Multi-target wells: a new concept to improve well economics OMV AG, Vienna, Austria ABSTRACT: The Vienna Basin is a sedimentary basin more than 10 km in thickness and composed of more than a dozen hydrocarbon layers. Since the area has been intensively explored in the past 50 years, future exploration can expect to find only small reservoirs or compartments of already existing reservoirs. However, the existing infrastructure, such as pipelines, facilities and a nearby refinery, would make even small finds attractive. In this light it is of vital importance to reduce risk and costs in hydrocarbon exploration and production. Multi-target wells were found to be an adequate answer to these problems: the chance of discovery increases more or less directly with the number of targets included in the well trajectory; and several small reservoirs can, in total, provide positive well economics. Moreover, by including exploration, appraisal and production targets into one well path a substantial contribution to improve economic hydrocarbon recovery from existing fields can be made. To further reduce drilling costs a new casing philosophy was established. By skipping the intermediate casing across the build-up section substantial savings could be made. To plan and execute these challenging projects efficiently a multidisciplinary team has to be set up at an early stage of the drilling project. In this way the number of targets, the actual well path and well construction with respect to production requirements can be optimized. An example of a recently drilled multi-target horizontal well, including one primary and five secondary targets, is given. By applying this new concept drilling costs could be reduced by more than 30%. KEYWORDS: directional well, marginal field, casing setting, drilling cost INTRODUCTION The Vienna Basin is situated to the northeast of Vienna, at the transition from the Alpine to the Carpathian domain. About two-thirds of the basin is on Austrian territory, whereas the remaining part is located in Slovakia. It is a sedimentary basin more than 10 km thick, composed of more than a dozen hydrocarbon layers. First discoveries were made at the beginning of the twentieth century in the Slovakian part of the basin, while commercial oil production in Austria started in the early 1930s. From then onwards, the area has been intensively explored. More than 3000 wells have been drilled and about 40 oil and gas fields discovered. These range from one well fields to giants like the Matzen Field, with initial reserves in excess of 500 10 6 BBL oil (83 10 6 tonnes). Cumulative production in the Austrian part of the basin has reached about 600 10 6 BBL oil (100 10 6 tonnes) and 1.9 10 12 SCF gas (53 10 9 Sm 3 ). Thus, the area can be called a mature hydrocarbon province. In the past the exploration and production activities were generally governed by a top-down strategy, such that the basin was explored from the shallow part down to greater depth. This resulted in the deepest exploration well, Zistersdorf ÜT 2, at 8553 m, drilled in the mid-1980s. Disappointingly a source potential was proven, but reservoirs were not encountered. Consequently, because of the decrease in oil price at this time Presented at the 10th EAGE European Symposium on IOR, Brighton, August 1999. Petroleum Geoscience, Vol. 8 2002, pp. 31 35 and the extremely high drilling costs, further deep exploration projects were cancelled and the whole basin was believed to have very limited oil and gas potential. THE CHALLENGE The challenge was to develop a new exploration strategy and to optimize economic hydrocarbon recovery from existing fields. The new concept comprised of 3D seismic, sequence stratigraphy and a new approach to the basinws structural evolution. Integrated geological, geophysical and engineering characterization of the major reservoirs would provide a better understanding of the depositional framework of the upper part of the basin. A new more complex model was established. It was hoped that this new approach to the old basin would enable an economic revival of OMVws exploration and production activities. However, even with the help of the latest technology we expected to find only small reservoirs or compartments of already existing reservoirs. Thus, it was of vital importance to reduce risk and costs in the hydrocarbon exploration and production. THE MULTI-TARGET CONCEPT The economics of a well can be simplified by the following relationship: e = f (risk, costs, reservoir) 1354-0793/02/$15.00 2002 EAGE/Geological Society of London
32 Fig. 1. Structure map indicating NPV profile. Fig. 2. Targets and well trajectories. Since the reservoir parameters are given, well economics can be improved by reducing the geological risk and the well costs. The geological risk can be reduced by incorporating more targets such as gas and oil, as well as exploration, appraisal and production targets into the well path. As outlined above, the Vienna Basin, with several hydrocarbon-bearing layers on top of each other, is an excellent area for this approach. REDUCING DRILLING COSTS Besides the geological investigation, the actual drilling process plays an important role in exploration costs. This is why reduced overall drilling costs can substantially cut finding and production costs. More in-detail, location preparation, the drilling of the hole itself, as well as logging, casing and well completion, display a substantial cost-saving potential. With respect to drilling, special emphasis should be given to optimize penetration rate (ROP). However, it should be borne in mind that pushing the ROP might result in additional reaming operations and consequently create problems in cementing, zonal isolation etc. Selection of a proper drilling rig or, conversely, downsizing the drilling project with respect to diameter and depth, can also cut drilling costs substantially. The goal is to optimize well construction with respect to exploratory risk and well costs. In this context the engineering challenges are as follows: optimize well path; define required casing and completion programme; optimize drilling and directional drilling operations; design drilling mud to maintain wellbore stability and minimize formation damage. THE MULTI-DISCIPLINARY TEAM APPROACH Usually, after the definition of the geological target and the approval of the intent to drill respectively, a drilling engineer
