Goal of the analysis:
To determine the technical viability, economic feasibility, and potential production benefits of drilling multilateral and horizontal wells, ensuring optimal reservoir contact and recovery.
Data required:
- Geological and reservoir data (e.g., permeability, thickness, fluid properties)
- Well logs and petrophysical analyses
- Existing vertical or horizontal well performance metrics
- Drilling cost estimates and rig availability
- Advanced well construction technologies and directional drilling capabilities
- Reservoir modeling or simulation outcomes
Detailed step-by-step instruction on how to conduct the analysis:
1. Review reservoir characteristics: Determine the lithology, reservoir thickness, and heterogeneities to assess the potential benefits of increased lateral contact.
2. Evaluate drilling technology requirements: Identify directional drilling tools, multilateral junction systems, and wellbore stability needs to ensure technical feasibility.
3. Analyze historical well performance: Examine offset data from similar horizontal or multilateral wells (if available) to gauge expected production gains.
4. Estimate cost and economics: Compile drilling and completion cost estimates, then compare against production forecasts to calculate metrics like Net Present Value (NPV) and Internal Rate of Return (IRR).
5. Perform risk assessment: Consider drilling complications (e.g., wellbore instability), NPT risks, and incremental capital required for advanced well designs.
6. Develop a feasibility score: Create a matrix or scoring system that factors in reservoir quality, drilling complexity, cost, and likely production improvement.
7. Validate with simulation models: Incorporate multilateral or horizontal well scenarios into reservoir simulations to predict incremental recovery and economic outcomes.
Format of the output of analysis:
- A feasibility report with key metrics (NPV, IRR, payback period) for proposed well types
- Comparative tables showing lateral length, number of laterals, and expected production vs. vertical well scenarios
- Risk register highlighting drilling and completion challenges
- Summary of recommended well design and completion strategies
How to interpret results:
- Favorable economics (e.g., short payback period, high IRR) suggest that multilateral or horizontal wells may significantly increase recovery and value.
- Poor or marginal outcomes may indicate reservoir heterogeneities, excessive drilling complexity, or high costs that could undermine feasibility.
- A balanced view of technical risk and financial returns ensures capital is allocated to projects with the highest overall benefit.
Steps a company can take to improve on this measure:
1. Refine geological and geomechanical models to reduce uncertainty around wellbore stability and optimal lateral placement.
2. Leverage real-time drilling data to adjust well path and optimize well construction parameters as drilling progresses.
3. Adopt new drilling technologies (e.g., rotary steerable systems, advanced mud motors) for precise wellbore placement and minimized drilling risk.
4. Collaborate with service providers to design fit-for-purpose multilateral junctions and completion hardware.
5. Implement effective lessons-learned programs to continuously improve design and execution strategies for multilateral and horizontal wells.