Dick Barden GRM Corporation

1. EVALUATING REFRAC WELLS
USING RESERVOIR SIMULATION
Dick Barden
Graphical Reservoir Modeling Corp.

2. KEY TOPICS
 Identifying suitable wells for refracture
and developing well selection criteria
 Making an economic assessment for re-
fracturing low-producing wells
 How to reduce costs and risks for
refracturing projects
 Operational case studies and post-
refracturing diagnostics & evaluation

3. TYPCIAL SITUATIONS
Wells will generally become “under producers” for
three basic reasons:
 The well is mature
(normal expected declines in production)
 The completion has degraded
(yielding more rapid-than-expected declines)
 There are external forces in the reservoir
(water encroachment, pressure interference from offset
wells, etc.)

4. ASSESSING REFRAC CANDIDATES
Use a simulator to model the well in question
following these standard procedures:
 Establish a history match
 Run a long-term “baseline” forecast
 Under a new scenario, modify the completion, re-
run the long-term EUR forecast and then compare
the results to the “baseline” case
 Repeat the previous step as often as desired to
test different re-frac designs

5. HISTORY MATCHING
The targeted completion parameters yielded an
unsatisfactory history match.

6. HISTORY MATCHING
The completion was modified to improve the match

7. HISTORY MATCHING
A good history match is obtained with the revised
completion (frac half-lengths & conductivity reduced)

8. HISTORY MATCHING
Use the existing completion to run an EUR fore-cast;
use as a baseline for future comparisons

9. SET UP COMPLETION SCENARIOS
Create alternate scenarios with different re-frac
parameters and run identical long-term production
forecasts for each one

10. EVALUATE THE RESULTS
Compare the economic impact of the refrac costs vs.
the net forecast gains for all scenarios

11. DEVELOP SELECTION
CRITERIA
The process of assessing multiple wells for
potential re-frac stimulation and document-ing
their progress to determine the level of success
achieved enables the operator to create a data
base that allows him/her to see certain
commonalities among wells that were found to
be good candidates as opposed to those that did
not respond as positively.

12. REDUCING THE RISK
Reservoir simulation provides a unique diagnostic and analytical
capability. By applying this additional level of science to the
problem of selecting the right wells for re-completion, significant
benefits can be achieved.
More Science = More Knowledge
More Knowledge = Less Uncertainty
Less Uncertainty = Lower Risk
Lower Risk = Higher Percentage of Better Wells
= A BETTER BOTTOM LINE

13. COST REDUCTION
STRATEGIES
 Optimizing frac design and/or frac spacing can lower overall
completion costs and improve well production
 Identifying well drainage areas in particular time frames can help
operators devise a more efficient and economic field development
plan
 Optimizing well spacing can reduce well-to-well pressure
competition and avoid the drilling of unnecessary wells
Drilling costs can be reduced in several ways:

14. CASE 1: REFRAC EVALUATION
This well was designed with 46 fracs, each with an effective half-
length of about 385’ to 400’. However, a history match could not be
obtained using those completion parameters.

15. CASE 1: REFRAC EVALUATION
A good history match was obtained by reducing the frac half-
lengths to 265’, confirming that the initial completion did not turn
out as well as originally designed.

16. CASE 1: REFRAC EVALUATION
If all the fracs had been
completed as originally
designed, the well
could be expected to
produce about 17.8 Bcf
over a 20 year period,
based on the EUR
generated by the
model.

17. CASE 1: REFRAC EVALUATION
However, using the frac
parameters that yielded a
good history match, that
same 20 year EUR
forecast drops over 14%
to 15.2 BCF. At current
gas prices, that equates to
roughly $7.5 million in lost
revenue. Also, the
drainage area calcu-lated
by the model is 37 acres
less than the ideal well
after 20 years.

18. CASE 1: REFRAC EVALUATION
QUESTION: If the well was refrac’d to the
specifications of the original design (i.e.
with contributing frac half-lengths of 385’),
how much of the lost revenue might the
well make up over the next 20 years?

19. CASE 1: REFRAC EVALUATION
The forecast shows that, all other things being equal,
the refrac’d well would produce about 17.6 BCF,
making up 92.3% of the otherwise lost production.
By comparing the value of this increased production
(i.e. ≈ $6.48 million) against the cost of refracing the
well and the various risks involved, the economic
viability of doing the re-frac can be easily determined
using the company’s internal economic criteria.

