value erosion due to lower well recoveries as a result of suboptimal or incomplete subsurface characterization. This paper will analyse differing well factory approaches to unconventional assets, using examples from the Wolfcamp Unconventional Oil Play in the Permian Basin. The Wolfcamp play is one of most active and mature unconventional oil plays in the world, with over 200 industry rigs currently developing the resource base, and more than 12,000 industry wells already drilled. An emphasis is placed on utilizing a factory model that enables flexibility for project execution teams to optimize, while maintaining the efficiency and execution speeds that a classical factory model provides. Ultimately it is imperative that operators can adapt to the ever-evolving nature of these plays, as technology, research, and well performance data matures. It is also important that operators can trial new ideas and concepts with a ‘learn fast-fail fast’ culture that does not interrupt the factory performance. This paper will present a framework for a well factory process to most optimally develop an unconventional resource play, with the caveat that all fields and plays are different and a ‘one size fits all’ approach rarely applies in any oil field application, let alone an unconventional play.