Abstract for: Modeling and Simulating the Effect of Well Quality on Oil Production and Profitability using System Dynamics Model
It is true that the recent increase in the development of unconventional oil and gas assets worldwide is a result of the breakthroughs and advancements in both horizontal drilling and hydraulic fracturing technologies. The problem is that the wastewater produced from these increased oilfield activities is highly saline (~175,000–350,000 ppm Total Dissolve Solid (TDS). 90% of all wastewater is lightly treated to remove organics and then disposed of by injection through disposal wells in the Dakota Group Formation. This directly impacts operating costs and is always expensive. There is a strong belief that these instances of high-water production are directly linked to poor well quality. Using Vensim DSS, this paper modeled and simulated the effects of well quality on desired production rates, oil production, and desired profitability. We also modeled the effects of well quality on water cut rate; water production; wastewater hauling, treatment and disposal cost; and their effects on the overall profitability of the well. We used McKenzie County, on the Bakken side of North Dakota, as a case study, and our results show that well quality plays a major role in both oil and water production. The conclusion was that operating costs are reduced in wells with less than 50% water cut, while wells with higher water cuts have higher operating costs.