Page 87 - A Practical Companion to Reservoir Stimulation

DESIGN AND MODELING OF PROPPED FRACTURES

EXAMPLE E-15 EXAMPLE E-16

Reservoir Permeability and Discount Rate Impact on NPV
Proppant-Pack Permeability Damage ~~~ ~ ~~~ ~ ~ ~
Calculate the effect of three discount rates (15%, 50% and
Using the data in Table E-6 and for the three permeabilities 100%) on the optimum fracture half-length.
(k = 0.01, 0.1 and I md), determine the effect on the I-yr
optimum NPV for proppant-pack permeability damage equal Solution (Ref. Sections 8-3 and 8-4)
to 50%, 70% and 90% (i.e., 50%, 30% and 10% retained). Figure E- 14 is a graph of the 1 -yr NPV vs. fracture half-length
for the three discount rates. As should be expected, a higher
Solution (Ref. Sections 8-3 and 8-4) discount rate results in a lower optimum half-length. For the
Two proppants were used: 20140 sand and 20140 ISP. Figure three dscount rates the optimum half-lengths are 1600 ft,
E- I3 contains the result of the simulation. The first conclusion 1400 ft and 800 ft, respectively.
is that the relative impact of the proppant-pack damage is far Additionally, the larger discount rates result in a more bell-
more severe in higher permeability reservoirs. This is re- like shape of the NPV curve. There is frequent confusion
flected by the much steeper curve for the I -md case compared associated with a flatter curve. For example, in Fig. E- 14 the
to the curve for the 0.01-md case. Using ISP instead of sand incremental NPV (for the 15% rate) from a fracture half-
helps. For the 1 -md reservoir, the same optimum NPV can be length equal to 800 ft to the optimum (x, = 1600 ft) is only
obtained if sand is used with 50% damage or if ISPis used with $45,000, while the treatment costs are doubled (from $85,000
90% damage. to $167,000). However, it should be remembered always
However, if the reservoir permeability is too small (0.01 that the NPV already incorporates costs, plus it assesses the
md) and thus a higher fracture conductivity is relatively required 15% discount rate. In other words, if the latter is the
ineffective, the incremental benefits may not justify the sig- acceptable rate then all the incremental NPV constitutes an
nificantly additional costs of using ISP over sand; hence, appropriate return on the original investment.
the “flip-flop” between the sand and ISP curves for the
0.0 1 -md case.

E-21