Type Curves Part 4: Calendar Day vs. Producing Day

December 14, 2015 by

Editor’s Note: While VISAGE rebranded to VERDAZO in April 2016, we haven’t changed the VISAGE name in our previous blog posts. We’re proud of our decade of work as VISAGE and that lives on within these blogs. Enjoy.

This will be the last blog of 2015, so I’ll take this opportunity to say thank you for reading, happy holidays and best wishes for a happy, healthy and successful new year! I’ll continue this series in 2016.

Type Curves that use Calendar Day production rates can yield very different results than Producing Day production rates. Each approach has its own strengths and weaknesses. Understanding how best to leverage their strengths and be cautious of the dangers is an important part of creating and using type curves. You can also combine the two to get valuable insights about the operational efficiency of a collection of wells.

Calendar Day Rate = (monthly volume) / (days in month)

The strength of using Calendar Day (CD) rates is that they are inherently representative of operational reality (i.e. what actually happened). Thus they are well suited for comparing the operational performance of companies, vintages, technologies etc. The weakness is that if there is significant downtime the shape of the type curve may not reflect the expected decline behaviour.

Producing Day Rate = (monthly volume) / (hours producing in the month) * 24

The strength of using Producing Day (PD) rates is that they may more accurately reflect production decline behaviour when significant downtime occurs. However, there are several dangers to be aware of when using PD rates in type curves:

  1. PD rates inflate every production month’s value (which has downtime) and can overestimate the Estimated Ultimate Recoverable (EUR) potential of a well. The degree to which the EUR could be inflated is often proportional to the amount of downtime. For example, if the first month has significant downtime, the inflated PD rate reflects a significant volume that was not produced. If that volume were produced it would have an impact on what the rate would be in the second month (i.e. you would expect it to be lower).
  2. Flush production on gas wells after extended downtime (e.g. plant turnaround) can cause significant PD rate spikes.
  3. PD rates rely on accurate reporting of producing hours. Incorrect hours can cause anomalous data spikes.

The following chart illustrates the strengths and weaknesses of using CD and PD rates in type curves.

4-Calendar-Day-vs-Producing

Measuring Operational Efficiency Using CD and PD Rates

The delta between the PD rate and CD rate is a reasonable estimate of the production that was not achieved due to downtime. We refer to this as Lost Production and discuss it in more detail in the blog Lost Production in VISAGE: Not All Downtime is Created Equal. One of the special adjustments we make when using public data that helps us avoid anomalous data spikes in our Lost Production calculations is to exclude any PD rates that exceed a well’s CD peak rate. Using Lost Production you can derive a measure of operational efficiency that could be a useful insight to adjust “Idealized” type-well curves … this topic will be covered in early 2016.

The following chart shows the estimated Lost Production due to downtime for an Operator, the Percent of Time Producing each month and the Estimated Cumulative Lost Revenue associated with the downtime. The second chart quantifies the Operational Efficiency of those same wells (i.e. approximately 82.8% of potential production was achieved in the date range).

4-Estimated-Lost-Production

4-Operational-Efficiency

That concludes part 4 of this series. The remaining topics that you can look forward to include:

  • Condensing Time
  • Operational/Downtime Factors on Idealized Curves
  • Survivor Bias
  • Truncation Using Sample Size Cut-off
  • Forecast the Average vs Average the Forecasts
  • Representing Uncertainty
  • Auto-forecast Tools

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Production data: IHS Information Hub

Analysis: VISAGE

Thanks for reading. We welcome your questions and suggestions for future blogs.

Some other blogs you may find of interest:

Analysis: VISAGE

About VISAGE – visual analytics for the petroleum industry VISAGE analytics software equips operators and analysts in the petroleum industry to make the most valuable and timely decisions possible. VISAGE brings together public and proprietary oil and gas data from multiple sources for easy to use interactive analysis.