A Data-Analytics Tutorial: Building Predictive Models for Oil Production in an Unconventional Shale Reservoir

Considerable amounts of data are being generated during the development and operation of unconventional reservoirs. Statistical methods that can provide data-driven insights into production performance are gaining in popularity. Unfortunately, the application of advanced statistical algorithms remains somewhat of a mystery to petroleum engineers and geoscientists. The objective of this paper is to provide some clarity to this issue, focusing on how to build robust predictive models and how to develop decision rules that help identify factors separating good wells from poor performers. The data for this study come from wells completed in the Wolfcamp Shale Formation in the Permian Basin. Data categories used in the study included well location and assorted metrics capturing various aspects of well architecture, well completion, stimulation, and production. Predictive models for the production metric of interest are built using simple regression and other advanced methods such as random forests (RFs), support-vector regression (SVR), gradient-boosting machine (GBM), and multidimensional Kriging. The data-fitting process involves splitting the data into a training set and a test set, building a regression model on the training set and validating it with the test set. Repeated application of a "cross-validation" procedure yields valuable information regarding the robustness of each regression-modeling approach. Furthermore, decision rules that can identify extreme behavior in production wells (i.e., top x% of the wells vs. bottom x%, as ranked by the production metric) are generated using the classification and regression-tree algorithm. The resulting decision tree (DT) provides useful insights regarding what variables (or combinations of variables) can drive production performance into such extreme categories. The main contributions of this paper are to provide guidelines on how to build robust predictive models, and to demonstrate the utility of DTs for identifying factors responsible for good vs. poor wells.