Production Allocation: Rosetta Stone or Red Herring? Best Practices for Understanding Produced Oils in Resource Plays

The production of crude oil from resource plays has increased enormously over the past decade. In the USA, around 63% of total output in 2019 was from unconventional production. The major unconventional plays in the USA (e.g., Permian Basin, Anadarko Basin, Eagle Ford, etc.) have become some of the world’s largest oil producers. However, unlike “conventional” exploitation, the target zones in unconventional systems are generally the source rocks themselves or adjacent strata and require numerous horizontal wells and stimulation via hydraulic fracturing to meet production targets. In order to maximize production, operators have developed various well stacking methods, all of which require some form of monitoring to ensure that well spacing is optimized and fluid production is not being “stolen” from adjacent formations, thereby reducing the production potential in associated wells. This necessity, amongst other geochemical considerations related to source rock characterization, has resulted in the expansion of “production allocation” and “time lapse geochemistry” methods. These methods were initially developed for conventional production decades ago, but have since been adapted to unconventional systems. However, the direct applicability of this method is not straightforward and numerous considerations need to be taken into account, foremost among which are: (1) “What defines your end-members?” (2) “Are these end-members valid across a meaningful development area?” and (3) “What is the most appropriate use of geochemistry data in these systems?”. Reservoir geochemistry studies, which include both “time lapse geochemistry/production monitoring” and “production allocation”, are valuable geochemical methods in unconventional plays but need to be used appropriately to provide the cost savings and business direction that operators expect. In this paper, we will discuss a number of case studies, both theoretical and natural, and outline the important factors which need to be considered when designing a reservoir geochemistry study and the common pitfalls which exist. The case studies and best practice approach discussed are designed to highlight the power and flexibility of geochemical data collection methods, integration with the operator’s knowledgebase, and other analytical methods to customize the program for individual development programs. Emphasis is placed upon developing robust and applicable fluid relationships from geochemical data and evidence for statistically significant changes through time.