Robust Well-Test Interpretation by Using
Nonlinear Regression With Parameter and
Data Transformations
Aysegul Dastan, SPE, and Roland N. Horne, SPE, Stanford University
Summary
Nonlinear regression is a well-established technique in well-test
interpretation. However, this widely used technique is vulner-
able to issues commonly observed in real data sets—specifically,
sensitivity to noise, parameter uncertainty, and dependence on
starting guess. In this paper, we show significant improvements
in nonlinear regression by using transformations on the parameter
space and the data space. Our techniques improve the accuracy of
parameter estimation substantially. The techniques also provide
faster convergence, reduced sensitivity to starting guesses, auto-
matic noise reduction, and data compression.
In the first part of the paper, we show, for the first time, that
Cartesian parameter transformations are necessary for correct
statistical representation of physical systems (e.g., the reservoir).
Using true Cartesian parameters enables nonlinear regression
to search for the optimal solution homogeneously on the entire
parameter space, which results in faster convergence and increases
the probability of convergence for a random starting guess. Non-
linear regression using Cartesian parameters also reveals inherent
ambiguities in a data set, which may be left concealed when
using existing techniques, leading to incorrect conclusions. We
proposed suitable Cartesian transform pairs for common reservoir
parameters and used a Monte Carlo technique to verify that the
transform pairs generate Cartesian parameters.
The second part of the paper discusses nonlinear regression
using the wavelet transformation of the data set. The wavelet
transformation is a process that can compress and denoise data
automatically. We showed that only a few wavelet coefficients are
sufficient for an improved performance and direct control of non-
linear regression. By using regression on a reduced wavelet basis
rather than the original pressure data points, we achieved improved
performance in terms of likelihood of convergence and narrower
confidence intervals. The wavelet components in the reduced basis
isolate the key contributors to the response and, hence, use only the
relevant elements in the pressure-transient signal. We investigated
four different wavelet strategies, which differ in the method of
choosing a reduced wavelet basis.
Combinations of the techniques discussed in this paper were
used to analyze 20 data sets to find the technique or combination
of techniques that works best with a particular data set. Using the
appropriate combination of our techniques provides very robust
and novel interpretation techniques, which will allow for reliable
estimation of reservoir parameters using nonlinear regression.
Introduction
Well-test interpretation using nonlinear regression is a well-estab-
lished technique. Despite the ubiquitous application of nonlinear
regression, its ambiguous results, sensitivity to noise, and depen-
dence on good starting guesses constrain its use in practical well
testing. In addition, with the implementation of permanent down-
hole gauges, which are capable of acquiring data frequently over
Copyright © 2011 Society of Petroleum Engineers
This paper (SPE 132467) was accepted for presentation at the SPE Western Regional
Meeting, Anaheim, California, USA, 27–29 May 2010, and revised for publication. Original
manuscript received for review 29 March 2010. Revised manuscript received for review
6 August 2010. Paper peer approved 18 August 2010.
698
a long period of time, analysis of massive data sets is becoming
a challenge. This paper is about improving the performance and
reliability of the nonlinear regression through Cartesian transfor-
mations in the parameter space and wavelet transformation in the
data space.
Parameter-space transformations discussed previously in the
literature are mostly about reparameterization of the nonlinear-
regression problem. Lu and Horne (2000) and Sahni and Horne
(2005) used the wavelet transform in the parameter space, which
consists typically of the spatial distribution of the permeability
and the porosity. These authors used only the significant wavelet
coefficients of permeability distribution to reduce the number of
parameters, hence stabilizing the parameter-estimation algorithm.
In another reparameterization application, Carvalho et al. (1992)
investigated the effect of using the grouped parameter set {k,
k/C, Ce2s/}, typically used in traditional type curves, instead of
the primitive parameters {k, C, s}. Using the grouped parameter set
did not provide any advantage over the primitive parameters.
In conventional nonlinear-regression analysis of well tests,
it is customary to use the primitive parameters for solving the
nonlinear-regression problem. However, the logarithm of perme-
ability has been used in some applications (Mathisen et al. 2003;
Wong et al. 2002) and is known to improve the performance. The
reason behind the effectiveness of the logarithmic transformation
is more generally instructive and will be the centerpiece of our
discussion on parameter transformations in this paper. In the first
part of this paper, we discuss how parameters can be categorized
as either Cartesian or Jeffreys (Tarantola 2005) and that it is
more appropriate to assume that reservoir parameters are Jeffreys
parameters. Optimal performance and correct statistics in nonlin-
ear regression can be achieved only through the use of Cartesian
parameters, which means a Cartesian transformation is necessary
for all reservoir parameters (not only permeability). By using Car-
tesian-transformed parameters, we showed improved performance
in initial-guess statistics. A much wider range of initial guesses for
estimated parameters converged to the correct answer in a smaller
number of iterations. We also showed that confidence-interval
calculations are more accurate with Cartesian transformation. The
Cartesian transformation table for reservoir parameters frequently
used in well testing is provided in the first part of the paper.
The second part of this paper discusses data-space transfor-
mations using the wavelet transform. Wavelet transforms were
formulized in the early 1920s, but it was not until the 1990s that
a wide range of applications was proposed. Many of these applica-
tions were related to image processing [see, for example, Mallat
(1999)]. Recently, there have been quite a few interesting applica-
tions of wavelets in petroleum engineering also. These applications
include denoising data, identifying important transients for long
permanent-gauge data (Athichanagorn et al. 2002; Kikani and He
1998), and simplifying the parameter space by reducing the num-
ber of parameters to be estimated (Lu and Horne 2000; Sahni and
Horne 2005; Awotunde and Horne 2008). In our work, we used the
wavelet transform for data-space (pressure/time) transformation
and carried out nonlinear regression in the transformed space. The
technique we present reduces the number of data points used in the
nonlinear regression and automatically denoises the data. We used
the wavelet transform also to control the amount of information
taken into account at different stages during regression. We found
September 2011 SPE Journal
that our methods increase the accuracy of the parameter estimation.
We developed techniques for general reservoir types (e.g., reser-
voirs with skin, storage, and boundary effects, and dual-porosity
reservoirs) and for a variety of well tests.
In the third part of the paper, we describe the extensive testing
of the parameter-space and data-space transformation techniques
by application to 20 well-test data sets (three synthetic and 17
real-field cases).
Parameters in Inverse Problems
Inverse problem solving, in its broadest sense, can be thought of
as a probability problem. Any experiment we conduct (e.g., pres-
sure-transient analysis) is a change in our state of knowledge of the
parameters we are estimating. Each of the parameters we would
like to estimate (i.e., the reservoir parameters) has a prior prob-
ability distribution. When an experiment is conducted, we obtain
additional knowledge on the parameters and, hence, a posterior
probability distribution. Inverse problem solving is actually finding
the posterior probability distribution for each parameter given the
experimental data. Almost all of the nonlinear-regression tech-
niques discussed in the literature focus on techniques to find the
posterior distributions of the parameters. However, in doing that,
the procedures often make tacit assumptions regarding the prior
distributions of the parameters. In most cases, if nothing is speci-
fied, the prior probabilities of the parameters are assumed to be
uniformly distributed in the interval (∞,∞), which can contradict
the physical nature of the parameters (e.g., permeability).
The first step in forming a mathematical model of a system or
an experiment is to parameterize the system. Physical relations
and fundamental laws provide the relation between the parameters.
Nonlinear regression uses the physical relation (i.e., the forward
model) and measurement results for the observable parameters to
infer the values of other parameters. There is some degree of arbi-
trariness in choosing parameters. In many cases, you can come up
with a function of a parameter and introduce it as a new parameter.
Our aim in this part of the research was to investigate the repre-
sentation of the pressure transient using appropriate parameters
consistent with the physical phenomena.
In this part of the paper, we discuss the probabilistic nature of
inverse-problem solving in detail. We will discuss an important
classification related to prior distributions of parameters, and we
will see that most physical parameters, in particular well-testing
parameters, can (and should) be considered to be Jeffreys quanti-
ties. We can then find a suitable transformation to make those
parameters Cartesian. The idea is to start solving the inverse
problem with a uniform a priori distribution of parameters, which
is valid only for Cartesian parameters. In this paper, we propose a
conversion table for the set of parameters frequently used in well
testing. The importance of using true Cartesian parameters will
be demonstrated.
Jeffreys and Cartesian Parameters. Tarantola (2005) discussed
the importance of parameterization in a physical system by consid-
ering positive parameters encountered in science with reciprocals
that are also meaningful physical parameters corresponding to the
same physical phenomenon. Tarantola showed that the only unam-
biguous way of defining distance for reciprocal pairs is defining
the distance in terms of logarithms of parameters.
Definition of distance is central to nonlinear-regression algo-
rithms. In nonlinear regression, an objective function and its
derivatives are evaluated at successive points until a minimum is
reached—the minimum usually being defined as some function
of the distance between the model and the data. Regression algo-
rithms determine the direction and the step size to find the next
iteration given a starting point in the parameter space. A different
definition of distance results in a different path taken by the algo-
rithm and, hence, a difference in performance. The classification of
parameters as Jeffreys and Cartesian is instrumental in understand-
ing the underlying concepts in the definition of distance.
A homogeneous probability distribution is defined as the prob-
ability distribution that assigns to each region in the parameter
September 2011 SPE Journal
space a probability proportional to the volume of that region
(Tarantola 2005). Note that a homogeneous probability distribution
is not the probability of occurrence of the parameters. Rather, it is
an aspect of the parameter space being used. Transformations on
the parameter space result in a different homogeneous probability
distribution.
Let us first consider a 3D Euclidian coordinate system with
orthogonal coordinates x1, x2, and x3. In this system, the volume
element is
dV = dx1dx 2 dx3. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1)
Because the volume element is the same for all points in the
parameter space, the homogeneous probability distribution is con-
stant; i.e., the probability distribution function will be
f ( x1 , x 2 , x3 ) = c . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2)
for some constant c. Let us now consider a more general coordi-
nate system with coordinates u1, u2, and u3, for which the volume
element is expressed as
dV =  ( u1 , u2 , u3 ) du1du2 du3. . . . . . . . . . . . . . . . . . . . . . . . . . (3)
In this case, the homogeneous probability density will be
f ( u1 , u2 , u3 ) = c ( u1 , u2 , u3 ) . . . . . . . . . . . . . . . . . . . . . . . . . . (4)
As an example, in spherical coordinates, we have
dV = r 2 sin ( ) drd d . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (5)
and
f ( r , , ) = cr 2 sin ( ). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (6)
To find these expressions, we simply used the definition of
homogeneous probability distribution. Consider a space region
S. The volume it defines is found by integrating dV over S. For a
homogeneous probability density, the probability corresponding
to that region should be proportional to the volume of the region,
hence the probability-density function given in Eq. 4.
When the distance for a parameter  is defined as log ( 1 ) −
log ( 2 ) , we obtain the same distance for the reciprocal of . Let
us define the distance L with respect to some reference 0:
( )
L (  ) = log  0 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (7)
Now, we can define a distance element dL:
d
dL = . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (8)

