Economics Optimization Hydraulics Fracturing Design on Steady State Reservoir

Outlines
Objective Methodology At glance in vertical hydraulic fracturing Economic parameters used in study Case Study Conclusion

Abah Petroleum Engineering ITB 2005

Objectives
Establish approaches on predicting economics of hydraulic fracturing treatment with pertinent economic criteria given (by analysis a given case). Understand level of economic sensitivity to particular treatment parameters on a given case.

Methodology
Concept of optimization for fracturing design

Methodology
Systematic approaches
Study on vertical hydraulic fracturing design Study on production performance profile Literate on fracturing economic design. Study on element of fracturing treatment cost Apply on case study as applicable with pertinent economic criteria.

Hydraulic Fracturing
Hydraulic Fracturing for well stimulation is to increase well productivity by creating highly conductive path compare to reservoir permeability some distance away from wellbore into the formation.

Reason to Fracturing Stimulation

Faster return of investment, i.e. accelerate production Improve ultimate recovery in some cases Decrease drawdown at the sandface for more efficient use of reservoir energy The production increases on possible reason: New zone exposed Reduce permeability bypassed (damage bypass) Flow pattern changed from radial to linear

Fracturing Mechanism
Fracture Initiation
Pumping high rate suitable fluid Fluid pressure build up > earth compressive strength Fractures along a plane perpendicular to minimum matrix compressive stress Fractures growing Proppant fill into wide fracture. Proppant create high conductive path after fracture close back

Fracture Propagation

Fracture Propagation
Fracture Orientation The fracture will propagate in a plane perpendicular to the minimum effective matrix stress. Usually the minimum stress is horizontal, and a vertical fracture results. Where horizontal matrix stress are unequal, there will be a preferred direction for the vertical fracture. Fracture Closure Pressure To hold the fracture open after initiation (or to just keep it from closing), the pressure in the fracture must exceed the pressure by an amount equal to the minimum effective rock matrix stress. This pressure is usually called the fracture closure pressure. The fracture gradient is the fracture closure pressure divided by depth.

Fracture Propagation
Fracture Propagation Pressure As the fracture is extended, the pressure in the fracture at the wellbore (fracture propagation pressure) increases as a result of fluid friction required to push the frac fluid through an increasing distance toward the tip of the fracture. Other factor that can increase fracture propagation pressure is the increasing of pore pressure in the rock near the fracture due to fluid leakoff (also increased closure pressure). Net Fracture Pressure Pressure in the fracture in excess of the fracture closure pressure is the net fracture pressure. Net fracture pressure acts against the elasticity, or Youngs modulus, of the rock to open the fracture wider. During the fracture job, the net fracture pressure (Nolte Plot) can be used as an indicator of fracture extension.

Fracture Design Calculation

Fracture Treatment Pressure Fracture Area Fracture Fluid Coefficient Fracture Width Fracture Efficiency Fracturing Hydraulics Fracturing Equipment Design

Regional Rock Stress

v

= Total vertical stress, psi = 0.007 D = average rock density, lb/ft = depth, ft = 0.007 D Pr = formation pore pressure, psi

h2 h1
h1 = Maximum principal horizontal matrix stress h2 = Maximum principal horizontal matrix stress

Pr

h =

1-

v Pr)

= Poissons ratio Horizontal Matrix stress depend on rock properties and pore pressure.

Fracture Pressure
Fracture Initiation Pressure
where min is the minimum horizontal stress, max is the maximum horizontal stress, T is the tensile stress of the rock material, is the poroelasticity constant and po is the pore pressure.

Fracture Pressure
Fracture Closure Pressure.
After a fracture calibration treatment, which is carried out without injecting proppant material, the fracture volume gradually decreases because of leakoff (and also because of possible back flow, if the injected fluid is flowed back through the well).

