Economics Optimization

Hydraulics Fracturing Design on

Steady State Reservoir

Abah
Petroleum Engineering ITB
2005

Outlines

Objective
Methodology
At glance in vertical hydraulic fracturing
Economic parameters used in study
Case Study
Conclusion

Objectives

Methodology

Establish approaches on predicting economics of

hydraulic fracturing treatment with pertinent
economic criteria given (by analysis a given case).
Understand level of economic sensitivity to
particular treatment parameters on a given case.

Concept of optimization for fracturing design

Methodology

Hydraulic Fracturing

Systematic approaches

Hydraulic Fracturing for

well stimulation is to
increase well productivity
by creating highly
conductive path compare
to reservoir permeability
some distance away from
wellbore into the
formation.

Study on vertical hydraulic fracturing design

Study on production performance profile
Literate on fracturing economic design.
Study on element of fracturing treatment cost
Apply on case study as applicable with pertinent
economic criteria.

Reason to Fracturing Stimulation

Fracturing Mechanism

Faster return of investment, i.e. accelerate

production
Improve ultimate recovery in some cases
Decrease drawdown at the sandface for more
efficient use of reservoir energy

Fracture Initiation

The production increases on possible reason:

New zone exposed
Reduce permeability bypassed (damage bypass)
Flow pattern changed from radial to linear

Pumping high rate

suitable fluid
Fluid pressure build up
> earth compressive
strength
Fractures along a plane
perpendicular to
minimum matrix
compressive stress

Fracture Propagation

Fractures growing
Proppant fill into wide
fracture.
Proppant create high
conductive path after
fracture close back

Fracture Propagation

Fracture Propagation

Fracture Orientation
The fracture will propagate in a plane perpendicular to the
minimum effective matrix stress. Usually the minimum stress is
horizontal, and a vertical fracture results.
Where horizontal matrix stress are unequal, there will be a
preferred direction for the vertical fracture.

Fracture Propagation Pressure

As the fracture is extended, the pressure in the fracture at the
wellbore (fracture propagation pressure) increases as a result
of fluid friction required to push the frac fluid through an
increasing distance toward the tip of the fracture.
Other factor that can increase fracture propagation pressure is
the increasing of pore pressure in the rock near the fracture
due to fluid leakoff (also increased closure pressure).

Fracture Closure Pressure

To hold the fracture open after initiation (or to just keep it from
closing), the pressure in the fracture must exceed the pressure
by an amount equal to the minimum effective rock matrix
stress. This pressure is usually called the fracture closure
pressure. The fracture gradient is the fracture closure pressure
divided by depth.

Fracture Design Calculation

Fracture Treatment Pressure

Fracture Area
Fracture Fluid Coefficient
Fracture Width
Fracture Efficiency
Fracturing Hydraulics
Fracturing Equipment Design

Net Fracture Pressure

Pressure in the fracture in excess of the fracture closure
pressure is the net fracture pressure. Net fracture pressure acts
against the elasticity, or Youngs modulus, of the rock to open
the fracture wider.
During the fracture job, the net fracture pressure (Nolte Plot)
can be used as an indicator of fracture extension.

Regional Rock Stress

v

v
Pr

= Total vertical stress, psi

= 0.007 D
= average rock density, lb/ft
= depth, ft
= 0.007 D Pr
= formation pore pressure, psi

h =

1-

h2
h1
h1 = Maximum principal horizontal matrix stress
h2 = Maximum principal horizontal matrix stress

v Pr)

= Poissons ratio
Horizontal Matrix stress depend on rock properties and pore pressure.

Fracture Pressure

Fracture Pressure

Fracture Initiation Pressure

Fracture Closure
Pressure.

where min is the minimum horizontal stress, max is the

maximum horizontal stress, T is the tensile stress of the rock
material, is the poroelasticity constant and po is the pore
pressure.