Note that the infinitesimal distance element in 1D space is
actually a volume element. Combining Eq. 4 with Eq. 8, one can
find the homogeneous probability density for  as
c
f (  ) = . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (9)

If we define a new parameter v  log(), the distance L can
be defined as
L ( v ) = v − v0. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (10)
Consequently, the distance element becomes
dL ( v ) = dv. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (11)
For this volume element, the associated probability density is
constant:
f ( v ) = c. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (12)
699
 This analysis shows that, when we take the logarithm of a
parameter with homogeneous probability distribution in the form
of f1(•)  c/•, we obtain a parameter with homogeneous prob-
ability distribution of f2(•)  c.
With all this as background, we can now define Jeffreys and
are related through
Cartesian parameters. Parameters associated with homogeneous
probability distribution f(•)  c/• are called Jeffreys parameters.
On the other hand, parameters associated with homogeneous prob-
1 ,
2 ,$,
k ). . . . . . . . . . . . . . . . . . . . . . . . . . . (17)
ability distribution f(•)  c are called Cartesian parameters. We
have just proved that the logarithm of a Jeffreys parameter is a Car-
tesian parameter. This important property will be the basis of many
realizations (typically thousands) sampled uniformly in the
of the parameter transformations we investigated to improve the
performance of nonlinear regression in well-test interpretation.
Prior Probabilities. Given the definitions of homogeneous prob-
ability distribution and Jeffreys and Cartesian parameters, we can
now combine this information with the probability of occurrence
of parameters. The homogeneous probability distribution function
to be associated with a particular parameter is related to the more-
complicated problem of prior probabilities (Jaynes 1968). In realis-
tic decision problems, we usually have prior information about the
parameters. For example, looking at the results of an estimation,
we can generally determine (by engineering experience) if they
} = exp ⎨− 2 ∑ ⎡⎣ f ( ti ,
) − pi ⎤⎦ ⎬. . . . . . . . . . . . . . . (18)
are nonsensical. The fact that we are able to say certain values of
parameters are nonsensical implies that we must know the values
of the variables that are reasonable. This information must be taken
into account to avoid obvious inconsistencies (Gill et al. 1981).
Jaynes (1968) contrasts prior probabilities to direct probabilities
. We will accept
in an interesting way. Direct probabilities can be interpreted with
if the pressure function it corresponds to is likely to be measured
the frequency of occurrence (i.e., statistical hypothesis testing).
In other words, we think about experiments that may not exist
physically to find the probabilities. This is the way most commonly
used distributions are (objectively) defined, such as Bernoulli and
Poisson distributions. On the other hand, prior probabilities are
rather private by nature. The subjective nature of prior probabilities
comes from the fact that a prior probability is a state of knowledge
rather than being something measurable experimentally.
Jeffreys (1939, 1957) was the first to suggest that we assign
a prior probability distribution of d/ to a continuous parameter
 known to be positive. The basic reasoning behind his argument
is that using the parameter  or any power m should not make
a difference in essence in describing a physical relation. It can
be shown easily that any power of the parameter  has the same
homogeneous distribution volume element d/. In other words,
any power of a Jeffreys parameter is also a Jeffreys parameter.
Note that considering the case m  1, we see that this argument
also applies to the reciprocal of . This gives us a good reasoning
to define physical parameters (especially those having physically
meaningful reciprocals) as Jeffreys parameters.
Tarantola (2005) discussed the relation between the homoge-
neous probability distribution and the dispersion parameters in
probability densities. We will consider the normal distribution
and the log-normal distribution here, given in Eqs. 13 and 14,
respectively.
= ⎡⎣
1 ,
2 , $
N ⎤⎦ .
f ( x ) = c exp ⎢ − ( x − 2 ) ⎥. . . . . . . . . . . . . . . . . . . . . . . . . . (13)
⎡ 2
⎤ For example, each point in this space may correspond to a par-
⎣ 2 ⎦
1 and
2 must reflect the sym-
g(x) =
c ⎡ log2 x 
exp ⎢ − ( ) ⎤⎥. . . . . . . . . . . . . . . . . . . . . . . . (14)
x ⎣ 2 2 ⎦ distance:
The parameter is the dispersion parameter in both of those
) ( )
equations. Tarantola argues that, for consistency, as → ∞, the
1 −
2 = 1,1 −
2 ,1 $ +
1,N −
2 ,N . . . . . . . . . . . . . (19)
probability densities should approach the associated homogeneous
probability density for that parameter. We see that
lim f ( x ) = c . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (15)
→∞
and
c
lim g ( x ) = . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (16)
→∞ x and storativity ratios, and initial pressure. This list, of course, can
700
Hence, a quantity with normal probability density is a Cartesian
parameter and a quantity with log-normal probability density is
a Jeffreys parameter. This important property allows us to check
whether a parameter is Cartesian using Monte Carlo simulations.
I
Let us assume that the reservoir parameters
a forward-model function as
p ( t ) = f ( t ,
In a Monte Carlo simulation, we consider a large number of
I
parameter space for a given range of the parameter set being used.
We can run each point through a threshold algorithm (a random
process) to find out whether we should accept or reject that point.
For example, using Eq. 17, we can generate a hypothetical data set
of N data points (ti, pi) for a given set of true values of parameters.
The time range and number of points should be chosen appropri-
ately to reflect the most interesting features of pressure-transient
behavior. [Any history data would also be incorporated in the f(t)
formulation by use of superposition.] We can define the following
probability of acceptance as
I ⎧ 1 N I 2⎫
Pr {
⎩ 2 i =1 ⎭
Eq. 18 can be interpreted as follows. Assume there is normally
distributed noise in the pressure measurement, with standard devia-
tion . Eq. 18 finds the likelihood of measuring the data set corre-
I
sponding to a randomly generated parameter set
I
given the noise. Notice that the probability of acceptance is unity
at the true answer and becomes smaller as we go away from the
true answer. If this accept/reject test is performed for a sufficiently
large number of trial parameter sets, the accepted sets correspond
to the probability distribution of the parameter space. Regions
with a high density of accepted points correspond to regions with
a higher probability of occurrence. Note that the distribution found
here is the posterior distribution of the parameters (i.e., the forward
model and the true answers are taken into account). However,
through Eqs. 15 and 16, we can infer the prior (or homogeneous)
probability distribution. In particular, if the probability distribution
of a parameter ends up being normal or uniform (uniform distribu-
tion can be considered as a special case of a normal distribution
with → ∞), then, from Eq. 15, we can assume the parameter to