Fracture Propagation Pressure

Pressure is the stabilized value of the injection pressure for a longer period of time during which the fracture is evolving. Step rate to identify breakdown Pressure

Net Fracture Pressure

Actual pressure Closure Pressure

Fracture-related pressure points: (1) breakdown pressure; (2) fracture propagation pressure; (3) instantaneous shut-in pressure; (4) closure pressure; (5) fracture reopening pressure; (6) closure pressure from flow-back; (7) asymptotic reservoir pressure; (8) rebound pressure

Fracture Area
At = qiW f x 2 2x e erfc( x ) + 1 4K 2

Fracture Fluid Coefficient

K= 2K c K v K w
2 2 K v K w + K w K v2 + 4 K c2 K v2 + K w

2 K t x= Wf

and erfc( x ) = 1

2x x2 x4 x6 + + ... 10 1! x3 2! x5 3! x 7

Where Kc = viscosity & compressibility of reservoir fluid

K c = 0,0374p

keecR

At = total area of one face of the fracture at any time (t) during injection (ft2) qi = contant injection rate (ft3/min) T = total pumping time (minutes) Wf = fracture width (ft) K = fracture fluid Coefficient (ft/min)

Kv = viscosity of fracture fluid

K v = 0,0469

ke pe

p = diff pressure across face of fractures e = eff. Formation porosity Ke = eff. Formation permeability R = reservoir fluid viscosity (cp) f = fracturing fluid viscosity (cp) cR = koeff. Of isothermal compressibility reservoir fluid

Kw = fluid loss characteristics of reservoir fluid

K w = 0,0328 m 2A
m = slope of fluid loss curve A = cross sectional area of filter

Fracture Width
Perkins-Kern-Nordgren (PKN) model Kristianovich-Zheltov-Geertsma-DeKlerk (KGD) Model

Fracture Dimension with No LeakOff

Perkins-Kern-Nordgren (PKN)

Fracture Extent: Fracture Width:

Kristianovich-Zheltov-Geertsma-DeKlerk (KGD) Model
Perkins-Kern-Nordgren (PKN)

Fracture Extent: Fracture Width:

Kristianovich-Zheltov-Geertsma-DeKlerk (KGD) Model

Fracture Efficiency
The volume of fracture created divided by the volume of fracturing fluid injected. The efficiency is occurred since the fracturing fluid has leakage to formation
Eff = Vf Vi = W f At qit

Dimensionless Fracture Conductivity

Represent effect of a combination of fracture variables that express the function: Conduct the hydrocarbon inside the fracture to the well Collect the hydrocarbon from the surrounding matrix rock. Dimensionless Fracture Conductivity (CfD)Cinco-Ley&Samaniego,1981

Where:

C fD =

kf w kx f

Eff =

1 x2

2x x2 e .erfc( x) + 1

k = reservoir permeability xf= half length of propped fracture kf= permeability of proppant pack w = average fracture width

where

x=

2 K t Wf

CfD <<1 restricted within fracture, unrestricted while flow into fracture CfD >>1 un estricted within fracture, restricted while flow into fracture CfD optimum at 1.6

Optimum Fractured Volume

The propped volume of one wing of fracture has related function to fracture half-length as expressed below:

Productivity Index of Fracturing Treatment

General PI equation on fracture treatment with pseudo skin factor
PI f = 2kh 1 B 0.75 + ln re + s f rw

Vf k f xf = C hk fD
Where:

0.5

Xf = half length of propped fracture Vf = propped volume Kf = permeability of proppant pack CfD = dimensionless fracture conductivity h = fracture height k = formation pemeability

PI equation that introduced length of fracture (xf) & CfD

PI f = 2kh 1 B 0.75 + ln re + f (C ) fD xf

Dimensionless Fracture Conductivity to PI

Optimum PI on CfD opt = 1.6
PI f ,opt 2kh = B 1 0.869 + 0.5 ln re hk Vf k f
2
Cinco-Ley&Samaniego,1981

Frac Job Design Criteria

1. Select the right well
Consider the risks involved condition that increase risks are : Less than 15-20 ft of shale between the frac interval and gas or water sand. Others things being equal fractures tends to move upward due to sand fallout to the bottom of the fracture sometimes this effect can be maximized. Water or gas contact nearby and located in a direction so that fracture would go toward it. Well producing high GOR or WOR are poor candidates for fracturing unless it is free gas or water from a zone which can be shut off.