Fracture Propagation Pressure

Pressure is the stabilized value of the
injection pressure for a longer period
of time during which the fracture is
evolving.
Step rate to identify breakdown
Pressure

Fracture Area
At =

qiW f x 2
2x
e erfc( x ) +
1
4K 2

2 K t
x=
Wf

2x
x2
x4
x6
+

+ ...
and erfc( x ) = 1
10
1! x3 2! x5 3! x 7

At = total area of one face of the fracture at any time (t) during injection (ft2)
qi = contant injection rate (ft3/min)
T = total pumping time (minutes)
Wf = fracture width (ft)
K = fracture fluid Coefficient (ft/min)

After a fracture calibration

treatment, which is carried out
without injecting proppant
material, the fracture volume
gradually decreases because of
leakoff (and also because of
possible back flow, if the
injected fluid is flowed back
through the well).
Fracture-related pressure points:
(1) breakdown pressure;
(2) fracture propagation pressure;
(3) instantaneous shut-in pressure;
(4) closure pressure;
(5) fracture reopening pressure;
(6) closure pressure from flow-back;
(7) asymptotic reservoir pressure;
(8) rebound pressure

Net Fracture Pressure

Actual pressure Closure
Pressure

Fracture Fluid Coefficient

K=

2K c K v K w

K v K w + K w2 K v2 + 4 K c2 K v2 + K w2

Where
Kc = viscosity & compressibility of reservoir fluid
K c = 0,0374p

keecR

Kv = viscosity of fracture fluid

K v = 0,0469

ke pe

p = diff pressure across face of fractures

e = eff. Formation porosity
Ke = eff. Formation permeability
R = reservoir fluid viscosity (cp)
f = fracturing fluid viscosity (cp)
cR = koeff. Of isothermal compressibility
reservoir fluid

Kw = fluid loss characteristics of reservoir fluid

K w = 0,0328

m
2A

m = slope of fluid loss curve

A = cross sectional area of filter

Fracture Width

Fracture Dimension with No LeakOff

Perkins-Kern-Nordgren (PKN) model

Kristianovich-Zheltov-Geertsma-DeKlerk (KGD) Model

Perkins-Kern-Nordgren (PKN)

Fracture Extent:
Fracture Width:
Kristianovich-Zheltov-Geertsma-DeKlerk (KGD) Model

Fracture Extent:

Perkins-Kern-Nordgren (PKN)

Kristianovich-Zheltov-Geertsma-DeKlerk (KGD) Model

Fracture Efficiency
The volume of fracture created divided by the volume of
fracturing fluid injected.
The efficiency is occurred since the fracturing fluid has
leakage to formation
Eff =

Eff =

where

x=

Vf
Vi

Dimensionless Fracture
Conductivity

W f At

Represent effect of a combination of fracture variables that express the

function:
Conduct the hydrocarbon inside the fracture to the well
Collect the hydrocarbon from the surrounding matrix rock.
Dimensionless Fracture Conductivity (CfD)Cinco-Ley&Samaniego,1981

Where:

qit

1 x2
2x
e .erfc( x) +
1
x 2

2 K t
Wf

Fracture Width:

C fD =

k = reservoir permeability
xf= half length of propped fracture
kf= permeability of proppant pack
w = average fracture width

kf w
kx f

CfD <<1 restricted within fracture, unrestricted while flow into

fracture
CfD >>1 un estricted within fracture, restricted while flow into
fracture
CfD optimum at 1.6

Optimum Fractured Volume

The propped volume of one wing of fracture has related function
to fracture half-length as expressed below:

Vf k f

xf =
C hk
fD

0.5

Productivity Index of Fracturing

Treatment
General PI equation on fracture treatment
with pseudo skin factor
PI f =

PI equation that introduced length of

fracture (xf) & CfD

Where:
Xf = half length of propped fracture
Vf = propped volume
Kf = permeability of proppant pack
CfD = dimensionless fracture conductivity
h = fracture height
k = formation pemeability

Dimensionless Fracture
Conductivity to PI
Optimum PI on CfD opt = 1.6
PI f ,opt

2kh
=
B

1
2

0.869 + 0.5 ln

2kh
1
B 0.75 + ln re + s
f
rw

re hk
Vf k f

PI f =

2kh
1
B 0.75 + ln re + f (C )
fD
xf

Frac Job Design Criteria

Cinco-Ley&Samaniego,1981

1. Select the right well

Consider the risks involved condition that increase risks are :
Less than 15-20 ft of shale between the frac interval and gas or water sand.
Others things being equal fractures tends to move upward due to sand
fallout to the bottom of the fracture sometimes this effect can be
maximized.
Water or gas contact nearby and located in a direction so that fracture
would go toward it.
Well producing high GOR or WOR are poor candidates for fracturing unless
it is free gas or water from a zone which can be shut off.