be Cartesian. We will use this property in the next section to verify
that the transformations we propose are indeed Cartesian. The
rejection algorithm works reasonably well in one or two dimen-
sions. In larger-dimensional problems, the chances of acceptance
become very low and it is usually necessary to work with a very
large number of trials in the Monte Carlo process.
Parameter Sets Used in Well Testing and
Their Transformation
Consider that we have an abstract parameter space with each point
I T
corresponding to some set of parameters
ticular permeability, wellbore-storage coefficient, and skin factor.
I I
The distance between two points
metries of the problem. In fact, only rarely will these correspond to
a Cartesian coordinate system, where the distance is the Euclidian
I I
(
2 2
In fact, the homogeneous probability distribution that corre-
sponds to a Cartesian space (i.e., uniform distribution) is a very
special distribution. One may, of course, assume a uniform prior
probability distribution when there is no other information. This
assumption is only as good as any other assumption. In well test-
ing, typical parameters we work with are permeability, wellbore-
storage coefficient, skin, dual-porosity parameters, transmissivity
September 2011 SPE Journal
be extended further. Even though we do not have a good reason to
assume any parameter is Cartesian, in the past such an assumption
has been made very frequently, in most cases without reasoning.
In the preceding section, we have seen that, in the absence of
any other information, there are good reasons to believe that a
parameter is a Jeffreys quantity, provided, of course, the parameter
is positive.
With the exception of skin factor, reservoir parameters are posi-
tive quantities, and, therefore, they can be considered as Jeffreys
quantities. In addition, the distribution of permeability (k) in nature
is known to be log-normal.
In the preceding section, we showed that in the limit as the
spread parameter → ∞, the posterior probability should approach
the homogeneous probability distribution. From Eq. 16, the log-
normal distribution approaches the homogeneous distribution of a
Jeffreys quantity. Consequently, permeability should be a Jeffreys
quantity.
Skin factor, for many practical cases, ranges from 8 to 25.
Therefore, we can first transform s to obtain a positive intermedi-
ate quantity:
s+8
Y= . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (20)
25 − s
Note that the new variable Y has the property 0 < Y < ∞ and it
can be assigned to be a Jeffreys quantity. Similarly, for storativity
ratio , the intermediate transformation Z  /(1) has a range
0 < Z < ∞, given that 0 <  < 1. We assume all other parameters,
without using any intermediate transformation, to be Jeffreys
quantities.
In the preceding sections, we showed that we need to take the
logarithm of a Jeffreys quantity to make it Cartesian. Table 1 lists
some of the common reservoir parameters used in well testing and
the Cartesian transformations we propose for them. We should note
that these transformations are not unique, and it may be possible to
find other transformations that might work better in certain cases.
Nevertheless, in the experience of our study, this set of transforma-
tions performed substantially better than the untransformed case in
most practical well-test cases.
In the previous section, we discussed that Monte Carlo simula-
tions can be used to verify that a parameter set is Cartesian. To
verify the transformations proposed in Table 1 using Monte Carlo
simulations, we generated a true data set using the dual-poros-
ity (Warren and Root 1963) and pseudosteady-state models with
 =  true ± 4,  = true ± 4, re = re ,true ± 1, and pini = pini,true ± 0.5 . Using
this randomized parameter set, we calculated the pressure values of
the trial data set. Using the threshold function in Eq. 18, we decided
whether we want to keep that particular set of values. As discussed
earlier, the distribution of the accepted values corresponds to the
posterior distribution of the parameter. Fig. 2 shows the histograms
of accepted values of transformed and untransformed parameters
for a Monte Carlo simulation with 1,268,000 trial values, of which
1,041 were accepted.
In Fig. 2, we see that none of the original untransformed
parameters shows uniform or normal distribution. Consequently,
there is good reason to implement a transformation. On the other
hand, all five of the transformed parameters (x-axis terms with
overbars) show normal-like distribution. Fig. 3 shows the joint
distributions of some of the transformed-parameter pairs. Again,
the transformed parameters have normal-like distributions. Con-
sequently, the Monte Carlo simulations verify the validity of the
set of transformations we proposed. However, as noted before, the
transformations we proposed are by no means unique. It may be
possible to find better-performing Cartesian transformations for a
variety of data sets.
Performance Improvement Using
Parameter Transformation
In the commonly applied Gauss-Marquardt algorithm (or other
similar derivative-based Newton methods), at each iteration, we
make a quadratic approximation to the objective function at the
current point. The next iteration is the minimum of that approxi-
mate quadratic function. Consequently, the more quadratic-like
the true objective function is, the faster convergence will be.
Without transformation, the function will have quadratic behavior
only in the close vicinity of the function minimum. Fig. 4 shows
the contour plots of the objective function for transformed and
untransformed variables. We see that the parameter transforms
proposed in the preceding section (Table 1) make the function
more quadratic-like for a wider range of values around the function
minimum. Not only does being quadratic-like improve the perfor-
mance by reducing the number of iterations to converge, but also,
with transformed parameters, it is possible to choose from a wider
range of starting guesses and still find the minimum successfully.
This latter concept will be discussed next.
Using transformed parameters, the objective function becomes
more quadratic-like, and, therefore, Newton-type derivative-based
ktrue  100 md, Ctrue  0.01 STB/psi, strue  5, true  0.1, true 
1
107, re,true  5,000 ft, and pini,true  3,000 psi. Other relevant
parameters were chosen to be qB  1,000 RB/D,   1 cp, rw 
0.35 ft,   0.1, ct  1
106 psi1, and h  300 ft. Fig. 1 shows
the resulting drawdown data, which consist of 100 data points
104 md,
sampled logarithmically between t  5
104 hours to t  100 1
106 < C < 10 STB/psi, and 7.8 < s < 25. We used the Gauss-
hours.
In the Monte Carlo analysis, for each of the parameters, we picked
random values uniformly distributed in the transformed param-
eter space within the ranges k = ktrue ± 3, C = Ctrue ± 3, s = strue ± 3,
approaches result in fast convergence. To test the transform
pairs we proposed in the preceding section, we generated a
synthetic data set using k  163 md, C  0.015 STB/psi, and
s  7. We started the iterations from 1,000 different uniformly
distributed points within the parameter ranges 1 < k < 1
Marquardt (Marquardt 1963) algorithm with line search to seek
a minimum of the objective function. Fig. 5 shows the conver-
gence map for those 1,000 points. A three-parameter reservoir
model (permeability, storage, and skin) was used for the test. We