2. Design for the specific well

Design parameter to be considered are : Lithology and mineralogy of the formation Fracture geometry parameters (Young modulus, Poissons ratio, formation boundary horizontal matrix stress) Reservoir fluids and reservoir pressure/energy Physical well configuration

Frac Job Design Criteria

3. Optimize design over several jobs
Usually the experience gained in several carefully designed and evaluated jobs is necessary to achieve optimum design.

Hydraulic Fracturing Equipment

Fluid storage Proppant storage Blender Primary high pressure pumps The Operational control centre

4. Utilize calculation procedures as a guide

Treatment design must specify the following parameters : Frac fluid type Fluid volume Fluid viscosity and fluid loss schedule Proppant size and type Proppant schedule Injection rate schedule Basic design procedures : Determine required fracture length and conductivity Determine frac fluid characteristic and injection rates Determine a treatment pumping and proppant injection schedule Computerization speeds calculation procedures

Frac Job Evaluation

To evaluate the success of a frac treatment and help design succeeding treatments, it is necessary to know :
What sustained production increase was obtained What zone or zones were actually stimulated. For vertical fractures, what was the fracture height and azimuth. What was the fracture length What was the fracture conductivity

Production Performance Profile

Steady or Semi-Steady Sate Behavior (k>10 md) 1 dq Decline rate determination s= = bq m q dt
Performance decline:
McGuire, Tinsley, Frick, Guerero,1969

Constant percentage decline

Np =

qi e st e sti s
qi

Hyperbolic decline

Np = Np =

(1 m )si

1 (1 + ms t )mm 1 i

Harmonic Decline

qi ln(1 si t ) si

q= producing rate, qi = initial prod rate, t=time, b&m = constant, s = constant decline rate, si = initial decline rate, Np = cummulative prod

Production Performance Profile

Production Performance Profile

Unsteady State (Transient) Behavior
Amenable for k=1-10 md Numerical approaches Dimensionless type curves approaches (Holditch, Agarwal)

Economic Parameters
Present Value (PV)
calculates the cashflow resulting from revenue of production and expense
PV = Dn FV where: n = total number of compounding periods which the interest rate applies D = discount factor
1 D= 1 + i A nA
iA = annual interest rate nA = number of compounding periods per annum.

Economic Parameters
PV for Discrete or Continuous Increment
PV ]I = PV ]n 1 = D nV
L n n=I n= I L L

n n 1

Where PV increment by time & V indicating cash flow include income, expense, tax, etc D = discount factor For discrete increment:

For continuous increment

1 D= 1 + i A nA
1 D = iA n e nA

PV for Specific Performance Decline

Discrete on Constant percentage decline
PV ]
K 1

Net Present Value

NPV for economic treatment is applied to cover entire net cashflow from initial (qi) to abandonment (qa) producing rates. NPV = PVafter PVbefore PV(CT) Where CT is treatment cost

A 1 es = s

) 1 B

1 B 1 E [Dk ]
K =1

Discrete on hyperbolic decline

PV ]1 =
K

(1 m )s
K

K 1 m 1 m 1 D D K [1 + msi K ] m + (D 1) D n [1 + msi n] m E [Dk ] n =1

Discrete on harmonic decline

PV ]1 =
K 1 m 1 A n n D ln[1 + si K ] + (1 D ) D ln[1 + si n] m E [Dk ] si n =1

Where A = 30.4 qi U B = Des 1 D K +1 Dk = 1 1 D

K = number of monthly increment i = monthly interest rate U = average hydrocarbon value per unit produced E = monthly operating expense

Others Economic Parameter

Pay Out Time (POT): the length of time required for the cumulative cash position to reach zero. Discounted Pay Out Time (DPOT): the length of time for the present value of the cumulative cash position to reach zero. Return of Investment (ROI): ratio of cumulative net cash flow over the project life to the maximum investment/ cash outlay. Rate of Return(ROR): the compound interest rate whose discount factors will make the present value of projects net cash flow equal to zero. All parameters are assciated with a given interest rate and have meaning only wen the interest rate is secified.

