In order for operators to grow production and maintain profit margins in unconventional-resource plays, a “well-factory” or “manufacturing-based” style of development is often used. This paper will analyze differing well-factory approaches to unconventional assets, with examples from the Wolfcamp unconventional oil play in the Permian Basin. An emphasis is placed on using a well-factory model that enables flexibility for project-execution teams to optimize, while maintaining the efficiency and execution speeds that a classical factory model provides.
With the relatively recent boom in unconventional-resource plays, the concept of manufacturing has been widely proposed and applied to the upstream industry. Many companies across the globe have adopted well-factory models and a manufacturing-based approach in developing large-acreage positions in unconventional plays. A common theme across industry literature is the claim that a manufacturing approach to unconventional-resource development leads to greater efficiencies with regard to drill days and well costs. These improvements are largely attributed to supply-chain and contract optimization, logistical efficiencies, and materials management. A common theme in literature devoted to the well-factory approach, however, is the lack of discussion concerning well recoveries and maximizing reserves. By focusing only on costs and cycle times, decisions are quickly made that can affect the ultimate recovery of wells and therefore diminish overall economic return from the wells. A one-size-fits-all approach with standardized designs and strict work processes can lead to suboptimal economic development plans and erode the value of oil projects.
A Flexible “Well-Factory” Approach to Developing Unconventionals
15 June 2016