Enabling Geological Scale Dynamic Modelling of a Fractured Basement Reservoir using a high-Resolution Simulator - A UKCS Case Study - Dan Bonter ...
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Enabling Geological Scale Dynamic Modelling of a Fractured Basement Reservoir using a high- Resolution Simulator - A UKCS Case Study Dan Bonter Hurricane Energy
Disclaimer The information contained in this document (the Presentation) has been prepared by Hurricane Energy plc (the Company). This Presentation has not been approved by an authorised person in accordance with section 21 of the Financial Services and Markets Act 2000 and therefore it is being delivered for information purposes only. This Presentation may contain certain forward-looking statements with respect to the Company's expectations and plans, strategy, management’s objectives, future performance, production, costs, revenues, and other trend information. These statements and forecasts involve risk, uncertainties and assumptions about the Company, its assets, its subsidiaries and investments, including, among other things, the development of its business, trends in its operating industry, and future capital expenditures and acquisitions. In light of these risks, uncertainties and assumptions, the Company's actual results could differ materially from those included in this document or as otherwise discussed at the Presentation. The statements have been made with reference to forecast price changes, economic conditions and the current regulatory environment. Nothing in this Presentation should be construed as a profit forecast. Past share performance cannot be relied on as a guide to future performance. These forward-looking statements speak only as at the date of this Presentation. No representation or warranty, express or implied, is made or given by or on behalf of the Company, or Cenkos Securities plc (Cenkos) or any of their respective members, directors, officers or employees or any other person as to the accuracy, correctness, completeness or fairness of the information, including estimates, opinions, targets and other forward looking statements, contained in this Presentation and no reliance should be placed on it. Neither of the Company or Cenkos or any of their respective members, directors, officers or employees nor any other person accepts liability whatsoever for any loss howsoever arising from any use of this Presentation or its contents or otherwise arising in connection herewith, or undertakes to publicly update, review, correct any inaccuracies which may become apparent, or revise any forward-looking statement whether as a result of new information, future developments or otherwise. The Company is not under any obligation to update or keep current the information contained in this Presentation and any opinions expressed in it are subject to change without notice. Cenkos' responsibilities as the Companyʼs Nominated Adviser under the AIM Rules will be owed solely to London Stock Exchange plc and not to the Company, to any of its directors or to any other person in respect of a decision to subscribe for or acquire securities in the Company. The Company's ordinary shares have not be registered under the US Securities Act of 1933, as amended (the Securities Act) and may not be offered or sold in the United States absent registration or an exemption from the registration requirements of the Securities Act. No public offering of the ordinary shares is or will be made in the United States. In addition, the Company’s ordinary shares have not been and will not be registered under the applicable laws of Australia, Canada, Japan and South Africa and, subject to certain exceptions, may not be offered or sold within Australia, Canada, Japan or South Africa or to any national, resident or citizen of Australia, Canada, Japan or South Africa. Hurricane | Devex 2015 | 21 May 2015 2
Acknowledgements • All recent simulation work in INTERSECT has been performed in collaboration with Schlumberger • Results presented by Hurricane have been replicated and approved by Schlumberger, and detailed by them in an independent report • Thanks to: - Rodolfo Carvajal, Leigh Truelove, Alan Thompson & Horacio Del Campillo, Schlumberger (Software Integrated Solutions) Hurricane | Devex 2015 | May 2015 3
