This document presents a methodology for refining well locations during operational drilling in the presence of geological uncertainty. The methodology involves: 1. Creating a strategy in advance that assesses potential development scenarios and defines rules for adapting the development system based on information from production drilling. 2. Generating a "technological tree" of possible development system solutions for a well pad that will undergo production drilling. 3. Testing the methodology on a real asset, where it increased expected NPV by 15% compared to the base case development system while maintaining the same recovery factor.

1. 181992
A Methodology for the Refinement of Well Locations
During Operational Drilling in Presence of Geological
Uncertainty
V.M. Babin, A.M. Vashevnik, O.S. Ushmaev A.P. Gruzdev, A.V. Pozdneev, A.S. Semenikhin,
B. da Costa Flach, M. Paredes Quinones, D. Echeverría Ciaurri
LLC «Gazpromneft Science & Technology Centre»

2. Slide 2
Development System Selection
181992 A Methodology for the Refinement of Well Locations During Operational Drilling in Presence of Geological
Uncertainty
Babin V.M.
Definition of the following parameters:
• wells placement
• wells type
• wells control parameters
• drilling rate
Subject to target objective function(s) optimization, for example, NPV, Recovery
Factor and so on.

3. Slide 3
Simulation
Эффекти
вность
Risks
Well pattern
Efficency
181992 A Methodology for the Refinement of Well Locations During Operational Drilling in Presence of Geological
Uncertainty
Babin V.M.
Development System Selection

4. What should we do with reservoir characteristics update?
Depends from the stage of field development
• Early stages
Development concept update
• Production drilling
Development system adaptation
Slide 4
181992 A Methodology for the Refinement of Well Locations During Operational Drilling in Presence of Geological
Uncertainty
Babin V.M.

5. Reservoir quality update during production drilling
1. We start to drill a new well pad
2. If reservoir quality will be far from the
expected we need to:
• promptly make a decision about
development system adaptation
• find a solution which maximize
reservoir potential
Slide 5
181992 A Methodology for the Refinement of Well Locations During Operational Drilling in Presence of Geological
Uncertainty
Babin V.M.

6. Strategy of Technological Solutions Evaluation
Idea
Create a strategy of local technical solutions of oilfield development in
advance (before production drilling)
Thereby:
• assess all options possible development scenarios
• define simple rules system: «if …, then drill …»
• suggest an uncertainties reduction program
Slide 6
181992 A Methodology for the Refinement of Well Locations During Operational Drilling in Presence of Geological
Uncertainty
Babin V.M.

7. Slide 7
New well pad (horizontal wells, top view)
Option DS1 Option DS2 Option DS3
W1
W2
W3
W4
Potential development systems
181992 A Methodology for the Refinement of Well Locations During Operational Drilling in Presence of Geological
Uncertainty
Babin V.M.

8. Slide 8
Technological tree example
181992 A Methodology for the Refinement of Well Locations During Operational Drilling in Presence of Geological
Uncertainty
Babin V.M.

9. Slide 9
Navigation through technological tree
181992 A Methodology for the Refinement of Well Locations During Operational Drilling in Presence of Geological
Uncertainty
Babin V.M.
1
23
3
4
W1
W2
W3
W4
1
3
3
2
4
4
Option DS1 Option DS2 Optino DS3

10. Slide 10
Chose a path with maximum
expected NPV
Chose a path with maximum
expected NPV
Calculation and usage of technological tree
ENPV – Expected value of NPV
181992 A Methodology for the Refinement of Well Locations During Operational Drilling in Presence of Geological
Uncertainty
Babin V.M.

11. Slide 11
Real asset problem definition
Input data:
• base case for development system:
horizontal wells 1000m with row
distance betwee 300m
• defined set of uncertainties
Goal:
• NPV maximization
Approach:
• Find an optimal strategy of local technological solutions for development
system adaptation
The structure of the reservoir: vertical slice across the axes
of horizontal wells
181992 A Methodology for the Refinement of Well Locations During Operational Drilling in Presence of Geological
Uncertainty
Babin V.M.

12. Slide 12
181992 A Methodology for the Refinement of Well Locations During Operational Drilling in Presence of Geological
Uncertainty
Babin V.M.
Real asset problem definition
Development system parameters variance:
• row distance
• production-injection wells ratio
Well pad – an area of 1200m length
• Standard approach require to decrease
number of considered uncertainties that
decrease potential expected NPV of the
project
• Need to justify some uncertainties
reduction program
Base case

13. 181992 A Methodology for the Refinement of Well Locations During Operational Drilling in Presence of Geological
Uncertainty
Babin V.M.
• Technological tree of
possible development
system solution automatic
generation for well pad
production drilling;
• Expected NPV value
increase at 15%* with the
same Recovery Factor
level
* In respect to pre-
defined base case
Slide 13
Methodology test at real asset

14. Slide 14
181992 A Methodology for the Refinement of Well Locations During Operational Drilling in Presence of Geological
Uncertainty
Babin V.M.
1. New methodology proposed of development concept adaptation that
doesn’t require additional computation experiments during
production drilling;
2. The methodology allows to make dynamic decisions about well
placement on a basis of information received during production
drilling;
3. Methodology allows to justify uncertainties reduction program
Conclusion

15. Back-up slides
181992 A Methodology for the Refinement of Well Locations During Operational Drilling in Presence of Geological
Uncertainty
Babin V.M.

16. Type of Uncertainties
The structure of the reservoir: vertical slice across the
axes of horizontal wells
The low degree of confidence in the local
properties:
• thickness
• absolute permeability
• aquifer activity
• different sedimentary regions
connectivity
• relative permeability
181992 A Methodology for the Refinement of Well Locations During Operational Drilling in Presence of Geological
Uncertainty
Babin V.M.

17. Production Forecasting
Simplified hydrodynamic model of the well pattern (well pad)
181992 A Methodology for the Refinement of Well Locations During Operational Drilling in Presence of Geological
Uncertainty
Babin V.M.

18. How to Make Decisions?
1. Start to drill «base» well pattern #0
2. Form the operational well or its appraisal branch clarify local reservoir property
• if h1 < h < ht1 – less dense (*)
• if ht2 < h < h2 – more dense pattern (**)
1. High well density
2. low well density
0. “baseline” – average well density
Rules like (*) and (**) are calculated before
well pad drilling;
In the process of drilling all solutions are
dynamic, without recalculation
ht1
h
NPV
1
2
h1 ht2 h2
0
181992 A Methodology for the Refinement of Well Locations During Operational Drilling in Presence of Geological
Uncertainty
Babin V.M.