Typical Fracturing Treatment Cost Element

Fracturing pumping equipment charges Pressure multiplier pump charges Propping agent pumping charges Fracturing material and material handling cost Blender service charges Slurry concentration handling charges Auxiliary Stimulation equipment, meter, manifold, tank Material and equipment transportation charges Stimulation technical & laboratory support Miscellanous service & license charges Others.

Typical Treatment Cost

There are 3 cost categories to be analysed:
Overhead, constant cost per job, such as the equipment rentals, design cost. Variable as time function, such as treating unit operating cost, manpower cost. Variable as quantity/ volumetric, such as proppant cost, fluid, additive cost CT= OC + C(t) + C(q)

Case Study
Reservoir, Decline Performance & Well Data
Depth = 6100 ft Net Pay = 10 ft Permeability = 5 md Porosity = 20% Water Saturation 20% Oil viscosity at reservoir condition = 1 cp Oil formation Volume Factor = 1.1 Oil Recovery Factor = 40% OOIP Initial reservoir pressure: 2500 psi Producing Wellbore BHP = 500 psi Spacing = 160 acres/ wells Wellbore diameter = 7.0 in Completion mode = cased hole Tubular length = 6000 ft Tubular ID = 3.25 in Prefact Initial Producing Rate : 200 bopd Post/Pre production Increase : Prats methods Abandonment rate = 5 bopd Recoverable oil at abandonment : 722,000 bo.

Combination of this 3 cost determines treatment cost variables

Fracture Design Data

Fracture closure pressure : 4000 psi Elastic modulus : 4x106 /psi Fracture height : 180 ft Fracture propagation model : Perkins and Kerns Pumping rate : 40 bpm Tubulars: 6000 ft, 3.25 id tubing Tubular volume: 5340 gals Maximum allowable treating pressure: 8000 psi Fracturing fluid properties:
Density (w/o proppant) = 8.4 ppg Apparent viscosity in the fracture: 100 cp Fluid loss coeff: 0.002 ft/min0.5 Spurt Loss: 0.01 gal/ft2 Pipe friction (in 3.25 ID)
20 psi/1000ft at 1 bpm 95 psi/1000ft at 40 bpm 270 psi/1000ft at 100 bpm

Economic Data
Company working interest: 100% Crude oil price: $25/bbl Well operating cost: $3000/month Annual discount rate: 15% Well drilling cost: $145,000/well Fracturing treatment cost
Fracturing fluid: 50 cent/gal Propping agent:
For 3000 md-ft conductivity: $8.00/CWT For 6000 md-ft conductivity: $60.00/CWT For 7000 md-ft conductivity: $70.00/CWT

Associated fixed cost: $5,000/well

Propping agent data:

Average concentration in fluid: 3.0 ppg Average fracture conductivity: 3000 md-ft

Flow Chart of Fracturing Optimization Process

As given reservoir, rheology, well and fracturing treatment data:
Before fracturing treatment After fracturing treatment Iterate on Each of xf, wf CfD, Vf,qf ,t, pfr Cost of treatment CT

Preliminary Hypothetical Result

Formation permeability

Fract Coeff (Kc)

Po

PIo

P q=PIf*P

PIf

q=PI*P

Np on 3 Steady State Model PVuntreat

Np on 3 Steady State Model PVtreat NPV of project

Preliminary Hypothetical Result

Fracture Conductivity

Preliminary Hypothetical Result

Net Pay

Preliminary Hypothetical Result

Well spacing sensitivity

Other sensitivity discussed

Sensitivity on steady state performance decline model Constant percentage decline Hyperbolic decline Harmonic decline Sensitivity of optimum fracture length on Fracture Height PKN vs. KGD Propagation Models Dimensionless Conductivity Fractures Oil prices Others

Summary & Feedback

It is possible to predict optimum fracturing treatment (represented by half-fracture length) on any given lithology, mineralogy of reservoir, fracture geometry, well configuration, reservoir & fracturing treatment characteristics. The sensitivity of optimum fracturing treatment is need to be analyzed to get better understanding on optimum fracturing treatment behavior.