SPE 83621 Cost/Benefits of Horizontal Wells

This is a summary of state of the art horizontal well technology and a review of the economic benefits of horizontal wells. The paper describes various reservoir applications of horizontal wells from primary recovery to EOR applications. The paper includes field examples of different applications. . Although horizontal wells have been drilled as early as 1927, the major thrust of drilling horizontal wells started in 1980. Initial wells were short length wells (about 250 ft. long wells). In 1985, the first medium radius horizontal well was drilled using a down-hole mud motor. Since then, using horizontal wells has become a common practice. Today, the medium radius drilling technique is the most commonly used drilling method. In the U.S., the majority of applications are in low permeability, naturally fractured, carbonate reservoirs. However, in California, Alaska and Gulf of Mexico most of the wells are drilled in clastic reservoirs. Similarly, outside the U.S., most of the horizontal wells are drilled in clastic reservoirs. Horizontal wells have been used to produce thin zones, fractured reservoirs, formations with water and gas coning problems, waterflooding, heavy oil reservoirs, gas reservoirs, and in EOR methods such as thermal and CO2 flooding. The paper includes field examples with cost benefit analysis for various applications. Introduction Some of the early horizontal well efforts date back to 1930. After World War II, with the advent of jet perforation, major industry efforts were focused on casing the drilled hole and perforating in the desired zones. The field implementation of this perforation technique was a great success and at least for a while horizontal drilling took a back seat. In the late 70’s and early 80’s, with oil prices around $35 a barrel, interest in horizontal wells was reignited. The purpose of the horizontal wells was to enhance well productivity, reduce water and gas coning, intersect natural fractures and to improve well economics. 1 In the early 80’s, Elf Aquitaine, a French company, introduced horizontal wells to the oil industry to produce a heavy oil carbonate reservoir in the Rospo Mare Field, offshore Italy, in the Adriatic Sea. At the same time, in the U.S., several companies were using horizontal wells to reduce gas coning in the Abo Reef in New Mexico. They were also using horizontal wells to intersect fractures in the fractured carbonate reservoirs in Oklahoma, Kansas and Texas. The drilling technique used by Elf Aquaitain was very different from that used in the U.S. The Elf technology involved drilling long radius (1000 ft. turn radius, see Fig. 1) and long length (a few thousand ft.) wells. They were also using down-hole motors to turn the bit and drill wells. To date, this long radius drilling technology remains suitable to develop offshore fields around the world. In the U.S., initial efforts were with the “short radius” drilling technique where turn radius was around 30 ft. The wells were drilled using stabilizers, knuckle joint and flexible collars. A mushroom type, helical collar joint was used to provide necessary flexibility to the drill pipe to turn from the vertical to the horizontal direction in a short distance. Well completion was either open-hole or with a slotted liner. The typical well length was 100 to 300 ft. The major disadvantage of this drilling technology was its limited completion options and high cost of drilling. In the mid-eighties, the cost of drilling the 30 ft. radius well was of the order of $2000 to $3000 per ft. To minimize this drilling cost, and to drill long length wells, a medium radius drilling technology was developed. 2 JOSHI, S. D. SPE 83621 The first medium radius horizontal well was drilled in 1985. Turn radius for the medium radius wells was about 300 ft. to 600 ft. and it utilized down-hole motors. To date, medium radius technology remains the most common method to drill horizontal wells. This drilling method provides various completion as well as artificial lift options. It is quite common to see well lengths varying from 1000 ft. to 5000 ft. Short radius technology has also evolved over time and there has been significant cost reduction. This, however, remains a niche market mostly in low productivity wells in the U.S. and parts of China. In the U.S., small independents with marginal wells (production rate less than 10 BOPD) use low cost, short radius technology to enhance well production.