SPE-169013-MS

How Reliable Is Production Data Analysis?

D.M. Anderson and J.M. Thompson, IHS

Copyright 2014, Society of Petroleum Engineers

This paper was prepared for presentation at the Unconventional Resources Conference-USA held in The Woodlands, TX, USA, 1–3 April 2014.

This paper was selected for presentation by a SPE program committee following review of information contained in an abstract submitted by the author(s). Contents of the paper have not been
reviewed by the Society of Petroleum Engineers and are subject to correction by the author(s). The material does not necessarily reflect any position of the Society of Petroleum Engineers, its
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Abstract
It is well known that the analysis of production data (Rate Transient Analysis) involves the solution of an inverse problem.
We measure the response of the system, typically production rates and flowing pressures, and then proceed to search for the
appropriate reservoir model description that created it. Typically, this is accomplished through the minimization of an
objective function consisting of the difference between the simulated response and the actual response. In practice,
production analysis is complicated by two important problems: 1) The mathematical models (analytical or numerical) that we
use to describe well production may not provide an adequate and full description of the true well-completion-reservoir
system. This is especially true if the system is complex and asymmetric, as is the case in unconventional plays. And 2) The
production response almost certainly contains significant errors and/or disturbances caused by outside influences. This makes
the process of error minimization difficult and non-unique. As a result, it is impossible to know whether or not we are
obtaining reliable results from production analysis, as there are simply too many unknown variables in the system we are
trying to model.

The objective of this work is to determine the best procedure for solving the inverse problem of production analysis in a
consistent and reliable way, and to quantify just how reliable the results are. We wish to do this in an environment free of
complications, such as those identified previously in 1) and 2). To accomplish this, simulated production responses from
known models are analyzed, but the full set of model input parameters are withheld; only basic input parameters are
provided, such as what would typically be available in practice. Since the “answer key” is available, this study allows us to
objectively evaluate and optimize production data analysis best practices.

Introduction
Oil and gas producing companies have a critical need for an accurate physical description of reservoir and completion
characteristics, because it enables them to make better decisions regarding field development, production optimization and
reserves evaluation. Well performance data can provide valuable insight into the dynamic characteristics of the reservoir.
However, that insight usually comes in the form of bulk characteristics, which are major simplifications of the systems they
represent. Further resolution of the reservoir’s bulk characteristics into explicit physical characteristics is challenging because
it involves the solution of an inverse problem, and is therefore not deterministic. Solutions are usually found through
minimization of an objective function consisting of the difference between the actual system response (production data) and
the simulated data from the model. This approach assumes that a unique solution exists within the domain of investigation
and that it can be found. There two important problems with this assumption when we are dealing with real production data:
1) We may never be sure if we have chosen a domain of investigation (reservoir model) that encapsulates the true
solution. Does our reservoir model contain all of the important characteristics and physics of the system we are trying
to model? Have we made reasonable simplifications? Have we specified suitable model constraints?
2) Real production data contains noise resulting from outside disturbances and measurement errors. The presence of this
noise may make it difficult to use minimization techniques and regress to a unique solution.
In consideration of these issues, how can we ensure that our analysis of production data is reliable? In this work, we will use
simulated production data, generated from theoretical models. This removes the uncertainty of model suitability as described
in (1), and also ensures that the production data is smooth and noise free (2). The technical challenge of choosing a suitable
model, when analyzing well performance data, is separate and will not be treated in this work. This work will deal solely with
finding a practical and efficient methodology for extracting the best (or close to the best) solution where the form of the
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model is known, but most of the specific reservoir parameters are not. Here, we conduct a simple blind study, where the
analyst is provided with production data and flowing pressures, as well as basic input properties such as initial pressure, rock
and fluid properties and completion details. The specific reservoir properties are withheld. These include: permeability,
drainage area, stimulated reservoir volume, fracture dimensions, spacing and conductivity. The analyst’s job is to use a
systematic approach, based on RTA fundamentals and current best practices for production analysis, to obtain a reliable
interpretation of the production data. The reliability is evaluated based on two criteria:
1) How accurately does the interpreted model predict future well performance and EUR?
2) How accurate are the predicted reservoir characteristics (e.g. permeability, fracture half-length, fracture height,
dimensionless fracture conductivity, fracture spacing and drainage area)?
These reliability criteria need not both be satisfied in order for the methodology to be considered useful. For example, a
method that can predict future performance and EUR with reasonable reliability, but has incorrect reservoir parameters may
still be useful for production forecasting and reserves purposes. Similarly, a method that can reliably estimate stimulation
effectiveness, but not long-term recovery is still useful for helping engineers make better decisions regarding well spacing
and completion design.