TABLE 1––CARTESIAN-TRANSFORM PAIRS FOR COMMON RESERVOIR PARAMETERS

Parameter Name Original Parameters Cartesian (Transformed) Parameters

Permeability k

Wellbore storage C

Skin factor s

Storativity ratio

Transmissivity ratio

Initial reservoir pressure pi

Distance to boundary re

September 2011 SPE Journal 701

 Data-Space Transformation in Nonlinear
Regression
In the first part of the paper, we described inverse-problem solu-
tion as a change in our state of knowledge. We discussed the
underlying basis and necessity of making transformations on the
Pressure, psi

parameter space for optimal nonlinear-regression performance. In

101
100
100
Time, hours
Fig. 1—The synthetic drawdown data used in the Monte Carlo
simulations in Figs. 2 and 3.
observed that the algorithm converges (within 20 iterations) for a
much wider range of initial guesses when transformed parameters
were used. Fig. 6 shows the number of iterations required to reach
the correct answer for the same test. As expected, the number of
iterations increases as the starting guesses are farther away from
the true answer. Using transformed parameters, it is possible to
addition to parameter-space transformations, it is also possible to
make transformations on the data space. In the second part of the
paper, we will discuss how the wavelet transform can be used to
organize the information content of the data and, consequently,
how the data can be manipulated in desirable ways to improve
the parameter estimation.
The Wavelet Transform. The wavelet transform is an expres-
sion of a function in one of many possible basis sets providing
a very effective organization of the information contained in
the pressure transient, which is especially useful for measuring
time evolution of frequency components. The wavelet transform
decomposes signals over a basis that is composed of scaled and
translated versions of a single mother function called a wavelet.
A wavelet is a normalized function with zero mean. Hence, for
a wavelet ,
+∞
∫  ( t ) dt = 0. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (21)
−∞
and
+∞
 =∫  ( t ) dt = 1. . . . . . . . . . . . . . . . . . . . . . . . . . . . . (22)
2

find the optimum point in fewer iterations. −∞

200 800
60
100
150 600
40
100 400
50
50 200 20

0 0 0
0 2 4 6 0
500 1000 1500 2000 4 6 8 –20 –18 –16 –14 –12
k λ ×10–6
k λ
150 80
400 60
60
100
40 40
200
20 50
20
0 0 0 0
0 0.05 0.1 0.15 0.2 –6 –4 –2 0 5000 10000 15000 7 8 9 10
C C re re
100 100 150
150
100 100
50 50
50 50

0 0 0 2950 0
–20 0 20 40 –4 –2 0 2 4 3000 3050 7.99 8 8.01 8.02 8.03
s s pini pini
600 80
60
400
40
200
20
0 0
0 0.5 1 –10 –5 0 5
ω ω

Fig. 2—Histograms of untransformed and transformed parameters showing posterior probability distributions through
Monte Carlo simulations.

702 September 2011 SPE Journal

 3100 14000
9.5
8.03 12000
3050 9
8.02 10000

pini

p ini
3000 8.01 8000

re

re
8.5
8 6000
2950 4000 8
7.99
2900 2000 7.5
0 0.5 1 –6 –4 –2 0 2 4 0 2 4 6 –20 –15
ω ω λ ×10–6 λ
×10–6 ×10–6
6 –12 –12
–14 4 –14
4
–16 –16

λ
λ
λ

λ
2 2
–18 –18
–20 0 –20
0
0 0.5 1 –6 –4 –2 0 2 –10 0 10 20 30 –6 –2 0 2
ω ω s s
0.8 2 30 2
0 20
0.6
0
–2
ω

s
ω

s
0.4 10
–4 –2
0.2 0
–6
0
0 0.1 0.2 –6 –4 –2 0 0.1 0.2 –6 –4 –2
C C C C
×10–6
–12 0.2
–2
4 –14 0.15
–4
C

C
–16 0.1
λ
λ

2
–18 0.05 –6

0 –20 0
0 1000 2000 3 4 5 6 7 0 1000 2000 3 4 5 6 7
k k k k

Fig. 3—2D scatter plots of untransformed and transformed parameters. Uniform and normal-like distributions for transformed
parameters verify that the transformation is Cartesian. Transformed variables are indicated by symbols with overbars.

For discrete signals, a family of wavelets can be obtained from N

1 ⎛ ti − 2 j n ⎞
a mother wavelet  as follows: Wf j ,n = ∑ f ( ti )  . . . . . . . . . . . . . . . . . . . . . . (24)
i =1 2 j / 2 ⎜⎝ 2 j ⎟⎠
1 ⎛ t − 2jn⎞
 j ,n = j / 2  ⎜ i j ⎟ . . . . . . . . . . . . . . . . . . . . . . . . . . . . (23)
2 ⎝ 2 ⎠ and
In Eq. 23, j is the scaling parameter, n is the dilation parameter,
and i  1, …, N is the time index. The forward and inverse wavelet f ( ti ) = ∑ Wf j ,n j ,n ( ti ). . . . . . . . . . . . . . . . . . . . . . . . . . . . . (25)
transforms, respectively, are j ,n

Untransformed Parameters Transformed Parameters

500
6
400
5.5
300
k

5
k

200
4.5
100
0.2 0.4 0.6 0.8 1 –2.5 –2 –1.5 –1 –0.5 0
C C
(a) (b)

Fig. 4—Contour plots of the objective function for transformed and untransformed parameters. The white asterisk shows the func-
tion minimum. The ranges for the parameters are the same. For the transformed case, the objective function can be approximated
better with a quadratic function.

September 2011 SPE Journal 703

 Untransformed (Jeffreys) Transformed (Cartesian)
10 10

8 8

C, STB/psi
C, STB/psi
6 6

4 4

2 2

0 0
0 2000 4000 6000 8000 10000 0 2000 4000 6000 8000 10000

(a) k, md (b) k, md

Fig. 5—Scatter plot of starting guesses. Red dots show successful results, and black dots show unsuccessful results. Success
was counted as convergence within 20 iterations to within a tolerance of 2% of the true parameter value. With transformed param-
eters, the algorithm successfully converged 39.4% of the time, whereas the convergence rate was 17.5% when no transformation
was used. Starting guesses that lead to successful convergence span the entire range of initial guesses for the transformed
case, but only small starting guesses for k lead to success for the untransformed case.

The wavelet transform is a linear transform. Each linear opera- Nonlinear Regression in the Wavelet Domain. Least-squares
tion can be expressed conveniently in terms of matrix operations. analysis aims to minimize the objective function in Eq. 27.
Eq. 24 can be written as
I N
I 2
E (
) = ∑ ⎡⎣ pi − pcalc ( ti ,
) ⎤⎦ , . . . . . . . . . . . . . . . . . . . . . . . (27)
Wf = AW f , . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (26) i =1

where each row of AW is a wavelet-basis function.
is the vector of reservoir parameters, and pcalc ( t ,
) is the model
One can choose from a number of different wavelet bases to
perform a wavelet transform. Daubechies wavelets (Daubechies
) with their
1992) have minimum size support for a given number of vanishing
moments, allowing for representing discrete functions accurately
with a small number of wavelet coefficients. In our analyses, we
where pi are the pressure data, ti are the corresponding time data,
I I
pressure function. As also described by Awotunde and Horne
I
(2008), the basic idea here is to replace pi and pcalc ( t ,
wavelet transforms and carry out least-squares regression in the
transformed domain:
I N

( )
EW (
) = ∑ Wpk − Wpcalc,k , . . . . . . . . . . . . . . . . . . . . . . . (28)
2
used Daubechies wavelets with four vanishing moments.
k =1
In the discrete wavelet transform (Eq. 26), in a strict sense, the
I
function f must be evenly spaced in time. Pressure gauges in some where EW (
) is the new objective function in the wavelet domain.
systems record pressure at fixed time intervals, but, in some sys- If we express Eq. 28 as a matrix operation,
tems, pressure is recorded logarithmically in time or recorded only I I I T I I
when there is sufficient change in its value. Using even sampling EW (
) = (Wp − Wpcalc ) (Wp − Wpcalc ), . . . . . . . . . . . . . . . . . (29)
is important for wavelet-based techniques that eventually rely on
reconstructing the signal. In our technique, as we will discuss, we using Eq. 26 in Eq. 29, we obtain
use a substantially reduced basis, which is far from providing a sen- I I I T I I
sible reconstruction. The reduced basis contains only a few wavelets EW (
) = ( p − pcalc ) AWT AW ( p − pcalc ), . . . . . . . . . . . . . . . . . (30)
selected on the basis of their magnitude or their sensitivities with
respect to reservoir parameters. Hence, for the applications presented where AW is a matrix with rows consisting of the orthonormal wavelet
here, uniform sampling is not necessary. Uniform sampling is impor- basis functions. Because we use an orthonormal basis, there are as
tant in applications requiring a reconstruction of the signal (e.g., many wavelets as the number of data points; hence, AW is a full
following noise removal). In our analyses, we did not use any inter- rank, N N matrix. AWTAW gives the identity matrix, making Eq. 30
polation and assumed that the existing sampling in time provided the the same objective function as in Eq. 27, hence yielding exactly the
optimal representation of changes in the pressure transient. same performance as regular least squares in nonlinear regression.

