Some Lessons on Application of Horizontal Wells from the Western Canadian Experience

Abstract

Horizontal wells are usually drilled as development wells with a motivation to recover incremental oil and to accelerate production. In other words, they are meant to access and recover oil from certain locations such that ‘poorly-floodable’ and otherwise ‘poorly-drainable’ oil ultimately left behind in the reservoir, is significantly reduced. Clearly, their suitability is linked to reservoir characteristics, heterogeneity and reservoir mechanisms. In many (but not all) situations when infill wells are economically viable, horizontal wells significantly enhance return on investments. They are important to Canada as one study1 estimated potential incremental oil reserves due to horizontal wells at 450 million cubic meters (2.8 billion barrels). A recent study of about 12,000 horizontal wells drilled in the Western Canadian Sedimentary Basin over the last decade2 revealed that an average horizontal well added reserves by roughly twice over that added by an average offset vertical well drilled in the same pools and over the same period. If the average cost of a horizontal well was also higher by a factor of two, this points to identifying situations where horizontal infill wells would be more cost-effective. It may also be pointed out that other (but earlier) studies3,4 suggested that about one out of three horizontal wells in Western Canada would not be profitable. Economic success rate for vertical development wells in the basin, on the other hand, is usually assumed to be in the 80 to 85% range. This paper reviews many aspects of the observed success/ failure of horizontal wells in different regions of Western Canadian Sedimentary Basin. It is emphasized that whereas horizontal wells offer many advantages, it may be prudent in many situations to drill vertical rather than horizontal infill wells, in view of various uncertainties about reservoir characteristics and risks involved. Introduction General Between January 1990 and June 2003, 137,950 vertical and 12,080 horizontal wells were drilled in Western Canadian Sedimentary Basin (WCSB); an overwhelming majority of these being development wells (infill, step-out). Fig. 1 shows active areas where horizontal wells were drilled and Table 1 summarizes drilling activity by year for the period, 1990–20012. These horizontal and offset vertical wells are almost all producers and, are producing in different situations such as primary, bottom or edge water, water-floods and EOR2,3,5. In view of maturing nature of WCSB, these development wells were drilled after due preparation by various oil companies. Preparations included detailed geophysical (3-D seismic), geological, reservoir and risk weighted economic analyses. Due to higher costs, they are generally placed in more prospective and/or less risky locations, relative to vertical development wells. Horizontal well locations are routinely screened via an in-depth review of available geological and economic performance data on the target pool/ analogous situations. In spite of these preparations, it is estimated that about 20% of the above mentioned vertical wells and 30% of horizontal wells would not be able to pay out their investments (preparatory work, land, drilling, completion and equipping costs). There is a finite inventory of prospective infill (or step-out) well locations in producing oil and gas pools. It is realized that some of the in-place oil may never be accessed in most pools. Availability of limited reservoir description is the main constraining factor. Seemingly best locations are drilled first and infilling is discontinued as the trend from latest drilled wells indicates that they are becoming economically unattractive. Also, prospects drilled at different dates are not equally attractive. Batches of horizontal wells added in different years at geological areas are not truly random.