Experimental Procedure
In the blind study, production and flowing pressures are simulated using the Enhanced Fracture Region analytical model,
introduced by Stalgorova and Mattar (2012). This model is thought to provide a reasonable physical representation of fluid
flow into multiple transverse fractures, surrounded by limited regions of enhanced permeability, within a much larger low-
permeability reservoir. A schematic of the model is shown in Figure 1. The production data is generated under a defined
constant pressure constraint with basic well, completion, rock and fluid properties provided, such as what would be
commonly available to an analyst in the field. One data set has been generated for this experiment. The description of the
case study, its analysis and the results are presented below.

Figure 1 ― Enhanced Fracture Region Model (Stalgorova and Mattar 2012).

Case Study
The following synthetic case is a dry gas well with one year of production history (Figure 2). Initial production is restricted
to 8 MMscfd, followed by constant pressure rate decline. The upper and lower limits of reservoir and fluid properties are
provided in Table 1, to simulate the uncertainty that would exist in a real production analysis study.

Table 1 ― Reservoir and Fluid Properties.

SPE-169013-MS 3

9 . 103 3800
Legend 3500
6 Op Gas Rate
Run Depth Pressure 3000
4

Run Depth Pressure (psi(a))

Op Gas Rate (Mscfd)

3 2500

2
2000

1500
103

1000
6
500
4

3 . 102 0
12 01 02 03 04 05 06 07 08 09 10 11

2013 2014

Figure 2 ― Production and Flowing Pressure Data.

As indicated in Table 1, there is some uncertainty in volumetric parameters (h, , sg) and major uncertainty in completion
characteristics (xf, nf) and reservoir drainage width (Ye). The low and high values for nf are based on number of stages and
total number of perforation clusters, respectively. The limits for Ye are based on minimum and maximum anticipated well
spacing. This level of uncertainty would be typical of a real production case.

Simple Yet Rigorous Approach

For the initial interpretation and reservoir characterization, the analyst used the Simple Yet Rigorous Approach proposed by
Nobakht et al. (2010) and Anderson et al. (2010). This approach requires defined input values for pi , Le, h, , sg, and nf. For
parameters with low and high limits, the average value was used. The approach relies on the identification of the early
transient linear flow regime as well as the time of transition to boundary or apparent boundary dominated flow (telf). Transient
linear flow is characterized by a straight line on the superposition time plot (Figure 3a) and a half-slope on the log-log
derivative plot (Figure 3b). Note that the time function used on these plots is material balance time (tc), as recommended by
Liang et al. (2011). The transition time (telf) is illustrated by the dashed vertical green lines.

(a) (b)
Figure 3 ― Production Analysis: (a) Linear Flow Specialized Plot, (b) Log-Log Plot

The position of the telf line, as well as the preceding linear flow straight-line, are based on the analyst’s interpretation (a
different analyst may provide a slightly different interpretation of the data). Calculation of bulk parameters A√ , FCD, and
SRV follow directly from the interpretation of the linear flow straight-line and telf. Calculation of kSRV (i.e. k1) and xf require
the further assumption of equally spaced, uniform transverse fractures along the full lateral length of the well. The ‘b-value’
is interpreted by the analyst as the best hyperbolic decline fit of all the data beyond telf. The results of the analysis appear in
Table 2.

Table 2 ― Simple Yet Rigorous Approach Results.

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One important thing to note is that there is clear evidence of contribution from beyond the SRV- the cumulative gas produced
exceeds the SRV. Furthermore, the interpreted b-value (1.35) exceeds the maximum value (1.0) for boundary dominated
flow, indicating pressure support from the matrix rock beyond the SRV.

Deterministic Analytical Modeling

To validate the interpretation, fine-tune the parameters, and estimate km (i.e. k2), analytical model matching is used. Note that
the zone beyond the stimulated volume (k2) is not considered in the Simple Yet Rigorous Approach. Once calibrated, the
analytical model is used to generate a forecast and estimate EUR. The analyst provided two model-based forecasts: one
assuming minimum well spacing and one assuming maximum well spacing. The model input parameters and results are
presented in Table 3, where they are compared to the results from the Simple Yet Rigorous Approach. The history match is
shown in Figure 4 and production forecasts in Figure 5.