Untransformed Transformed
10 20 10 20
8 8
15 15
6 6
C

10 10
4 4

2 5 2 5

0 0 0 0
0 500 1000 1500 2000 2500 3000 3500 4000 0 2000 4000 6000 8000 10000
(a) k (b) k

Fig. 6—Scatter plot of number of iterations. Average number of iterations is 12.1 for the untransformed case and 10.9 for the
transformed case. Note also that there are twice as many points successfully converging in the transformed-parameter case.

704 September 2011 SPE Journal

 When the pressure data are transformed, it is very likely that
quite a few of the wavelet coefficients will be zero. The origi-
nal pressure data can be reconstructed (by Eq. 25) with no loss
using the nonzero components only. Hence, it is only necessary
to include in the basis the wavelets giving nonzero coefficients.
Furthermore, noise in the data can be eliminated by excluding the
high-frequency wavelet components with coefficients below a cer-
tain threshold. With the exclusion of zero and noisy components,
most of the rows of AW will be removed; however, the objective
function in Eq. 30 will still give the same error as Eq. 27.
The discussion here shows that a pressure signal with many
data points can be represented exactly with a much smaller num-
ber of wavelets and nonlinear regression can be conducted using
wavelets, achieving the same performance as with regular least
squares. This approach, compared to evaluating the model function
for each time data point, can be used to reduce the computational
load (without any practical change in regression) through develop-
ment of efficient algorithms to calculate the overlap integral of the
model function with the selected wavelets.
Our main motivation in this paper is different in that we not
only exclude the zero and noisy wavelet components, but also some
of the significant wavelet components, from the basis function. In
our approach, the number of wavelets included in the reduced basis
is typically on the order of the number of estimated parameters,
which would not be sufficient for a sensible reconstruction of the
original pressure signal. As a consequence, the error function in
Eq. 30 will be different from that of Eq. 27, giving an opportunity
for performance improvement of nonlinear regression in addition
to the data-compression and noise-removal benefits discussed.
We will show that even a very small number of wavelets can
be sufficient to find the best fit to the data. The performance of
nonlinear regression in the wavelet domain depends directly on the
selection of the reduced wavelet basis, which will be discussed in
the next section.
Wavelet-Based Nonlinear-Regression
Strategies
In this section, we discuss four different strategies that we pro-
posed to control the reduced wavelet basis set used in nonlinear
regression. Note that these strategies are only examples demon-
strating the capabilities of the wavelet analysis. On the basis of
the requirements of a particular problem, other strategies could
be designed. The wavelets in the reduced basis can be chosen
with respect to the magnitudes of the wavelet coefficients or the
sensitivities of the wavelet coefficients with respect to the reservoir
parameters. In Strategies 1 through 3, the reduced basis was chosen
on the basis of magnitudes only; in Strategy 4, the reduced basis
Time, hours
–3 –2 –1
10 10 10
3
10
Data
Wavelet fit
2
10
Pressure, psi
1
10
Regular St.1
0 k (md) 15.12 11.45
10 C (STB/psi)
0.0016 0.0091
s –2.0 7.78
pi (psi) 6997 3877
–1
10
(a)
Fig. 7—Pressure-transient fit (a) and progression of the objective function (b). The number of wavelets used is shown in dashed
curves. Regular least-squares regression (LS) follows more of a steepest-descent path, ending up in a local minimum. The wavelet
strategies converge to the global minimum, resulting in a good fit.
September 2011 SPE Journal
was chosen on the basis of sensitivities. Real-field data (Bourdet
et al. 1983) were used for the demonstration of Strategies 1 through
3, and a synthetic data set was used for Strategy 4.
Strategy 1: Constant Number of Wavelets. In the first strat-
egy, the reduced wavelet basis consists of a fixed number of
wavelets that are selected on the basis of their magnitudes. This
strategy improves the convergence properties of nonlinear regres-
sion. Least-squares regression makes a paraboloidal approxima-
tion to the objective function at each iteration, the minimum of
which becomes the next iteration. Usually, in the close vicinity
of an optimal point, the function shows paraboloidal (quadratic)
behavior, ensuring convergence for good starting guesses. How-
ever, highly nonlinear functions (e.g., the pressure transient) can
quickly deviate from paraboloidal behavior for points away from
the optimal point. As a result, poor starting guesses can lead to a
local minimum that does not give a good match between the data
and the model function. Expressing the objective function in a
reduced wavelet basis simplifies the objective function extending
the paraboloidal behavior, avoids local minima, and helps converge
to the global minimum. For success of Strategy 1, it is important to
keep the number of wavelets as small as possible [i.e., equal to or
slightly larger than the number of parameters (up to ~np3)].
Strategy 2: Coarse Start, Detailed Finish. Strategy 1 can help
with convergence, but using an approximate objective function can
limit the accuracy of final results. Strategy 2 consists of two steps.
We first start with a minimal basis similar to Strategy 1. Once con-
vergence (or a predetermined number of iterations) is achieved, the
second step continues from that point with a larger wavelet basis.
Consequently, the first step provides a better starting guess and the
second step provides an accurate answer.
Strategy 3: Add More Detail at Every Iteration. Strategy 2 can
be extended further to increase the amount of detail at every itera-
tion. In Strategy 3, we start with a minimal wavelet basis, as in
Strategy 2. At each iteration (or at every specified number of itera-
tions), one more wavelet is added to the basis. Hence, complexity
of the objective function is increased as the regression algorithm
progresses toward the minimum.
Fig. 7 shows a comparison of Strategies 1 through 3 on real
well-test data, which is a classic example of a damaged-well
response. The data were reported by Bourdet et al. (1983) and
also analyzed by Horne (1995, Test 22, page 249). We used the
Gauss-Marquardt (Marquardt 1963) nonlinear-regression algo-
rithm with line search. For reasonable starting guesses, the regular
least-squares approach converged to the global minimum. In the
0 1 2
10 10 10
St.2 St.3
11.45 11.46
0.0091 0.0091
7.79 7.79
3877 3877
(b)
705
 k C re
s ω λ (ft)
(md) (STB/psi)
2 True Value 200 0.0150 3.50 0.20 5.00e-7 2000
10 Least Sq. 281 0.0164 7.45 0.27 1.52e-8 2087
Strategy 4 188 0.0147 2.85 0.16 5.24e-7 2149
Pressure, psi

1 Data
10
Regular LS
Strategy 4

0
10

–1 0 1 2
10 10 10 10
Time, hours
(a) (b)

Fig. 8—(a) Synthetic data and fits using the least-squares and the wavelet approaches (Strategy 4). Strategy 4 gives a better
match between the data and the model curve. (b) Wavelet sensitivities for each parameter. The three wavelets in Group 1 were
used in the first three iterations. Subsequently, wavelets in Group 2 (wavelets sensitive to re) also were added to the basis. The
colors show the relative magnitudes for the quantities in each column such that dark red corresponds to the maximum value
and dark blue corresponds to zero in each column.