Abstract ‘New Kids on the Block’ theme, using new ideas and new technology to help unlock developments Lancaster is a substantial (207 MMboe 2C) fractured basement field West of Shetland. As a Type 1 Naturally Fractured Reservoir, hydrocarbon potential is provided entirely by the fracture network. This network is a product of initial cooling joints and subsequent tectonic events occurring throughout the 2.5 billion year history of this Precambrian rock. This has generated an exceptionally well connected fracture network, further enhanced by fluid flow, producing a potentially world class hydrocarbon reservoir. Two reservoir facies are identified: (1) Fault Zones, seismically resolvable features with generally enhanced aperture fractures and increased porosity/permeability; and (2) Fractured Basement, pervasively fractured background host rock providing flow and interconnectivity between Fault Zones. The strong permeability contrasts present cause Conventional Reservoir Simulators (CRS) to struggle solving and converging simulations. Fine scale gridding is also required to accurately depict the fault and fracture network. Previous Lancaster CRS simulation performance was poor, requiring coarsening to complete the runs in practical timeframes. This paper describes the implementation of a High-Resolution Simulator (HRS) to build a dynamic model of Lancaster by matching data acquired in the highly successful 2014 Lancaster Horizontal well test using fine-scale (75-million cells) in the model. This has already proved invaluable in forecasting production, assessing the impact of uncertainties, and improving technical confidence in the dynamic reservoir properties while preserving practical runtimes of a few hours using a 16-core workstation. This represents a step change in Hurricane’s evaluation of its basement assets, further de-risking and unlocking the fractured basement play for the UKCS. Hurricane | Devex 2015 | May 2015 4
Hurricane • Founded by Dr. Robert Trice in 2004 to explore the UKCS Fractured Basement Play Clair • Currently holds 100% of 3 licences West of Foinaven Schiehallion Shetland Whirlwind Lancaster Shetland • Two large Fractured Typhoon Lincoln Basement discoveries: Strathmore - Lancaster – 207 MMboe 2C * - Whirlwind – 205 MMboe 2C * 0 10 20 30 40 50 km * Hurricane CPR, RPS 2013 Hurricane | Devex 2015 | May 2015 6
What is Fractured Basement? • Crystalline rock exhibiting fractures associated with cooling, tectonic activity, epithermal and hydrothermal processes • Often associated with buried hills or uplifted ridges Fractured basement hill, West of Scotland Hurricane | Devex 2015 | May 2015 7
What is Fractured Basement? Matrix Matrix porosity permeability Low High Low High Type Type 1I Recovery dominated by fracture Type II network Type III Recovery dominated by Type IV rock properties Definitions of Naturally Fractured Reservoirs, after Nelson 2001 • Basement is a Type 1 Naturally Fractured Reservoir • Oil storage and mobility entirely depends on the fracture network Hurricane | Devex 2015 | May 2015 8
Why Target Fractured Basement? Vietnam Global basement activity • Basement works around the world Yemen Venezuela Hurricane | Devex 2015 | May 2015 9
Lancaster • Uplifted basement ridge Judd • Crest ~1km TVDss High • Water depth ~150m • Juxtaposed source rock 0 10 20 30 40 50 km • Prolific kitchen to the north, additional kitchen to the south Hurricane | Devex 2015 | May 2015 11
0 5 - -1 0 - 60 -1 -14 -150 0 00 00 -1700 -14 -14 00 00 -19 Lancaster 00 00 00 -20 4 00 -1 3 2 -1 -1 0 0 -17 -12 0 00 Development well 0 8 -1 -1600 205/21a-6 00 -11 Exploration well 205/21a-4 00 -15 -12 0 0 Appraisal well -16 -1300 205/21a-4z -1400 00 6 00 -1 Shell well -1300 205/21-1a 0 0.5 1 1.5 2km 00 Top hole location Top basement penetration -15 -150 0 • Originally drilled by Shell in 1974 -1400 -1600 • Hurricane have appraised with three wells since 2009, demonstrating: 00 -15 00 - Oil below mapped structural closure 4 00 -1 -16 -1700 - Seismically-interpreted fault network is confirmed by well penetrations 00 -1800 00 -17 -19 0 Hurricane | Devex 2015 | May 2015 -150 -1 12 6 00 -17 0
Lithology Tonalite (2.3-2.4 Ba) • Plutonic rock, quartz rich granite • 80-95% of GRV based on well data Dolerite (2.3 Ba) • Dark plutonic rock, likely part of initial Fractures define reservoir melt rather than later intrusion properties, not rock type • 5-20% of GRV based on well data Hurricane | Devex 2015 | May 2015 13