2. Design for the specific well

Design parameter to be considered are :
Lithology and mineralogy of the formation
Fracture geometry parameters (Young modulus, Poissons ratio, formation
boundary horizontal matrix stress)
Reservoir fluids and reservoir pressure/energy
Physical well configuration

Frac Job Design Criteria

Hydraulic Fracturing Equipment

3. Optimize design over several jobs

Fluid storage
Proppant storage
Blender
Primary high pressure pumps
The Operational control
centre

Usually the experience gained in several carefully designed and evaluated

jobs is necessary to achieve optimum design.

4. Utilize calculation procedures as a guide

Treatment design must specify the following parameters :
Frac fluid type
Fluid volume
Fluid viscosity and fluid loss schedule
Proppant size and type
Proppant schedule
Injection rate schedule
Basic design procedures :
Determine required fracture length and conductivity
Determine frac fluid characteristic and injection rates
Determine a treatment pumping and proppant injection schedule
Computerization speeds calculation procedures

Frac Job Evaluation

Production Performance Profile

To evaluate the success of a frac treatment

and help design succeeding treatments, it
is necessary to know :

What sustained production increase was

obtained
What zone or zones were actually stimulated.
For vertical fractures, what was the fracture
height and azimuth.
What was the fracture length
What was the fracture conductivity

Steady or Semi-Steady Sate Behavior (k>10 md)

1 dq

Decline rate determination

s=
= bq m
q dt

Performance decline:

Constant percentage decline

Hyperbolic decline

Harmonic Decline

Np =

qi e st e sti
s
qi

McGuire, Tinsley, Frick, Guerero,1969

1 (1 + ms t )mm1
i

Np =

(1 m )si

Np =

qi
ln(1 si t )
si

q= producing rate, qi = initial prod rate, t=time, b&m = constant, s = constant decline
rate, si = initial decline rate, Np = cummulative prod

Production Performance Profile

Production Performance Profile

Unsteady State (Transient) Behavior
Amenable for k=1-10 md
Numerical approaches
Dimensionless type curves approaches (Holditch,
Agarwal)

Economic Parameters

Economic Parameters

Present Value (PV)

PV for Discrete or Continuous Increment

calculates the cashflow resulting from revenue of

production and expense

n=I

PV = Dn FV
where:
n = total number of compounding periods which the interest
rate applies
D = discount factor

D=
1 + i A
n A

iA = annual interest rate

nA = number of compounding periods per annum.

PV ]I = PV ]n 1 = D nV
n

n
n 1

n= I

Where PV increment by time & V indicating cash flow include income,

expense, tax, etc
D = discount factor
For discrete increment:

For continuous increment

D=
1 + i A
n A

1
D = iA
n
e n A

PV for Specific Performance Decline

Net Present Value

Discrete on Constant percentage decline

NPV for economic treatment is applied to cover entire

net cashflow from initial (qi) to abandonment (qa)
producing rates.

PV ]1 =
K

A 1 es
s

) 1 B

1 B 1 E [Dk ]

K =1

Discrete on hyperbolic decline

PV ]1 =
K

K 1
m 1
m 1

D D K [1 + msi K ] m + (D 1) D n [1 + msi n] m E [Dk ]

n =1

NPV = PVafter PVbefore PV(CT)

(1 m )s

Discrete on harmonic decline

PV ]1 =
K

K 1
m 1
A n
n
D ln[1 + si K ] + (1 D ) D ln[1 + si n] m E [Dk ]
si
n =1

Where
A = 30.4 qi U
B = Des
1 D K +1
Dk =
1
1 D

Where CT is treatment cost

K = number of monthly increment

i = monthly interest rate
U = average hydrocarbon value per unit produced
E = monthly operating expense

Others Economic Parameter

Typical Fracturing Treatment Cost

Element

Pay Out Time (POT): the length of time required for

the cumulative cash position to reach zero.
Discounted Pay Out Time (DPOT): the length of time
for the present value of the cumulative cash position to
reach zero.
Return of Investment (ROI): ratio of cumulative net
cash flow over the project life to the maximum
investment/ cash outlay.
Rate of Return(ROR): the compound interest rate
whose discount factors will make the present value of
projects net cash flow equal to zero.