20. CASE 2: 8 WELL GROUP
This study involves 8 wells, some of which have been producing
for over 5 decades. The well we’re concerned with has been
producing for 25 years.

21. CASE 2: 8 WELL GROUP
First, a good history match was obtained for all of the producing
wells.

22. CASE 2: 8 WELL GROUP
The history match for this well shows a sudden change, which
indicates either a significant pressure interference effect or a
completion problem of some kind.

23. CASE 2: 8 WELL GROUP
To obtain a history match, the completion had to be degraded
gradually over the first 12 years, then abruptly in 2003.
Assuming no further skin damage occurs, the 20 year EUR for this well
is forecast to be 205,522 bbl.

24. CASE 2: 8 WELL GROUP
If the well degraded, but still retained a slightly nega-tive
skin, the decline curve would look more like this:

25. CASE 2: 8 WELL GROUP
Assuming the well could be reworked and the original completion
restored shortly after the history match period, the 20 year EUR
increases by 68% to 346 Mbo; an approximate $9.3 million gain.

26. CASE 2: 8 WELL GROUP
Shown below are the resulting volumetric table and pressure map
for the re-completed well scenario.

27. CASE 2: Final Outcome
About 8 months after this study was per-formed,
this well was re-completed and production
jumped from, about 4 bbl/day to over 50 bbl/day.
Since then, it has been declining substantially as
predicted by the model for over two years.

28. CASE 3: SINGLE WELL
The sudden drop in production at 90 days was history matched
by reducing the fracture half-length from 180’ to 120’ and
fracture conductivity from 80 Md-ft to 10 Md-ft.

29. CASE 3: SINGLE WELL
Using the completion parameters established by the history
match, the 20 year production forecast was just under
81,000 bbl.

30. CASE 3: SINGLE WELL
With the well refrac’d and the original completion parameters re-stored,
the 20 year EUR forecast improves by 21% to 98 Mbo, but the gains may
be largely offset by the cost of re-fracing the well.

31. CASE 4: GAS WELL
In this study, the
well production
suddenly dropped
after 2 years of
normal decline (see
yellow circle). With
no other wells in the
area, the completion
had to be de-graded
to obtain the good
history match shown
at right.

32. CASE 4: LATERAL GAS WELL
With the completion degraded to about half the original
frac half-length and conductivity, the long term EUR was
calculated to be only 1.1 Bcf.

33. CASE 4: LATERAL GAS WELL
If successfully refrac’d, the EUR could increase by 51% to about 1.66 Bcf; a
dollar value of about $1.51 million at current prices. This must be offset by the
recompletion costs in the risk/reward analysis.

34. CASE 5: WELL SPACING
In this study, a good history match was obtained for the
existing unconventional well and a 20 year production
forecast was run to determine what that well would
produce on its own, i.e. without any other wells in the
immediate area. Then, new scenarios were created with
offsetting wells at different distances from the initial well
in order to test various spacing sensitivities. The results
of four of these sensitivity scenarios are shown on the
following slides. As you can see, it then be-comes a
simple matter to decide which option is likely to deliver
the best results.

35. CASE 5: WELL SPACING
Horizontal well spacing options

36. CASE 5: WELL SPACING
Compare results of the different spacing options

37. SIMULATION ANALYSIS
 Predict the economic viability of different types
of completions:
 Vertical Frac’d - vary half-length, conductivity,
direction
 Horizontal - open hole or frac’d; vary the
frac spacing, length & conductivity
 Based on frac design, optimize well spacing to
minimize well-to-well interference effects
 Change the fracs/completions over time
Evaluate Refrac & Spacing Options

38. SUMMARY
Our reservoir simulation offers operators a high level
of science that can be applied quickly and reliably to
examine any well(s) in any type of reservoir in order
to answer essential questions regarding frac design,
refrac evaluations, post-completion frac analysis, well
spacing and more. Reservoir simulation can be used
to answer all of these and other important field
development questions in a timely manner.

39. DICK BARDEN
Graphical Reservoir Modeling Corp.
Parker, CO and Granbury, TX
303-570-6382
info@grm-Daedalus.com