Improving economics with multi-target wells 33 starts to elaborate on the drilling programme. In this case, it is obvious that all the activities outlined above, cannot be covered sufficiently by a single person. Thus, an integrated project team consisting of geologists, geophysicists, reservoir engineers, economists, drilling and production engineers, as well as representatives of the service industry, has to be set up from the very beginning. Only within the team can the well path be optimized with respect to drilling location, number of targets to be included, desired inclination across the reservoir section, directional drilling capability and rig capacity. In a highly populated area like the Vienna Basin, the drilling location has to be selected carefully in order to minimize the environmental impact. Designing the well trajectory might be as important as the target itself. More targets will improve project economics, however, it will probably be impossible to incorporate all targets within the well path. Thus, the project team has to evaluate the different targets with respect to economic value and directional drilling capability and costs. Smaller drilling rigs are usually available at lower rates and are preferably used for cheap wells. But hook load capacity and maximum torque may limit the well path. In some cases it might be beneficial to incorporate a production target within an exploration well. If the primary target is not an economic find, the well can serve to improve the hydrocarbon recovery from an existing field. If the primary target comes in, the production target could be produced later on. The major advantage of directional wells is the larger exposure to the reservoir compared to a vertical well. This will not only provide improved oil recovery but also improve overall well economics due to higher production rates. In this case optimum well direction and inclination will also be of significance. A reservoir simulation can identify the optimum well path within the reservoir. Depending on the shape of the reservoir, the direction of the horizontal well is determined so that the extension in the reservoir section is maximized. In this case the direction of the well is chosen perpendicular to the dipping of the formation. In order to prevent early water production the vertical position of the well is placed in a position that is 60% of the distance from the oil water contact to the gas oil contact. With these well data a production profile and NPV respectively are calculated by a reservoir simulator. Consequently the well is shifted horizontally and vertically in the reservoir and corresponding production rates and profiles are calculated. As a result of these simulation runs a NPV profile can be generated and the optimum well trajectory can be identified. In the next stage the team has to optimize the casing, cementing and completion programme with respect to production requirements, in particular the number of casing strings and required diameter. Resulting drag and torque loads have to reconcile with drilling rig capacity. Costs and risk of the operation have to be taken into account as well. From the cost viewpoint, minimizing the number of casing strings is the most efficient way of cutting drilling, as well as logging, costs. On the other hand long open hole sections require an excellent drilling fluid to minimize formation damage and provide wellbore stability. Mud properties, especially fluid loss, have to be adjusted properly and mud losses have to be taken into account. In shallow wells, with a long open hole section, they can result in hole collapse and in the total loss of the well. It should also be borne in mind that borehole stability can be a function of time. EXAMPLE: OLLERSDORF WEST 2 The discovery well was drilled in 1997 and proved the presence of oil. The reservoir encountered was relatively small. To minimize development costs the plan was to drill one horizontal well which should both prove the extent of the reservoir and serve as a producer. Nevertheless, well economics were pretty poor and the project was not approved. An alternative scheme to produce the oil found was developed and a total of five other targets (oil and gas) were incorporated. The different targets were laterally shifted but, fortunately, in nearly the same direction. From the outset it was obvious that it would be difficult to match all requirements within one well path. Obviously the primary target will contribute most to the economic value of the well. This is why the well trajectory across the primary target was determined first and was used as the basis for further optimization of the well path. The reservoir simulation indicated that maximum production and NPV respectively could be expected from a well penetrating the primary target with an inclination of about 80 (Fig. 1). Based upon this, several different well trajectories penetrating the targets, or part of the targets, were identified (Fig. 2). The cheapest location, close