If Susquehanna Financial Group’s estimates are correct, the intelligent-wells sector is about to take off, with the market doubling this year vs. last, to U.S. $200 million, and potentially growing to $600 million by 2010. Susquehanna is basing its estimates on two trends: a shift to longer-term, multiwell contracts and greater demand for intelligent completions from independent oil and gas producers. Another factor that may also be influential in the projected growth of this market is the evolution of adjustable downhole choke technology. For example, since the first installation of Baker Oil Tools’ HCM-A variable downhole choke in December 2003, the remotely controlled, multiposition hydraulic choke has been the fastest-growing segment of the company’s intelligent-completions business. Adjustable chokes offer advantages in flow control and reliability to solve a wider range of completion and production problems than standard open/close flow-control technology. The technology has been shown to improve the economics of marginal fields and could help to explain the Susquehanna report’s conclusion that, although they have been late coming to the party, independents are now viewed as repeat customers with increased demand for intelligent completions. Choke Anatomy The HCM-A combines the basic chassis from Baker Oil Tools’ HCM surface-controlled sliding sleeves with incremental-choking technology. A balanced hydraulic piston opens and closes the choke. A tungsten carbide choke assembly and J-mechanism selectively adjust the choke without the need for complex electronics downhole. The choke is infinitely variable, with the understanding that six intermediate choke settings between fully open and fully closed must be selected by machining a profile before tool installation. Nodal analysis and reservoir studies are used to determine the optimum choke settings to achieve completion objectives. These may include any or all of the following: maximized oil production, reduced water cut, improved oil blend quality, sand control, avoidance of crossflow and consequent production losses, compliance with regulatory production restrictions, and production above the bubblepoint to avoid gas dropout in the reservoir. Input parameters for the nodal analysis include completion configuration, fluid properties, productivity indexes, wellhead pressures, formation pressures, and artificial-lift design. An advantage of the design is that the choke settings can be selected and changed in the field without the need to ship the tool back to the plant for rebuild. With demonstrated reliability and the additional functionality of a variable choke, intelligent-well systems can provide value by solving a wide range of completion and production problems, including addressing crossflow risks in commingled production, distributing water injection among multiple zones, and matching productivity or injectivity to optimize electrical-submersible-pump (ESP) performance. Dump-Flood Application In one case study, an operator in Nigeria elected to use an adjustable-choke-enabled intelligent well to initiate a waterflood without the need for a costly and long-lead-time surface infra-structure system. In this case, the pressure in the producing interval has been significantly depleted. However, significant additional oil volumes remain. To recover the remaining incremental reserves, the operator opted to initiate a waterflood to increase the reservoir pressure and sweep additional volumes of oil into the producing wells. The drawback to this option was the time and cost associated with implementing the surface infrastructure to inject upwards of 100,000 bbl of water.