regressions shown in Fig. 6, to demonstrate the capabilities of
wavelets, we intentionally picked a poor starting guess (k  100
md, C  0.5 STB/psi, s  0, and pi  7,500 psi). All three wave-
let strategies converged to the global minimum at k  11.45 md,
C  9.1
103 STB/psi, s  7.78, and pi  3,877 psi, whereas
regular least squares converged to a distant local minimum. A
reasonable starting guess would lead regular least squares to the
stability of nonlinear regression, especially for reservoir models
with many parameters.
To test Strategy 4, we generated a synthetic-data set using
the dual-porosity model (Warren and Root 1963) with boundary
effects (pseudosteady state). Dual-porosity models are known to
be difficult to match reliably, hence our choice of this model as
a test. The true values for the parameters were k  200 md, C 
same global minimum.
107, and re  2,000 ft.
In Strategy 1, the number of wavelets was chosen to be four
(i.e., equal to the number of parameters). With five or more wave-
lets, Strategy 1 followed the exact same path as the regular least
squares, giving a wrong answer. Using fewer wavelets than the
number of parameters renders the regression underdetermined and
so is not applicable to Strategy 1. However, in Strategies 2 and 3,
we started with three wavelets (an underdetermined case) to avoid
undesired local minima. In Strategy 2, the number of wavelets was
increased to 10, starting with the fifth iteration, after which the
regression quickly converged to the global minimum. In Strategy
0.015 STB/psi, s  3.5,   0.2,   5
For this synthetic-data set, the time data were sampled logarithmi-
cally between t  0.01 hours and t 100 hours. Fig. 8a shows the
synthesized data, and Fig. 8b shows the magnitudes of the wavelet
coefficients and the wavelet sensitivities. In Fig. 8b, the leftmost
column shows the relative magnitudes of the 12 largest wavelets.
The magnitudes of the remaining wavelets were significantly lower
than the ones shown here. The wavelets were numbered from 1
(top, largest) to 12 (bottom, smallest). The columns to the right
show the wavelet sensitivities of the wavelets for each parameter,
calculated at the starting guess of k  1000 md, C  0.1 STB/psi,
3, the wavelets were increased one by one at each iteration up to s  1,   0.1,   1
106, re  1,500 ft. A good fit could not
10 wavelets, after which the number of wavelets was kept constant. be found with regular least-squares analysis, as shown with the
Strategy 3 followed a steepest-descent path between Iterations 3 blue curve in Fig. 8a. Especially, the dual-porosity parameters 
and 10 but then converged to the global minimum. The analysis
shows that the performance of regression can be improved by
controlling the amount of information taken into account (i.e., the
number of wavelets) as the regression progresses.
Choosing the wavelet basis on the basis of the magnitudes of
wavelets, as in Strategies 1 through 3, has a potential drawback.
When there is an abrupt change in the pressure transient, the wave-
let coefficients in the vicinity of the steep change tend to take large
values. Using large-magnitude wavelet coefficients corresponding
to unrealistic abrupt changes (e.g., outliers) can reduce the perfor-
mance of nonlinear regression. This problem can be avoided by
first detecting and then eliminating outliers using wavelet-based
techniques (Athichanagorn et al. 2002).
Strategy 4: Estimation on the Basis of Sensitivity Coefficients.
The last strategy demonstrates how wavelet-sensitivity coefficients
can be used to select a reduced wavelet basis. The basic idea in
Strategy 4 is to limit the degrees of freedom initially until a better
guess is achieved. The degrees of freedom can be limited by using
a basis that includes wavelets sensitive to a subset of the reservoir
parameters only. After a few iterations, a better guess is obtained
and wavelets sensitive to other parameters can be added to the basis
to converge to the global minimum. Strategy 4 helps improve the
706
and  deviated significantly from the true answer.
We applied Strategy 4 in the following way: In the first three
iterations, we used only the three wavelets in Group 1. This set
represents the wavelets most sensitive to each of the parameters,
except for re. Leaving re out reduced the complexity of the problem
initially. In the first three iterations, we obtained better guesses for
k, C, and s. Fig. 9 shows how the parameters changed with the
progress of nonlinear regression. Starting with the fourth iteration,
we also included the wavelets in Group 2, which are the wavelets
most sensitive to changes in re. As seen in Fig. 8a, there is a good
match between the model curve and the data. Strategy 4 improved
the stability of nonlinear regression and allowed for accurate esti-
mation of reservoir parameters for this synthetic-data set.
Discussion. In this section, we described several different examples
capitalizing on the multiresolution property of wavelet analysis.
Wavelet transformation provides a suitable platform to control the
amount of detail included in the analysis at any moment. We have
seen that the stability of the nonlinear regression can be improved
greatly by choosing appropriate strategies. As mentioned, what we
have included here is only a small subset of possible wavelet-based
techniques. Many other suitable strategies could be designed on
the basis of the data set being analyzed. We should also note that,
September 2011 SPE Journal
 1000 0.1 6
Least Sq. Least Sq.
St. 4 St. 4 5
800 True Val. 0.08 True Val.
4
600 0.06
k C 3
400 0.04 s
2 Least Sq.
St. 4
200 0.02 True Val.
1

0 0 0
0 2 4 6 8 10 0 2 4 6 8 10 0 2 4 6 8 10
Iterations –6 Iterations Iterations
×10
0.5 1
Least Sq. Least Sq.
St. 4 St. 4
0.4 True Val. 0.8 2500
True Val.

0.3
λ 0.6 re 2000
ω
0.2 0.4
Least Sq.
0.1 0.2 1500 St. 4
True Val.

0 0
0 2 4 6 8 10 0 2 4 6 8 10 0 2 4 6 8 10
Iterations Iterations Iterations

Fig. 9—The change in the parameter values during nonlinear regression using Strategy 4. The wavelet basis included the three
wavelets in Group 1 up to Iteration 3 (shown with vertical dotted line). In the subsequent iterations, additional three wavelets from
Group 2 were also added. Using Strategy 4, k, C, and s were refined first and then the remaining parameters were handled.

because a reduced basis set is used, noise elimination is achieved hand, parameter estimates found using the wavelet transform are
automatically in all of the strategies discussed in this section. much closer to the true answer.

Statistics of Initial Guess. We have discussed that wavelet-trans-

Performance Analysis of Wavelet-Based
Nonlinear Regression
Noise Performance. One of the main advantages of conducting
nonlinear regression in the wavelet domain is automatic noise
elimination. In the previous sections, we have seen that a reduced
wavelet basis offers several advantages in terms of stability of
nonlinear regression and accuracy of the estimated parameters. In
reduced-basis sets, wavelets corresponding to high-frequency com-
ponents in data are usually excluded because they do not carry criti-
cal information. Noise is a zero-mean random component added to
each of the data points. In most cases, the noise in each data point
is independent from that in the others, making it a high-frequency
component. Elimination of high-frequency wavelet components
from the basis, therefore, eliminates noise. We should note, how-
ever, that the least-squares estimator is a maximum-likelihood esti-
mator for a signal with normally distributed noise. Consequently, if
the noise is only in the pressure signal, using the wavelet transform
is not expected to improve the confidence intervals.
In the example shown in Fig. 10, we considered a scenario
where both time data and pressure data are noisy [see Dastan
and Horne (2009) for more details on the effects of time noise].
The figure shows parameter estimates as a function of noise for a
synthetic-data set for which the true answers of the parameters are
known. For each noise amplitude, 200 realizations were generated
and 95% confidence intervals were calculated using these realiza-
tions. There are two important aspects in the figure: the agreement
with the true result and the width of the confidence intervals. The
red and blue dashed lines show the estimated parameter values and
should be compared to the black dotted line (the true value). The
shaded regions represent the confidence intervals (in the vertical
direction). It is desired to have narrower confidence intervals.
Fig. 10 reveals that widths of the confidence intervals are gener-
ally comparable for the transformed and untransformed cases.
However, the regular least-squares-analysis estimates deviate from
the true result with increasing noise, especially for wellbore-stor-
age estimate, which can be attributed largely to the fact that noise
in time affects the early-time data more severely. On the other
formed nonlinear regression can improve the stability of nonlinear
regression. We showed that, using an appropriate strategy, one can
increase the chance of achieving a successful convergence to the
optimal point in the parameter space. Fig. 11 provides a more com-
plete picture of the statistics of initial guesses for the same data set
used with Strategies 1 through 3 (Horne 1995, Test 22, page 249).
We have used 1,000 different starting guesses uniformly distributed
(Fang 1998) on the parameter space of four variables k, C, s, and
pi. Fig. 11 provides a space map of the successful results on the
k–C plane. The wavelet-transform approach increases the chance
of success to a large extent. Out of the 1,000 uniformly distributed
starting guesses, 196 were successful using regular least squares
and 258 were successful using Strategy 3. Note that the range of
initial guesses was chosen to be artificially large to demonstrate the
difference. In practice, usually a better range for possible answers
is known, increasing the chance of convergence quite substantially.
In Fig. 11, we also observe that the successful starting guesses for
the least-squares case lie on a narrow band, resulting from cross
correlation between permeability and storage. On the other hand,
the successful results for the wavelet case span a much larger space
on the k–C plane. Consequently, the wavelet technique is less prone
to cross correlation between parameters because permeability and
storage affect different portions of the pressure transient, which is
easily isolated by the wavelet transform.
Application of Parameter- and Data-Space-Transform Tech-
niques to the Analysis of 20 Data Sets. To test the procedures
more extensively, we applied the parameter- and data-transfor-
mation techniques discussed in this paper to analyze 20 sets of
pressure-transient data, 17 of which were from real well tests
(Horne 1995). Incidentally, these data sets were studied earlier
also, using different nonlinear-regression techniques (Dastan and
Horne 2009).
The 20 tests analyzed were chosen to include ambiguous
interpretations, meaning multiple sets of parameters and multiple
reservoir models giving equally good fits. There are two pairs of
data sets (Data Sets 2 and 10 and Data Sets 3 and 8) for which

