AI-driven software for unconventional assets helps operators fine-tune completion strategies and democratizes access to accurate production forecasting.
The Problem with Traditional Production Forecasting
For decades, the oil and gas industry has relied on decline curve analysis developed by J.J. Arps in 1945 for conventional vertical wells. While these models worked well for their intended purpose, they fall short when applied to the complexities of modern unconventional shale reservoirs and lateral wells.
"What has historically been done in production forecasting is taking a set of equations developed in the mid-1940s and just slapping a user interface on the top of it. This approach has worked for conventional and vertical wells but doesn't translate well into how shale reservoirs and lateral wells work."
The limitations extend beyond technical accuracy. Traditional forecasting methods create operational challenges:
- Time-intensive manual analysis
- Inconsistent results between engineers
- Human bias in forecasting
- Limited ability to test multiple scenarios quickly
"You can put 100 reservoir engineers on a project and get 90, 95 different answers for what they think each forecast will be," Zapp notes.
AI-Driven Solution for Unconventional Assets
AlphaX Decision Sciences developed Sky, an AI-native production forecasting platform specifically designed for the complexities of shale reservoirs. Unlike traditional statistical approaches, Sky uses multidimensional mathematics to understand subsurface physics and reservoir interdependencies.
Key Capabilities
- Basin-Specific AI Models: Sky currently supports the Permian, Eagle Ford, Haynesville, Williston, and Bakken basins, with models trained on comprehensive public and proprietary data.
- Rapid Sensitivity Analysis: Users can quickly test how different variables impact production forecasts.
- Real-Time Forecasting: Dual forecast arcs for both short-term cash flow and long-term operational planning.
- Gamified Interface: Intuitive, visual interface allows instant scenario testing.
Proven Results: Lario Oil & Gas Case Study
Lario Oil & Gas implemented Sky to optimize completion strategies across their 7,000+ well inventory in the Midland Basin. The results demonstrate the platform's impact:
- >10% performance enhancement over basin peer P50 forecasts
- Single-digit accuracy in quarter-to-quarter validation checks
- Rapid scenario testing across hundreds of wells
- Objective, bias-free forecasting
The Bottom Line
As Zapp from Lario concludes: "The use of this product has meant that we can run our workflow through the machine and trust it and get on with what we're doing. This is a solution to a modern problem that's been derived in the last five years, not the last 50."