to an existing road, was found some 80 m to the northwest of target one. To simplify the optimization process it was assumed that, when penetrating the top targets in a more down-dip position, the volume contained in the structure above the penetration point would not contribute to the production. The EMV was calculated accordingly. As outlined in Figure 3, penetrating the first layer not in the top position did not result in significant production loss since the structure was quite flat. Not penetrating the other target areas caused a reduction in EMV of 25 to 50%. From the directional drilling viewpoint, simple trajectories are easier and faster to drill. A complex well architecture will not only increase expected drilling costs because of additional rig time and special equipment required but also because of the technical risk involved. The technical risk has to be estimated according to the field experience. These costs might be substantial (Fig. 3) and finally drive the decision as to which option to favour. Moreover excessive build rates, a counter-curve, as well as changes in azimuth, will result in increased torque and drag, limiting the maximum well depth with respect to the rig capacity available or call for a bigger, more expensive, drilling rig. However, it should be noted that in the case of Ollersdorf West 2, casing not drilling was the limiting factor. Due to the shallowness of the reservoir, the force resulting from the weight of the casing was not enough to push the casing into the horizontal section. The low budget of the project did not justify the application of special techniques, such as casing flotation, casing rotation etc., and it is OMVws general philosophy to live with standard equipment in order to minimize costs for warehousing and logistics. Finally, it was decided to pass the top three targets by about 80 m as a consequence of the cheaper drilling location (Fig. 4). The kick-off point was selected as deep as possible. Medium build rates (6.6/30 m), which had already been drilled in the area, were used to build up the desired inclination of 80 and to penetrate the bottom three targets in a favourable position. To gain geological information the well path was dropped after the final target. In the next step the casing and cementing programme was optimized with respect to production requirements, drag and torque considerations, rig capacity, costs and risk (Fig. 5). In the past, similar wells were drilled using an intermediate casing string to case off the build-up section. Due to the limited rig
34 Fig. 3. Economic evaluation of the different trajectories (rounded figures). Fig. 4. Optimized well path. Fig. 5. Casing programme.
Improving economics with multi-target wells 35 Fig. 6. Cost vs. depth diagram. capacity only a 7 in. intermediate casing and a 4½ in. production liner could be run. This restriction in diameter limited the possibility of proper sand control, adequate zonal isolation and selective treatment of different layers, etc. Moreover, substantial costs arose from the additional LWD run in the 6! in. hole. This is why the idea was born, to skip one string and drill the well to total depth with a 8½ in. bit. Borehole stability, more specifically the relatively long open hole section with respect to the shallowness of the well and the need to have the entire build-up section open, were the major concerns. This is why a risk assessment based upon field experience was performed to justify the new casing philosophy. Finally, due to the limited hook load capacity of the drilling rig a tapered production string had to be run. As outlined, hole stability was a major concern. In this light and of course from the economic point of view, rig time was an important factor. The formations drilled are a sequence of shale and sandstone. From our experience shale stability up to 10 days was no problem. This is why the intention was to drill the 8½ in. hole as fast as possible. Thus, starting from the kick-off point the well was drilled to total depth in one run, with one bit, one bottom hole assembly and one logging run. The well was drilled within 16 days, without any problems, except, that the bottom targets did not come in. Consequently only the upper part of the hole was cased. However, here the new casing philosophy proved to be most economical due to the savings on the intermediate casing as well as on the additional bit and the logging run in the 6! in. hole. In this case substantial savings of more than 30% could be achieved (Fig. 6). CONCLUSIONS Multi-target wells can substantially improve well economics. To optimize well construction an integrated project team has been set up from the outset. The drilling process itself (bit, bottom hole assembly, directional drilling, etc.) has to be optimized for every single project. No standard planning formulation should be applied as every well is unique. A new casing philosophy in horizontal well drilling no casing across the curve has been successfully proven. REFERENCES Allen, F. et al. 1997. Extended-Reach Drilling: Breaking the 10-km Barrier. Schlumberger Oilfield Review, Winter. Aston, M.S. & McGhee, G. 1998. Techniques for Solving Torque and Drag Problems in Todayws Drilling Environment. Paper SPE 48939. Brix, F. & Schultz, O. 1993. Erdöl und &Erdgas in Österreich (second edition). Hamilton, W. & Sperl, H. 1998. Exploring a Mature Basin The Vienna Basin, Austria. Paper presented at the PAPG/PPEPCA conference, Bhurban. Mason, C.J. & Judzis, A. 1998. Extended Reach Drilling What is the Limit?. Paper SPE 48943. Veit, Ch. 1999. Matzen Project. Paper presented at the ÖGEW meeting, Vienna. Received 2 January 2001; revised typescript accepted 30 November 2001