An Economic Approach to Horizontal Well Length Optimization

Abstract

Abstract Horizontal wells offer higher productivity when compared to vertical wells due to increased contact area with the reservoir. It is now accepted that an increase in well length is not proportional to higher productivity after a certain critical well length because of frictional pressure losses in the wellbore. As the well length increases, so does the frictional pressure loss. In most cases there is an optimal well length beyond which a productivity decline will occur. The purpose of this study is to present findings on horizontal well optimization taking into consideration frictional pressure loss effects with and without perforations in the wellbore. Several horizontal well productivity equations can be found in the literature. In this study a productivity equation based on an elliptical drainage area is assumed. Other assumptions include single-phase incompressible oil, isothermal condition, and homogeneous reservoir with directional change in permeability. Parametric studies were conducted to investigate the effects of pressure drawdown, wellbore diameter, horizontal permeability, formation anisotropy, and oil viscosity on well performance. A probabilistic economic approach based on net present value (NPV) is used to determine the optimal well length for a particular set of reservoir and well parameters that will be useful for planning and designing horizontal wells. Results show the following: Horizontal well productivity is significantly affected by oil viscosity, horizontal permeability, and well diameter. Those parameters must be considered for the optimization of horizontal well length.Frictional pressure losses have a significant effect on the productivity of small diameter wellbores in high permeability formations containing relatively low viscous oil.Sensitivity analysis of economic parameters indicates that oil price had the greatest effect on NPV at a particular well length. Production taxes and operating costs ranked second and third, respectively, with negative effects on NPV.