Conceptual Model Regional joints High frequency regional joint set with preferred NE-SW Shear fractures Seismic and sub- orientation and high seismic faults permeability, crossing displaying clear Fault Zones and shear offset Fractured Basement 50m Fault Zones Represent areas of damaged Variable-orientation, Fractured Basement Cross joints rock, associated with seismically- permeable cross joints The intervening host rock resolvable faults, that include contribute to flow between Fault Zones is more large aperture fractures within Fault Zones and pervasively fractured and and therefore improved Fractured Basement and contributes to flow reservoir characteristics provide additional lateral connectivity Hurricane | Devex 2015 | May 2015 14
Modelling Challenges • Confident identification of the fractures that are contributing to fluid flow (hydrodynamic fractures) • Accurate characterisation of the hydrodynamic fracture network • Fine gridding to capture heterogeneity of the hydrodynamic fracture network • Practical methodology to accommodate high contrasts in poroperm and allow for anisotropy within a continuum model • Computer and software power to simulate a full field reservoir model which needs to accommodate over 450 faults as permeability “high ways” Hurricane | Devex 2015 | May 2015 15
Static Modelling Hurricane | Devex 2015 | May 2015 16
Automated techniques Seismic Fault Interpretation Manual fault interpretation • Fault modelling is key to understanding major fluid flow pathways Comparisons with Hurricane | Devex 2015 | May 2015 analogue outcrop locations 17
-1800 -1-824 -2 -1800 -1-824 -2 -2 - 000 5 00 5 40 25 0 00 -26000 00 -26000 00 -2200 -2200 -2200 0 -1 -1 00 -2000 2 50 -2100 700 -2000 -2100 70 0 -2000 -2100 -23 - -2400 -2400 -23 -23 -23 Lancaster Fault Map Evolution 0 40 -1900 00 -1900 0 0 -1900 00 0 -2 -2200 -23 -2200 20 00 -2 -1600 -1600 -1600 -21 -1 -21 -1 100 00 -180 -2000 00 800 -2000 00 800 -2 -22 0 00 -1800 9 -1 -1 -1 -1 0 7 0 7 0 70 0 60 00 -170 -1 40 2009 pre-drill 00 00 -1 40 2010 post-drill 00 00 1 40 2014 post-CPR 000 -1 -21 -1 5 -1 5 -1900 - -2-1090 0 0 0 60 -1 -1800 -1800 -14 -14 -14 -150 -150 -150 0 0 0 00 00 00 00 00 00 -1700 -1700 -14 -14 -14 -14 14 -17- 00 -14 -1700 00 00 0 -1600 0 -1600 0 5 -1 -19 0 0 0 -1 -1 000 00 0 0 0 40 40 40 -14 0 00 00 00 00 00 30 -2 -1 -1 -1 3 3 2 2 2 -1 -1 -1 -1 -16 -1 0 0 -1500 00 -1500 0 -12 -130 -17 -12 -12 0 0 00 00 0 -1400 -1400 80 -1 00 -1600 -1600 3 -2 -1 -1 3 3 -1200 -1200 00 00 00 00 00 -11 -11 -11 0 0 30 30 -1 -14 0 -1 0 00 00 -15 -15 00 -12 -12 -15 -12 -2100 0 0 00 0 0 -16 -16 -1300 -1300 -1300 -1400 00 00 -1400 -1600 6 00 -1 -1300 -1300 -1300 00 00 -19 -16 -16 00 0 0 0 0.25 0.5 0.75 1km 0 -140 0.25 0.5 0.75 1km 0 -140 0.5 0.25 0.75 1km -20 -1700 0 0 0 0 00 0 0 -17 -15 -15 -1800 00 00 -15 -15 -150 -150 0 0 • New seismic techniques and increased well control have 00 -1400 -1400 -1400 -18 -1600 -1600 0 -1600 0 60 60 00 0 -1 0 -1 allowed fault map to be continually improved 0 0 -15 -15 -15 0 0 40 40 0 0 0 0 0 0 -1 -1 -16 -16 -16 -1700 -1700 -1700 0 0 -170 -170 Hurricane | Devex 2015 | May 2015 -1800 -1800 -1800 18 00 00 00 00 00 00
Fault Ties to Wells • Good tie between seismic interpretation at top basement with well-interpreted fault zones 205/21a-4 205/21a-4z • Indicates faults are vertical or near- vertical • Accurate prediction for future well placement Hurricane | Devex 2015 | May 2015 19
The Lancaster Static Model 1. Fault model (vertical faults) 2. Distance from fault property 3. Base Case facies model (40m wide fault zones) Hurricane | Devex 2015 | May 2015 20
Dynamic Modelling Hurricane | Devex 2015 | May 2015 21
Historical DFN DFN incorporating Fault Zones and regional Modelling joints • Discrete Fracture Network (DFN) modelling is designed to model the behaviour of individual fractures • A successful match to the 205/21a-4z PLT was achieved Pressure snapshot • However, DFN models are not designed for production forecasting Hurricane | Devex 2015 | May 2015 PLT derivative match 22
Historical Sector Modelling • 4km x 4km sector model constructed to run in ECLIPSE • Testing scenarios from 2013 Competent Persons Report • Reasonable results achieved, but: - Long run times - Requirement to coarsen grid - Boundary edge effects Hurricane | Devex 2015 | May 2015 23
