During the previous 14 years, North American unconventional reserve delineation activities have resulted in hundreds of billions of dollars in capital spending. Development of the accompanying defined reserves has generally been a recent occurrence; in most established plays, the typical wellbore has been associated with field development rather than delineation.
Approximately 102,000 horizontal wells have been drilled and completed in North America since 1990, at an industry cost of approximately USD 750 billion. However, there is a clear trend toward continuous improvement in both process and production response. Much of the learning curve has been based on trial-and-error (T&E) activities, rather than the deliberate acceptance and integration of upfront measurements with the application of physical realities and rigorous peer-reviewed algorithms, concepts, and practices.
During the early history of hydrocarbon extraction, operators experimented with various vertical well drilling and completion (D&C) processes to maximize production and optimize net present value (NPV). Given the steep learning curve that the North American industry has experienced and the significant D&C capital cost of a single unconventional well, it is no longer prudent for national oil companies (NOCs) outside North America to repeat the pattern of historical experimentation to achieve equivalent (or better) efficiencies and results.
This paper offers a number of suggestions and concepts that can be applied to dramatically shorten the learning curve and minimize capital expenditures associated with efficient extraction of ultralow-permeability hydrocarbon reserves. North American parameters that have clearly impacted performance (parallel lateral spacing, fracture spacing along a lateral, total exposed conductive fracture surface area, decreasing proppant diameter, lateral length, etc.) are examined. The quantitative value of applying rigorous reservoir modeling, intensive study of historical practices, and upfront measurements, such as far-field fracture mapping, near-wellbore (NWB) production flow-splitting, and long-term diagnostic shut-in testing, is then estimated by examining the cost of error in delineating and developing a given acreage position.