Artificial-Lift Selection Strategy To Maximize Value of Unconventional Oil and Gas Assets

Abstract

This article, written by Special Publications Editor Adam Wilson, contains highlights of paper SPE 181233, “Artificial-Lift Selection Strategy To Maximize Unconventional Oil and Gas Assets Value,” by Peter Oyewole, SPE, BOPCO, prepared for the 2016 SPE North American Artificial Lift Conference and Exhibition, The Woodlands, Texas, USA, 25–27 October. The paper has not been peer reviewed. The challenges of producing and lifting unconventional oil and gas economically is probably the most daunting phase of unconventional oil and gas development. The traditional approach of lift selection is no longer sufficient to manage unconventional wells effectively, with high decline rates between 40 and 80% in the first year. This paper presents an artificial-lift selection process to maximize the value of unconventional oil and gas assets. Introduction As the industry began developing unconventional oil and gas, the only options available for lift were the traditional artificial-lift systems that were developed for conventional oil and gas applications. These were adopted and applied to unconventional wells without major changes in technology or application. The result was obvious; lift systems that had performed efficiently in various environments and well conditions for decades struggled to work well in this new unconventional application. This paper presents some of the lessons learned and a holistic approach to artificial-lift selection strategy. The presentation includes a case study from the Permian Delaware Basin unconventional formations. The lift-evaluation process, which considers a combination of reservoir-fluid properties and well performance, was used to analyze the effect of various artificial-lift selection options on well value. The paper describes the three distinct and important periods of unconventional-well life and the effective artificial-lift systems applicable during each period. An artificial-lift system is phased over the life of the well on the basis of current and expected production-rate requirements and lift-method capability. Artificial-Lift Systems in Permian Delaware Basin Electrical Submersible Pumps (ESPs). An industrial reward structure based heavily on initial production rate and cumulative production of the first 90 and 180 days, together with record high oil prices, made ESP systems the most favorable lift system in the basin. ESP systems, with their ability to draw down the well and deliver record production rates, became the first lift system installed in wells after the initial well completion. Fracturing sand and gas handling became the primary root cause of most ESP failures. The 3- to 6-month run life was considered an acceptable failure frequency in the basin. The industry responded with improved technology to mitigate both sand and high-gas-production problems, which resulted in some measurable success. Rod-and-Beam Pump. The rod-and-beam pump is the Greater Permian Basin’s most popular artificial-lift system. The low normal lease operating expense (NLOE), because of low failure costs and low failure frequency, led to several beam-pump installations in the Delaware Basin.