High-Resolution Simulator • Dynamic modelling efforts provided valuable insight into properties of the field, indicating: - Highly connected hydrodynamic fracture network - Likelihood of supportive aquifer - Support for oil outside structural closure • However, neither the sector or DFN model are suitable tools for full field simulation • Therefore, a new solution was required that would allow practical simulation of the Lancaster Field • INTERSECT, by Schlumberger, was selected for testing Hurricane | Devex 2015 | May 2015 24
Eclipse vs. Intersect Sector Elapsed Time 70 60 50 Improved Run Time Elapsed Time, hours 40 30 20 • On a comparable dual core machine, 10 INTERSECT improves run time of Intersect 3 hours sector model from 65 to 3 hours 0 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 Intersect Sector Elapsed Time 3 2.5 • INTERSECT allows better 2 Elapsed Time, hours scalability with more processor cores 1.5 • 16 core desktop workstation 1 runs sector model in 20 minutes (no change to results) 0.5 0 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 Hurricane | Devex 2015 | May 2015 25
Benefits of INTERSECT • High resolution model - Fine scale to model geological complexity of fracture network - No need to unrealistically upscale • Unstructured grid - Enables more complex fault / fracture patterns to be modelled • Faster run times - Allows many more simulation cases to be run in a realistic timeframe - Uncertainty analysis on many factors to increase confidence in range of outcomes - Opportunity for full field simulation rather than limited sector model Hurricane | Devex 2015 | May 2015 26
Dynamic Modelling Process Historic DFN and sector modelling INTERSECT sector model test runs vs. ECLIPSE First pass full field scenario modelling Further uncertainty analysis New dynamic Full field reservoir data development (205/21a-6) planning Hurricane | Devex 2015 | May 2015 27
205/21a-6 – 2014 horizontal well results Hurricane | Devex 2015 | May 2015 28
205/21a-6 – 2014 horizontal well 205/21a-4Z 205/21a-6 205/21a-4 205/21-1A mTVDss 1000 Structural closure 1200 Hurricane block boundary 1,380m TVDss 1400 1,597m TVDss - 1600 1,781m TVDss 1800 2000 • In 2014, Hurricane drilled the first 1km horizontal well targeting fractured basement on the UKCS • This highly successful well confirmed commercial rates from the basement • Provided new dynamic data for simulation modelling Hurricane | Devex 2015 | May 2015 29
205/21a-6 – a high quality dynamic dataset • Max stabilised flow 205/21a-6 Well Test Overview Oil Production (STB/d) Water Production (STB/d) Downhole pressure (psig) rates: 10000 1920 - 5,300 bopd (natural) 9000 1910 - 9,800 bopd (ESP) 8000 1900 - Both constrained by 7000 1890 surface equipment • No formation water Liquid Production Rate (STB/d) 6000 1880 Pressure (psig) 5000 1870 encountered 4000 1860 • World class P.I. 3000 1850 - 160 stb/d/psi 2000 1840 • Minimal skin 1000 1830 • Excellent quality 0 16/06/14 10:00:00 17/06/14 10:00:00 18/06/14 10:00:00 19/06/14 10:00:00 20/06/14 10:00:00 21/06/14 10:00:00 22/06/14 10:00:00 1820 23/06/14 10:00:00 dynamic dataset Hurricane | Devex 2015 | May 2015 30
Simulation Model • Currently simulating single well in full field model • Ability to increase to simulation of full development plan Hurricane | Devex 2015 | May 2015 31
First Pass Simulation Well Test Match • Excellent well test match achieved with a range of scenarios • No barriers observed • Extremely well connected system Hurricane | Devex 2015 | May 2015 32
Implications from First Pass Simulation Results • Plateau response, no immediate decline • Does not require 2km horizontal well to achieve commercial rates • Potential for reduced well count in Full Field development Hurricane | Devex 2015 | May 2015 33
Conclusions • Acquiring a high quality dynamic dataset from the 2014 horizontal well has improved Hurricane’s understanding of the behaviour of the fractured basement reservoir • Utilising an innovative high-resolution simulator (INTERSECT) has been key to modelling this challenging reservoir • This work represents a step-change in Hurricane’s ability to continue unlocking value in this emerging play of the UKCS • Work is ongoing to feed into Full Field development planning - Presentation this afternoon by Neil Platt, COO, on hub development concepts Hurricane | Devex 2015 | May 2015 34
Questions & Answers Hurricane | Devex 2015 | May 2015 35
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