"OPTIMUM" NUMBER OF OILFIELD DEVELOPMENT WELLS

Analytical Oilfield Techno-economic Model by Corrie

INPUT   DATA

Title  

Recoverable reserve millionSTB
Well initial rate STB/d
Oil price $/STB
Present value cost/well $million
Present value other costs $million
Productive area acres
Interest rate fraction

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OUTPUT   VARIABLES   &   GRAPHS

Variables  Values  Units 
 ♦  Optimum # of wells  
 ♦  Well density acres/well
 ♦  Well spacing (hexagonal) ft
 ♦  Production decline rate fraction/year
 ♦  Net present value $million
THEORY  &   FORMULAE

Analytic Oilfield Development Model

One of the most important variables needed in an oilfield development decision, is the preliminary estimate of the number of wells required to exploit the reservoir. This "optimum" number should satisfy both the technical and economic criteria. A single well can theoretically drain the whole reservoir, but it would take ages and become uneconomical. Thousands of wells can drain it faster, but it would be costly and uneconomical. Between these two extremes, there ought to be an ideal number of wells that would yield maximum profitability.

Also at the early decision phase, none of the reservoir and financial variables involved are known to a high degree of certainty. After making some simplifying assumptions, Corrie analytically determined an optimum number by finding the maximum economic return from an equation expressing net present value of the development project as a function of required wells. The two key resulting equations are given below:

        

Where:

   W = number of oil wells
   Wo = optimum number of oil wells
   Np = cumulative producible oil, million STB
   NPV = Net present value, $million
   Q = initial oil production rate per well, STB/day
   V = oil price netted back to the well, $/STB
   C = present value of capital investment per well, $million
   Z = present value of other investments not dependent on well, $million
   i = interest or discount rate, fraction per annum

BIBLIOGRAPHY