Some Lessons on Application of Horizontal Wells from the Western Canadian Experience

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Abstract Horizontal wells are usually drilled as development wells with a motivation to recover incremental oil and to accelerate production. In other words, they are meant to access and recover oil from certain locations such that 'poorly-floodable' and otherwise 'poorly-drainable' oil ultimately left behind in the reservoir, is significantly reduced. Clearly, their suitability is linked to reservoir characteristics, heterogeneity and reservoir mechanisms. In many (but not all) situations when infill wells are economically viable, horizontal wells significantly enhance return on investments. They are important to Canada as one study1 estimated potential incremental oil reserves due to horizontal wells at 450 million cubic meters (2.8 billion barrels). A recent study of about 12,000 horizontal wells drilled in the Western Canadian Sedimentary Basin over the last decade2 revealed that an average horizontal well added reserves by roughly twice over that added by an average offset vertical well drilled in the same pools and over the same period. If the average cost of a horizontal well was also higher by a factor of two, this points to identifying situations where horizontal infill wells would be more cost-effective. It may also be pointed out that other (but earlier) studies3,4 suggested that about one out of three horizontal wells in Western Canada would not be profitable. Economic success rate for vertical development wells in the basin, on the other hand, is usually assumed to be in the 80 to 85% range. This paper reviews many aspects of the observed success/failure of horizontal wells in different regions of Western Canadian Sedimentary Basin. It is emphasized that whereas horizontal wells offer many advantages, it may be prudent in many situations to drill vertical rather than horizontal infill wells, in view of various uncertainties about reservoir characteristics and risks involved.