September 2011 SPE Journal 707

 36 72 108 144
250
t noise (seconds)

k estimate
200 Regular LS
Wavelet
True Answer
150

p noise (seconds)
100
0 0.5 1 1.5 2
36 72 108 144
0.02
C estimate t noise (seconds)

Regular LS
0.015 Wavelet
True Answer

0.1 p noise (seconds)

0 0.5 1 1.5 2
36 72 108 144
15
t noise (seconds)
s estimate

10 Regular LS
Wavelet
True Answer
5

p noise (seconds)
0
0 0.5 1 1.5 2

Fig. 10—Noise performance comparison of wavelet analysis (red) to regular least-squares analysis (blue). The noise in both
the time data and the pressure data is normally distributed. The horizontal axis shows the standard deviation of the noise. The
vertical axis shows the estimate (red and blue dashed lines) and the confidence intervals (shaded regions).

two different model functions were used to fit the same pressure
data, in an effort to analyze the effects of ambiguity. We considered
several reservoir models including dual-porosity reservoirs (Data
Sets 1, 8, 10, 15, and 20), reservoirs with rectangular and pseudos-
teady-state boundaries (Data Sets 9 and 17), cyclic production tests
(Data Set 16), acidized wells (Data Set 18), hydraulically fractured
wells (Data Set 19), falloff tests (Data Set 11), and transition data
analysis (Data Set 5). Data Sets 1, 16, and 17 were synthetically
generated, and the rest were real well-test data. Specific refer-
ences to the sources of the data sets can be found in Dastan and
Horne (2009).
We considered regular least squares and all four of the wavelet
strategies discussed in this paper.
• Strategy 1: We used np3 wavelets, where np is the number
of parameters used in the fit function.
• Strategy 2: We used np1 wavelets in the first step (up to the
sixth iteration) and np3 wavelets in the second step.
• Strategy 3: We started with three wavelets and incremented
until reaching np3 wavelets.
• Strategy 4: Wavelets most sensitive to k and s were used
in the first three iterations. From the fourth iteration through the
sixth iteration, wavelets most sensitive to the remaining parameters
(excluding k and s) were used. After the sixth iteration, we contin-
ued with np3 wavelets chosen by magnitude, hence representing
all the parameters in the basis.
We analyzed each strategy using both untransformed (Jeffreys)
and transformed (Cartesian) parameters, making a total of 10 cases
for each data set. A Monte Carlo analysis with 100 realizations
was used to calculate 95% confidence intervals by adding to the
original data realizations of normally distributed noise with 1-psi
standard deviation. We have developed a graphical method to
summarize the results for all the data sets. The graphs compare
the strategies in terms of the confidence intervals and the shifts in
the mean values of the parameters.
Fig. 12 shows the results for Data Set 1 and can be used as a
guide to understanding Figs. 13 and 14, which give the full results
for all 20 data sets. The upper row shows the results for no param-
eter transformation (Jeffreys parameters), and the lower row shows

Regular LS Wavelet
2 2
10 20 10 20

0 0 15
10 15 10

–2 10 –2 10
10
C

10
C

–4 5 10
–4 5
10

–6 0 –6 0
10 10
–1 0 1 2 3 –1 0 1 2 3
10 10 10 10 10 10 10 10 10 10
(a) k (b) k

Fig. 11—Parameter-space map of starting guesses that successfully converged to the optimal point for regular-least-squares
(Regular LS) and wavelet (Strategy 3) approaches. There are four parameters—k, C, s, and pi —but only the k–C plane is shown,
for brevity. The color corresponds to the number of iterations it takes to reach the optimal point. Of the 1,000 starting guesses,
the wavelet-transform approach was successful for 258 while the regular-least-squares case was successful for 196.

708 September 2011 SPE Journal

 Arrows mean the confidence interval is
wider than twice the acceptable limit:
> ±20% for k and C
Reference to LS mean
> ±40% for ω and λ
(Jeffreys case)
> ±2 for s

No parameter
k transformation
C (Jeffreys)
s
ω
λ

Reference width Cartesian

of “acceptable” transformation
confidence intervals

LS St. 1 St. 2 St. 3 St. 4

Fig. 12—Analysis results for Data Set 1. Mean value of the parameters and the confidence intervals are shown with respect to
regular least squares with no parameter transformation. The upper row shows the results for the untransformed case, and the
lower row shows the results for Cartesian transformations. The horizontal dashed line in the center provides a reference to the
mean values of the untransformed, regular least-squares case. The other two dashed lines show the limits for acceptable con-
fidence intervals for parameters. Note that the vertical-axis scaling is different for each parameter.

the results for Cartesian-transformed regression. The columns
show the results for regular least squares, Strategy 1, Strategy 2,
Strategy 3, and Strategy 4. There are three horizontal dotted lines
in each row to help with the comparison of confidence intervals
and shifts in mean values. The regular least-squares case with no
parameter transformation was used as the reference for the other
cases. The dotted line in the center shows the reference for mean
values. The vertical shift of the center of a colored rectangle shows
how much the mean deviated with respect to the reference case.
The height of each rectangle shows the confidence intervals. The
vertical scale can be inferred from the upper and lower dotted lines,
which show the acceptable confidence intervals. The acceptable
limits were assumed to be 20% for the dual-porosity param-
(The very narrow confidence intervals for the least-squares cases
are because of the regression failing to move forward from the
starting guess.) In Data Set 15, both wavelet strategies provided
a good fit, whereas the regular least-squares approach failed. In
Data Set 17, both the regular least squares and Strategy 3 provide
a visually good fit, whereas Strategy 1 failed.
The objective function used in nonlinear regression is identical
for transformed and untransformed parameters. Hence, the global
and local minima are in identical positions in the parameter space.
Only the gradient and Hessian are different, resulting in a different
path in nonlinear regression. In a comparison of untransformed and
transformed cases in Figs. 12 and 13, it is possible to observe wider
confidence intervals for transformed parameters in some of the
eters ( and ), 1 for the skin factor, and 10% for all other
parameters (Horne 1995). For visual convenience, the vertical scale
for each parameter was set such that the acceptable confidence
intervals align. Hence, for example, a rectangle that fits exactly
between the upper and lower dotted lines would correspond to a
10% confidence interval for wellbore storage, 20% confidence
interval for storativity, and a confidence interval of 1 (in absolute
value) for the skin factor. The arrow points at the ends of bars are
used to denote the cases for which the confidence intervals were
too wide to be displayed on the graph (i.e., the confidence interval
for the corresponding parameter was wider than twice the accept-
able limit for that parameter). The white triangle in the center of a
rectangle shows that the mean deviated so much that the rectangle
would actually fall outside the graph limits (i.e., the mean shifted
data sets. It should be noted that wider confidence intervals do not
necessarily mean that the parameter transformation did not work
well. On the contrary, wider confidence intervals show that there
were indeed multiple plausible solutions that the untransformed
case missed. Data Sets 2, 3, 5, 8, 9, and 10 are short of reaching
radial-flow behavior, which creates ambiguity in the estimation.
Indeed, Data Sets 2 and 10 are the same pressure data, fit using
different model functions. Similarly, Data Sets 3 and 8 are the same
data sets fit using different model functions. For such ambiguous
data, having smaller confidence intervals does not necessarily
mean the fit is more reliable and a good visual match does not
guarantee a good answer. In these data sets, because there are
insufficient data in the infinite-acting part, in many cases, one
can choose many different values of permeability and match to a
more than 20% for  and , more than 2 for s, and more than 10%
for the rest of the parameters).
Figs. 13 and 14 summarize the results of the analysis for all
20 data sets. We see that the wavelet transformation provides an
advantage over least squares when the reservoir description is
relatively complex, such as dual-porosity reservoirs (Data Sets 1,
8, 10, 15, and 20) and reservoirs with boundaries (Data Sets 9 and
17). For relatively simple reservoir descriptions, wavelet-transform
analysis and regular least squares showed generally comparable
performance. Among the different strategies used for data trans-
formation, Strategy 4 can yield narrow confidence intervals, espe-
cially when the number of parameters is large.
Examination of the p-vs.-t graphs for the parameter estimates
reveals that both least squares and wavelet transforms result in a
good fit for all cases except Data Sets 12, 15, 17, and 19. In Data
sets 12 and 19, both least-squares and wavelet approaches failed.
September 2011 SPE Journal
corresponding value of skin, resulting in large confidence intervals
in estimation. Relative performance of the various techniques was
analyzed further in Dastan and Horne (2010).
Conclusions
In this work, we analyzed parameter-space and data-space transfor-
mations during nonlinear regression in well-test interpretation. We
showed that Cartesian transformations in the parameter space and
wavelet transformation in the data space improve the performance
of nonlinear regression significantly.
We proved the necessity of parameter transformations for
reservoir parameters. We showed that most physical parameters
are Jeffreys quantities, whereas nonlinear regression works best
with Cartesian parameters. For the first time, we proposed suitable
transformation pairs for commonly used reservoir parameters. We
709
 1 2
k k
C C
s s
ω
λ

