American Oil and Gas Reporter - July 2017 - 59

SpecialReport: Horizontal Wellbore Construction
In the meantime, Bone Spring estimated ultimate recovery
values per foot of perforated interval appear to be best maximized
at lateral lengths of 4,500-5,000 feet (normalized by perforated
interval feet), with the highest values in Lea County, N.M., and
Loving County, Tx. (Figure 3)
The insights available from big data allow operators to focus
their investment dollars on completion and drilling practices
that deliver results, and avoid overspending on techniques and
practices that waste money without bringing in added revenue
from increased production.
This is critical, because the point of having access to big
data is to find previously unknown drivers that illuminate how
operations deliver bottom-line dollars. The ability to effectively
learn from not only internal operations, but from competitors'
experiences, differentiates best-of-breed companies from average
companies. Now, operators easily can discover who is learning
(and optimizing) the fastest over time, and emulate their
completion practices.
For example, the graph in Figure 4 shows the net production
added over time for three operators in the Delaware Basin. Note
that for one of the operators, production volumes by well increased
markedly (the red circle defines the behavior inflection point) at
around well number 85. Determining what changes this company
has made before and after that well can pay huge dividends to
other operators that are willing to learn from their peers.
Optimizing Operations

In most cases, these impacts are geology-specific and
nonlinear. What does that mean? First, it means that rocks
matter, and the formula that optimizes production in one location
may not be the same two sections away. Acquiring 3-D seismic

ALLEN
GILMER

Allen Gilmer is co-founder and chairman of Drillinginfo. He
is active in all aspects of Drillinginfo's new product development and is recognized widely for his industry leadership and
vision. Gilmer holds several patents in multicomponent seismology. He received a B.A. in geology from Rice University and
an M.S. in geology from The University of Texas at El Paso.

data is a very small cost to incur in order to squeeze out an extra
150,000 barrels of production from each location.
Second, it means that operators run the risk of spending too

much or too little. In a study of several plays, we observed that
the very best operators were around 80 percent optimized

relative to criteria that actually could be examined. The average
operators got about half right, and the lowest performers were
only 10-20 percent optimized.

In one particular case in the Eagle Ford that involved roughly

100 wells, it was possible to show where operators overspent
by an average of $500,000-$600,000 a well by applying various

stimulation parameters far beyond the return breakeven. On top

of this, had they reallocated $150,000 a well of that to another

part of the equation that still offered return-on-investment gains
for each dollar spent, they could have produced significant incremental oil at a cost below $2 a barrel.

Such insights derivable from big data allow operators to

focus their dollars on completion and drilling practices that
deliver results, and not overspend on techniques and practices
that mar well economics by failing to yield incremental production

gains. Operators that rely on a formulaic "cookbook" for drilling

and completion procedures destroy value and condemn acreage
by their bad practices.

Unconventional oil and gas is certainly the planet's oyster,

and companies that avoid the 10, or 100 or even 1,000 well

cookbook will be certain winners. Operators that are nimble

and quick to learn from their results, and that can adapt quickly
to changing cost conditions-or maybe more importantly, to
subtle geological and petrophysical variabilities in their acreage
blocks-will be the most important companies in the world. r

PHILLIP
DUNNING

Phillip Dunning is a technical adviser at Drillinginfo and
an engineering officer in the U.S. Army. He also is a partner
in PD Drilling & Exploration. Dunning holds a B.S. in civil
engineering from Ohio State University and an M.S. in petroleum engineering from the University of Louisiana at
Lafayette.
JULY 2017 59

American Oil and Gas Reporter - July 2017

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