This Friday, we had the kickoff meeting for our 2021 Parent/Child Industry Study. Seven operators are participating. They are contributing ten datasets from four shale plays: Midland Basin, Delaware Basin, Bakken, and Montney.
I am very excited about this project! The participants are contributing world-class datasets and expertise; we have a topic that is ideal for ResFrac’s unique capabilities; and we are addressing a critical topic that has direct impact on economic performance. All of this adds up to a project that will have a big impact.
Across the industry, interactions between parent wells and child wells (aka, infill wells) cause billions of dollars in production underperformance every year. The causes are only partially understood. The industry has a variety of mitigation strategies at its disposal, each with pros and cons. The optimal strategy depends on the local geologic setting, the prior history of the field, and economic inputs.
The project’s goal is to identify concrete optimizations that improve economic performance. It will be important for us to ‘close the loop’ – test these strategies in the field and evaluate performance.
The study has two tracks. First, we are performing a turnkey modeling study on each dataset: set up a model, calibrate to available data, run sensitivities, and optimize for economic performance. Second, we are asking bigger picture questions: what is happening and why? If we understand why things happen, then we can design engineering solutions. The process of building a numerical model forces us to build an internally consistent representation of reality. We run simulations to test our hypotheses, compare with the data, and iterate. The process helps us synthesize imperfect information, think critically, rule out hypotheses, and confirm hypotheses. Comparison between datasets – within basins and across basins – will help illuminate similarities and differences.
At the kickoff meeting, the participating companies presented on each dataset. The datasets include diagnostics such as fiber-optic (in both injection wells and offset wells), downhole imaging, geochemical fingerprinting, pressure and rate data (including from offset pressure observations wells), interference tests, and microseismic. With all of this data, we have an exceptional understanding of where fractures are going in the subsurface, what is their geometry, and where are they depleting. In the study, we will be evaluating best practices on how data sources should be incorporated into models and how observations vary from play to play.
I presented results from a literature review that I prepared for the study. I reviewed about 300 papers and summarized them in a written document and a presentation. I reviewed studies characterizing ‘what is happening and why’ and case studies with results from applying different mitigation strategies. The industry has already done a lot of great work on this topic; however, there is not a consensus on the best approach, and important questions remain.
Our study’s approach is unique. We are integrating a large, diverse group of data and expertise. For the modeling, ResFrac is the only commercial simulator that genuinely captures the physics of what happens during a frac hit, fully coupling: multiphase flow in the fractures as injection fluid displaces oil/gas; proppant remobilization; cross-flow through the well; the stress shadowing and fracture mechanics of propagation and reopening; conductivity and formation damage mechanisms, and poroelastic stress changes with depletion.
Reading the modeling papers for the literature review, I was struck by how many papers used unrealistic assumptions and arrived at answers that were inconsistent with common observations. It seems to me that there is a disconnect between much of the numerical modeling work in the literature and the actual data that is gathered in the field. Unifying advanced modeling with high-quality field diagnostics has been a major theme of the work that we do within ResFrac. It is critical to make sure that we use modeling in a way that integrates with a company’s workflow and truly delivers value.
We will be holding a group meeting every three months to keep participants updated on progress and continue the discussion. Between these meetings, we are in frequent contact with each company as we work through the modeling process.