Table 3 ― Comparison of Deterministic Model Results with Simple Yet Rigorous Approach.

5000
25
4000
20
3000
Cal. Rate (MMscfd)

Pressure (psi(a))

15 2000

1000
10
0

5 -1000

-2000
0
2013 2014

Figure 4 ― Deterministic Analytical Model History Match.

Figure 5 ― Deterministic Analytical Model Forecasts.

The results of this analysis would suggest that there is fairly good confidence in xf, FC D, kSRV, SRV and EUR. It would also
suggest that EUR is not highly sensitive to the unknown total drainage volume. The greatest uncertainty is in recovery factor,
due to the unknown total drainage volume.

Probabilistic Analytical Modeling-

A probabilistic approach to well performance modeling was described by Anderson et al. (2012). This approach recognizes
that deterministic models may be non-unique and uses Monte Carlo simulation to generate multiple model history matches
(and associated forecasts) within a pre-defined parameter space. In this study, the analyst used a probabilistic approach, with
SPE-169013-MS 5

the Enhanced Fracture Region (EFR) model as the base model. The input parameters for the probabilistic approach are listed
in Table 4.

Table 4 ― Probabilistic Modeling Input Parameters.

One of the advantages with this approach is that it addresses the uncertainty in multiple input parameters simultaneously,
through random sampling. Whereas the deterministic model required single value inputs for h, nf, sg and , the probabilistic
approach investigates solutions within the full uncertainty range for each of these parameters. When assigning uncertainty to
each input parameter, the analyst had three options: assign a distribution (uniform or triangular), hold the parameter constant,
or allow the parameter to be calculated based on other input. Table 4 presents those decisions. Parameters with uniform
distributions are sampled randomly between prescribed lower and upper limits. Parameters with triangular distributions also
have lower and upper limits, but the sampling is weighted towards a best estimate that lies in between (i.e. the mode).
Calculated parameters are used for regression in each run, to minimize the total error between the simulated response and the
actual data.

Prior to running the probabilistic model, an error limitation is specified to ensure that only models that generate acceptable
history matches (below the specified error limit) are retained in the result set. In this study, the analyst ran 10,000 cases,
resulting in approximately a 30% success rate (3000 successful runs). The results of the probabilistic approach are in the form
of distributions. These distributions are shown in Figure 6. The results are summarized at specific probability values- P90,
P50 and P10, in Table 5.

Figure 6 ― Distributions of Model Parameters from Probabilistic Approach.

6 SPE-169013-MS

Table 5 ― Probabilistic Modeling Results.

Results and Discussion

The table below shows the analyst’s results, based on the deterministic and probabilistic approaches, compared with the
answer key.

Table 6 ― Comparison of Results from Deterministic and Probabilistic Approaches with Answer Key.

Values with an asterisk (*) indicate where the actual value of the parameter occurred outside of the 80% confidence interval (P90-P10 range) specified by the Probabilistic
Approach, or where there is greater than 100% absolute error in the Deterministic Approach.

From the comparison, it is clear that the analyst’s interpretation (both Deterministic and Probabilistic) yields some major
systemic errors. Both approaches are inaccurate at predicting A√ . This is not a major surprise as there is no clear straight-
line behavior evident from Figure 3a. Interestingly, the probabilistic approach suggested that there was a 90% probability
that the A√ exceeds 71852, suggesting that the full parameter space for this value was not properly investigated. FCD and
kSRV are also incorrect by a significant margin in both approaches.
The error in km and xf from the Deterministic Approach is very large. km is over-predicted and xf is under-predicted. In
fact, this will ALWAYS be the case when using the Simple yet Rigorous Method. Figure 7, which shows the correct
interpretation (answer key), illustrates this.

Figure 7 ― Interpretation of Data Compared to Answer Key.

