MEMORANDUM

FROM:	ICF International

TO:	Ravi Srivastava, U.S. EPA 

THRU:	Graham Fitzsimons, EC/R

DATE:	 	April 14, 2016

SUBJECT:	Data Availability Analysis for the Low Pressure Well Equation 
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This memorandum documents the work performed to evaluate the availability of data for variable inputs to the low pressure well equation.    
The low pressure well equation requires estimates of certain variables obtained prior to well completion. In particular, estimates of the following variables constitute the input requirements for the low pressure well equation: 
 Wellhead API gravity;
 Gas production rate at the wellhead;
 Oil Production rate at the wellhead;
 Water Production rate at the wellhead;
 Bottomhole Temperature;
 Well Depth; and
 Formation Pressure.
Table 1 below presents a summary of data availability for the above input variables for a well prior to completion.  The table is not meant to be an exhaustive list, but rather provides an overview of how an operator obtains estimates for input variables.  Measured values refer to quantities directly obtained for the well being completed while estimates refer to values obtained from other wells or analysis.  










Table 1  -  Input Variable Data Availability Overview
                                Input Variable
                               Data Availability
     Data Estimates Available with Well Operator Prior to Well Completion?
                                  Well Depth
Permit to Drill requirements, test well drilling 
                    Yes, typically based on measured value
                             Wellhead API Gravity
Sampling, test well drilling, in-field analysis, historical analysis of state required production and/or well completion reports, internal company business/economic analysis  
             Yes, typically based on measured or estimated values
                    Production Rates (Oil, Gas, and Water)
test well drilling, in-field analysis, historical analysis of state required production and/or well completion reports, internal company business/economic analysis
                   Yes, typically based on estimated values
                 Formation Pressure and bottomhole temperature
Drill stem testing, test well drilling, in field analysis, completion reports
             Yes, typically based on measured or estimated values

Well Depth:
During oil and gas operations it is commonplace for some of the input variables to be estimated as part of state reporting and permitting processes.  A good example of this is well depth.  As part of a Permit to Drill form (required by states such as Texas and Oklahoma), an operator reports the estimated well depth prior to completion.  
Wellhead Oil API Gravity and Production Rates (Oil, Gas, and Water):
Oil and gas operators will strive to obtain the best estimates of key properties of a well to establish the economics of the well and determine the return on investment.  This can be considered a standard business practice as oil and gas operators evaluate the well economics on a well-by-well basis.  Considering the high cost of drilling a well, an operator will perform multiple tests and sets of analyses for a given well prior to completion to estimate both the quality of oil (i.e., API gravity), and production quantities (i.e., production rates of oil, gas, and water).  These tests may range from seismic surveying to obtaining rock core samples.  Geologists often compare the geologic features of the sampled core and determine if similar geologic formations across the United States are a suitable analogs for estimating production characteristics.  Moreover information from wells (e.g. Developmental, Wildcat, and Exploratory) completed in the same basin can be used to develop estimates of API gravity and production for the well under consideration. Test wells are also drilled to further refine estimates.  From these analyses an operator can estimate production values for oil, gas and water.  
Formation Pressure and Well Temperature
Operators typically perform stratigraphic tests with small diameter wells and drill vertical test wells to obtain further granularity and insight on the properties of a particular area of interest.  Stratigraphic tests provide estimates of pressure in addition to other geologic properties, while vertical test well drilling broadens the operator's knowledge and understanding of hydrocarbons properties and characteristics of the well (e.g. production rates, gravities, temperature, etc.).  Moreover information from wells (e.g. Developmental, Wildcat, and Exploratory) completed in the same basin is used to develop estimates for the well under consideration.  Thus, although not typically found on reporting forms to state agencies, formation pressure and well temperature are estimated by oil and gas operators when evaluating an area for drilling.  
Summary
Oil and gas operators will strive to obtain the best estimates of key properties of a well to establish the economics of the well and determine key outputs such as the return on investment.  This can be considered a standard business practice. The variables used as inputs in the low pressure well equation relate directly to well economics. Therefore, it is in an operator's best interest to estimate these variables at the highest possible degree of accuracy before proceeding with making an investment in well completion.    