LS St. 1 St. 2 St. 3 St. 4 LS St. 1 St. 2 St. 3 St. 4

3 4
k k
C C
s s

LS St. 1 St. 2 St. 3 St. 4 LS St. 1 St. 2 St. 3 St. 4

5 6
k k
C C
s s

LS St. 1 St. 2 St. 3 St. 4 LS St. 1 St. 2 St. 3 St. 4

7 8
k k
C C
s s
pi ω
λ

LS St. 1 St. 2 St. 3 St. 4 LS St. 1 St. 2 St. 3 St. 4

9 10
k k
C C
s s
re ω
λ

LS St. 1 St. 2 St. 3 St. 4 LS St. 1 St. 2 St. 3 St. 4

Fig. 13—Analysis of Data Sets 1 through 10. Fig. 12 can be used as a guide to understand this graph.

verified the validity of the transformations using a Monte-Carlo-based
threshold algorithm. We have shown that the probability distribu-
tions of transformed parameters usually exhibit normal distribu-
tion, a strong indication of being Cartesian.
For data transformations, we conducted nonlinear regression
on the wavelet transform of the pressure signal and obtained sig-
nificant performance improvement. We showed that the wavelet
transform is not only useful for data reduction and noise elimina-
tion but also is suitable for performance improvement. The per-
formance improvement through the wavelet transform is related
directly to the choice of the reduced wavelet basis. By appropriate
choice of the wavelets to be included in the reduced basis, we
achieved direct control over the nonlinear regression. We have
proposed a number of strategies to control the information con-
tained in the wavelet basis and have shown examples of how
these strategies can be used effectively. We have also discussed
the statistics of initial guesses and noise performance of the
wavelet-transform-based nonlinear regression. Finally, we com-
pared the performance of some of the wavelet-based strategies on
some 20 real- and synthetic-data sets.

710 September 2011 SPE Journal

 11 12
k k
C C
s s

LS St. 1 St. 2 St. 3 St. 4 LS St. 1 St. 2 St. 3 St. 4

13 14
k k
C C
s s

LS St. 1 St. 2 St. 3 St. 4 LS St. 1 St. 2 St. 3 St. 4

15 16
k k
C C
s s
ω
λ

LS St. 1 St. 2 St. 3 St. 4 LS St. 1 St. 2 St. 3 St. 4

17 18
k k
C C
s s
d
d
d
dw

LS St. 1 St. 2 St. 3 St. 4 LS St. 1 St. 2 St. 3 St. 4

19 20
k k
C C
s s
ω
λ

LS St. 1 St. 2 St. 3 St. 4 LS St. 1 St. 2 St. 3 St. 4

Fig. 14—Analysis of Data Sets 11 through 20. Fig. 12 can be used as a guide to understand this graph.

Our conclusions can be summarized as
• Regression using Cartesian variables yields a more quadratic-
like objective function, and the regression can be completed in
fewer iterations.
• Cartesian transformation increases the probability of conver-
gence substantially when a good starting guess is not available.
• Using Cartesian transformations is especially useful for detect-
ing ambiguous data sets with insufficient infinite-acting data.
Transformed analysis finds possible fits over a larger volume,
resulting in wide confidence intervals for ambiguous data (as
should be the case for uncertain problems).
• Wavelets provide appropriate reweighting of data and improve
the stability and performance of nonlinear regression.
• Wavelets provide automatic noise elimination and outlier
removal.
• A reduced wavelet basis provides effective reduction of data points
in the analysis without having to delete actual data points.
• The reduced wavelet basis should be selected on the basis
of wavelet amplitudes and sensitivity coefficients. Selection
on the basis of sensitivity coefficients (Strategy 4) allows for
decoupling the regression on the basis of parameters and, hence,
improves the performance.

September 2011 SPE Journal 711

• Representing the objective function in the reduced wavelet Daubechies, I. 1992. Ten Lectures on Wavelets, No. 61. Philadelphia, Penn-
basis provides improved stability by simplifying the objective sylvania: CBMS-NSF Regional Conference Series in Applied Math-
function when a good initial guess is not available. The study ematics, Society for Industrial and Applied Mathematics (SIAM).
of statistics of initial guesses reveals that the wavelet approach Fang, K.T. 1998. Theory and Applications of the Uniform Design, Experi-
is more robust against poor starting guesses. mental Design: Theory and Application. Presented at the Symposium
on Statistical Theory of Experimental Designs, Oberwolfach, Germany,
Nomenclature 14–15 November.
AW  wavelet basis matrix Gill, P.E., Murray, W., and Wright, M.H. 1981. Practical Optimization.
C  wellbore storage New York: Academic Press.
dcirc  distance to circular boundary Horne, R.N. 1995. Modern Well Test Analysis: A Computer Aided
Approach, second edition. Palo Alto, California: Petroway, Inc.
dE  distance to rectangular boundary in the east
Jaynes, E. T. 1968. Prior Probabilities. IEEE Trans. Systems Sci. Cybernet-
dN  distance to rectangular boundary in the north ics 4 (3): 227–241. doi: 10.1109/TSSC.1968.300117.
dS  distance to rectangular boundary in the south Jeffreys, H. 1939. Theory of Probability. Oxford, UK: Oxford University
dW  distance to rectangular boundary in the west Press.
E  objective function of regular least squares Jeffreys, H. 1957. Scientific Inference, second edition. Cambridge, UK:
EW  objective function of wavelet-transformed least squares Cambridge University Press.
k  permeability Kikani, J. and He, M. 1998. Multiresolution Analysis of Long-Term
np  number of estimation parameters Pressure Transient Data Using Wavelet Methods. Paper SPE 48966
p  pressure presented at the SPE Annual Technical Conference and Exhibition,
pi  initial pressure at t  0 New Orleans, 27–30 September. doi: 10.2118/48966-MS.
Lu, P. and Horne, R.N. 2000. A Multiresolution Approach to Reservoir
re  distance to reservoir boundary
Parameter Estimation Using Wavelet Analysis. Paper SPE 62985 pre-
s  skin factor sented at the SPE Annual Technical Conference and Exhibition, Dallas,
t  time 1–4 October. doi: 10.2118/62985-MS.
Wf  wavelet coefficients Mallat, S. 1999. A Wavelet Tour of Signal Processing, second edition. San
α  vector of model parameters Diego, California: Academic Press.
  transmissivity ratio
 standard deviation of homogeneous probability distribution
  porosity
  wavelet basis function
  storativity ratio
Acknowledgments
The authors are indebted to the late Albert Tarantola for his
extensive help and guidance in the first half of the paper related
to parameter transformations. The support of the members of the
Stanford University Petroleum Research Institute-D Consortium
on Innovation in Reservoir Testing is gratefully acknowledged.
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Aysegul Dastan is a petroleum engineer in the Dynamic
Reservoir Characterization Team at Chevron Energy Technology
Company in Houston. Her work experience and research areas
cover novel well-test interpretation methods, numerical optimi-
zation and parameter estimation techniques, and using analyt-
ical and numerical reservoir models for production data analy-
sis. Dastan holds MS and PhD degrees from Stanford University
and a BS degree from the Middle East Technical University,
Ankara, Turkey. Roland N. Horne is the Thomas Davies Barrow
Professor of Earth Sciences at Stanford University and was the
chairman of Petroleum Engineering from 1995 to 2006. He holds
BE, PhD, and DSc degrees from the University of Auckland,
New Zealand, all in engineering science. Horne has been an
SPE Distinguished Lecturer and has been awarded the SPE
Distinguished Achievement Award for Petroleum Engineering
Faculty, the Lester C. Uren Award, and the John Franklin Carl
Award. Horne is a member of the U.S. National Academy of
Engineering and is an SPE Honorary Member.
September 2011 SPE Journal