As the figure shows, the “true telf” appears to occur far beyond the transition time that the data would suggest. The reason for
this is that the source model has a region of high permeability surrounding each fracture (kSRV), with a lower permeability
zone contributing to production from the outside (km). The visible transition observed in the data is that of kSRV to km - not
fracture interference. The transition indicating the end of early linear flow (fracture interference) is not interpretable from the
plot! Thus, the Simple yet Rigorous Approach always understates xf and overstates km. Only in cases where kSRV and km are
SPE-169013-MS 7

similar will this approach yield reliable estimates of km and xf. In contrast, the Probabilistic Approach yields reasonable
estimates for km and xf. This is because it incorporates many random combinations of kSRV, km and xf (along with other
parameters), all of which satisfy the maximum error tolerance for the history match. It does not depend on a deterministic
identification of telf. It should be noted that near perfect accuracy of xf would not normally be expected, and is likely a result
of the true value being almost precisely the mean of the minimum and maximum limits.
Interestingly, the analyst’s interpretation is very accurate for Stimulated Reservoir Volume (SRV). This is also not a major
surprise. Although the Deterministic Approach is not well-equipped to reliably predict the distribution of stimulated volume,
it is very reliable in estimating the magnitude of that volume. Again, this relates to the transition time indicated by the data on
the Superposition Plot (Figure 3a). That transition time yields a unique volume, even though the specific values of h, xf, nf,
and xi may be significantly wrong.
Figure 8 shows a comparison of the forecasts from the Deterministic and Probabilistic Approaches with the actual
forecast (answer key). The comparison of EURs suggests that production analysis is very reliable in predicting recovery with
limited data. However, since there is no signal in the data for total drainage volume (the boundaries are still decades from
being observed), the recovery factor is uncertain in both the Deterministic and Probabilistic Approaches. Its uncertainty is
directly related to the uncertainty in volumetrics and well spacing.

Figure 8 ― Comparison of Forecasts.

Conclusions

1. Production data is difficult to analyze due to the vast amount of variables and assumptions required. Non-uniqueness
and uncertainty are major concerns when trying to obtain usable results from production data analysis
2. To investigate the best procedure for obtaining reliable results, a blind experiment was conducted whereby the
requirement for critical assumptions has been removed- namely, the form of the model that created the data and
outside disturbances / measurement noise. The simulated data were generated using the Enhanced Fracture Region
(EFR) analytical model.
3. The analyst used deterministic and probabilistic techniques to interpret the data, estimate reservoir properties and
forecast production and recovery.
4. The deterministic approach, based on the Simple Yet Rigorous method, cannot accurately predict permeability and
fracture length. This approach will systematically understate fracture length and overstate permeability.
5. The probabilistic approach provides more realistic estimates of matrix permeability and fracture length. However,
other parameters such as FC D and kSRV are in significant error.
6. Both deterministic and probabilistic approaches provide surprisingly accurate production forecasts and EUR,
indicating that there is low sensitivity of EUR to total drainage volume, beyond some minimum value. This is an
expected result for ultra-low permeability systems.
7. Both approaches can be valuable if their results are used appropriately. If production forecast and recovery is the
sole requirement of the analysis, the deterministic approach is sufficient, but must be anchored to an assumed
drainage volume.
a. The deterministic approach, on its own, is NOT suitable for estimating physical reservoir properties, such
as fracture length and permeability.
b. The probabilistic approach provides resulting reservoir parameters at specified probabilities. Some of these
appear to be reliable (such as permeability and fracture length), while others (such as fracture conductivity
and SRV permeability) still contain systematic error.
8 SPE-169013-MS

Nomenclature
A√k = Bulk linear flow parameter from specialized plot, ft2md0.5
cf = Formation compressibility, psi-1
ct = Total compressibility, psi-1
FCD = Fracture conductivity, dimensionless
h = Net pay thickness, ft
k = Permeability, μd
km , k2 = Matrix permeability outside stimulated reservoir volume, μd
kSRV , k1 = Permeability within stimulated reservoir volume, μd
Le = Effective horizontal well length, ft
nf = Number of fractures
pi = Initial reservoir pressure, psi
pwf = Bottom-hole flowing pressure, psi
q = Gas rate, Mscf/d
t = Time, days
tc = Material Balance Time, days
telf = End of transient linear flow, days
SRV = Stimulated Reservoir Volume, bcf (gas)
TR = Reservoir temperature, degrees Fahrenheit
xf = Fracture half-length, ft
Xe = Reservoir drainage length, ft
xf = Fracture half-length, ft
Ye = Reservoir drainage width, ft
yinv = Region of investigation, ft

Greek Symbols
φ = Porosity, %

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