All parameters are assciated with a given interest rate

and have meaning only wen the interest rate is secified.

Fracturing pumping equipment

charges
Pressure multiplier pump charges
Propping agent pumping charges
Fracturing material and material
handling cost
Blender service charges
Slurry concentration handling
charges
Auxiliary Stimulation equipment,
meter, manifold, tank
Material and equipment
transportation charges
Stimulation technical &
laboratory support
Miscellanous service & license
charges
Others.

Typical Treatment Cost

Case Study

There are 3 cost categories to be analysed:

Reservoir, Decline Performance & Well Data

Overhead, constant cost per job, such as the

equipment rentals, design cost.
Variable as time function, such as treating unit
operating cost, manpower cost.
Variable as quantity/ volumetric, such as
proppant cost, fluid, additive cost
CT= OC + C(t) + C(q)

Combination of this 3 cost determines

treatment cost variables

Fracture Design Data

Fracture closure pressure : 4000 psi

Elastic modulus : 4x106 /psi
Fracture height : 180 ft
Fracture propagation model : Perkins and Kerns
Pumping rate : 40 bpm
Tubulars: 6000 ft, 3.25 id tubing
Tubular volume: 5340 gals
Maximum allowable treating pressure: 8000 psi
Fracturing fluid properties:

Density (w/o proppant) = 8.4 ppg

Apparent viscosity in the fracture: 100 cp
Fluid loss coeff: 0.002 ft/min0.5
Spurt Loss: 0.01 gal/ft2
Pipe friction (in 3.25 ID)

20 psi/1000ft at 1 bpm
95 psi/1000ft at 40 bpm
270 psi/1000ft at 100 bpm

Depth = 6100 ft
Net Pay = 10 ft
Permeability = 5 md
Porosity = 20%
Water Saturation 20%
Oil viscosity at reservoir condition = 1 cp
Oil formation Volume Factor = 1.1
Oil Recovery Factor = 40% OOIP
Initial reservoir pressure: 2500 psi
Producing Wellbore BHP = 500 psi
Spacing = 160 acres/ wells
Wellbore diameter = 7.0 in
Completion mode = cased hole
Tubular length = 6000 ft
Tubular ID = 3.25 in
Prefact Initial Producing Rate : 200 bopd
Post/Pre production Increase : Prats methods
Abandonment rate = 5 bopd
Recoverable oil at abandonment : 722,000 bo.

Economic Data

Company working interest: 100%

Crude oil price: $25/bbl
Well operating cost: $3000/month
Annual discount rate: 15%
Well drilling cost: $145,000/well
Fracturing treatment cost

Fracturing fluid: 50 cent/gal

Propping agent:

For 3000 md-ft conductivity: $8.00/CWT

For 6000 md-ft conductivity: $60.00/CWT
For 7000 md-ft conductivity: $70.00/CWT

Associated fixed cost: $5,000/well

Propping agent data:

Average concentration in fluid: 3.0 ppg

Average fracture conductivity: 3000 md-ft

10

Flow Chart of Fracturing

Optimization Process

Preliminary Hypothetical Result

As given reservoir, rheology, well and fracturing treatment data:

Before fracturing treatment

After fracturing treatment

Formation permeability

Iterate on
Each of xf, wf
CfD, Vf,qf ,t, pfr

Cost of treatment
CT

Fract Coeff (Kc)

Po

PIo

q=PI*P

Np on
3 Steady State Model
PVuntreat

PIf
q=PIf*P

Np on
3 Steady State Model
PVtreat

NPV
of project

Preliminary Hypothetical Result

Preliminary Hypothetical Result

Fracture Conductivity

Net Pay

11

Preliminary Hypothetical Result

Other sensitivity discussed

Well spacing sensitivity

Sensitivity on steady state performance decline model

Constant percentage decline
Hyperbolic decline
Harmonic decline
Sensitivity of optimum fracture length on
Fracture Height
PKN vs. KGD Propagation Models
Dimensionless Conductivity Fractures
Oil prices
Others

Summary & Feedback

It is possible to predict optimum fracturing
treatment (represented by half-fracture length) on
any given lithology, mineralogy of reservoir,
fracture geometry, well configuration, reservoir &
fracturing treatment characteristics.
The sensitivity of optimum fracturing treatment is
need to be analyzed to get better understanding on
optimum fracturing treatment behavior.

12