Big Completion Jobs are Not Always Better!

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There is a trend for pumping bigger completions.

Is bigger always better?

The answer is “No!”

Increasing completion size (more prop/ft, fluid/ft with more clusters) theoretically should increase the recovery to a certain point, which beyond that, it will only accelerate the recovery.

Critical Completion Design “CCD” is defined as the point that EUR enhancement (extra recovery by pumping additional proppant) is less than 5% per 1000 lb of proppant per ft (e.g. from 2000 to 3000 lb/ft).

In the graph below (hypothetical example), the completion size of 3300 lb/ft yields 18.0 % RF. However, increasing the size to 5000 lb/ft will only increase RF to 19%.

Acceleration means higher initial production rates in the early life of the well (e.g. high 30-day IP) with almost the same hydrocarbon recovery over well life.

So, if we cannot produce the well based on its given potential production rate (due to facility constraints or choking back due to low pricing, …), then we only hurt the economics of the well by over spending on completion.

To see the effect of recovery acceleration on NPV10, we analyzed two cases (see the image below):

  • Case 1: qi=600 bbl/D, Di=50.72%, Oil EUR= ~865 Mbbl
  • Case 2: qi=1000 bbl/D, Di=67.2%, Oil EUR= ~865 Mbbl

All the other input parameters such as GOR, WOR, b factor, Dlim and economic assumptions are the same.

Economic output:

  • Case 1: NPV10=8.51 $MM & IRR=53.0%
  • Case 2: NPV10=9.78 $MM & IRR=76.7%

The difference in NPV10 of these two cases is 1.27 $MM. So, as long as the additional well cost is less than 1.27 $MM, case 2 is economically justified.

One issue that we need to be careful when pumping big completion jobs is “frac hits”. Big completions increase the chances of an offset producer, gets frac hit, and requires a coil tubing cleaning job. Frac hits can improve (happens in Bakken) or worsen the offset producers’ production profile and in some cases totally killing the offset well (happens in Eagle Ford).

Also, we might fracing into non-hydrocarbon bearing zones with a potential of producing a huge amount of water!

Okay, now, let’s look at it some real data.

The map below shows almost 800 Eagle Ford wells operated by EOG located in Gonzales County mainly in the oil window. We forecasted each well and performed economics to get EURs and NPVs.

The charts below show oil EUR versus proppant volume. As you can see, oil EUR increases with completion size at a higher slope at lower completion size and starts to flatten as completion size increases. Pumping larger completion than CCD has very little effect on EUR enhancement.

Critical completion can be estimated from one or combination of the following methods:

  1. Numerical simulation for a selected group of wells
  2. Statistical analysis
  3. Machine learning techniques

Each method has its pros and cons which we will discuss it later.

It’s important to know that Critical Completion Design is different from Optimum Completion Design. Optimum design is a function of economic assumption and well performance profile, which can be estimated by a combination of NPV, IRR, and profitability index.

Overall, as EUR increases, NPV increases as well:

If the recovery acceleration justifies the extra completion cost, the optimum design would be a larger design compared to critical.

Any completion size less than optimum will leave reserve behind, which is difficult to access in future.

To optimize the completion size, we should always take into account the well spacing. Generally, pumping big completion requires wider well spacing.