Economic Optimization of Bailing Operations in the Appalachian Area

Abstract The gas industry in the Appalachian Basin is experiencing falling gas prices. The result is reduced revenues and fewer dollars available for exploration and development of new reserves. This has forced innovative companies to examine methods to increase production from existing wells. It has been observed that optimizing a fluid removal program can result in profitable production increases. The majority of accumulated fluids in the wellbore are formation salt brines. The hydrostatic pressure created by this fluid column can restrict or kill production from these typically low pressured reservoirs. The most common procedure used to remove the production reducing brines is periodic bailing. The non-linear least square curve-fitting techniques are being applied to fit the production decline of each well. The overall production is curve-fitted as hyperbolic or harmonic decline and each bailing cycle is curve-fitted as an exponential decline. The bailing cost and other economic overhead are used as the economic limit for bailing cycle scheduling. Other criteria such as rate of return on investment, lease contracts, current gas prices, geographic location, weather conditions and farming activities will be optimized into a working priority list for the bailing operation of each well. The ultimate goal is to create a complete management package on a microcomputer that can be used to continuously evaluate the update the entire bailing and production maintenance program. In this package, artificial intelligence will be included to optimize the decision-making rules. This new approach will create an economic benefit for oil and gas production in the Appalachian Basin. This paper describes the development and work completed towards this objective.