Liu Thesis 2020

Copyright
by
Chuxi Liu
2020
The Thesis Committee for Chuxi Liu
Certifies that this is the approved version of the following Thesis:
Automatic History Matching with Data Integration for Unconventional

Reservoirs
APPROVED BY
SUPERVISING COMMITTEE:
Kamy Sepehrnoori, Supervisor
Wei Yu
Reservoirs
by
Chuxi Liu
Thesis
Presented to the Faculty of the Graduate School of
The University of Texas at Austin
in Partial Fulfillment
of the Requirements
for the Degree of
Master of Science in Engineering
The University of Texas at Austin

December 2020
Dedication
To my beloved parents, Ziyun Liu and Aimin Ma for their unconditional love and
encouragement.
Acknowledgements
I would especially express my greatest gratitude toward my advisor, Dr. Kamy
Sepehrnoori, for his continuous supports and guidance for the entire period of my
master’s degree. His resourceful feedbacks and comments on the weekly meeting are
extremely helpful for me to envision the industry insights and also to build a more
rigorous thought process. It is my greatest pleasure and honor to work under this research
group, which is the leading research group in unconventional resource studies in the
entire United States.
Secondly, I am very thankful for Dr. Wei Yu. His professional expertise,
unconditional suggestions and rigorous trainings helped me gain invaluable experience
both in perspective of academia and industry. I am grateful for his utmost patience, trusts,
and sincere emotional support whenever I am facing a challenge. Most importantly, I am
grateful for his review and writing advices given towards the completion of this thesis.
My deepest credit also extends to previous graduate students, Marut Wantawin,
Silpakorn Dachanuwattana, and Sutthaporn Tripoppoom for building a solid foundation
on automatic history matching algorithm. I also appreciate the help and supports from our
research group students for skill sharing, especially Esmail Eltathan for his tutorial on the
fracture modelling and reservoir modelling and his knowledge regarding the numerical
optimization.
Finally, I want to acknowledge the great assistances from my UT PGE friends for
their care and helps, so that I can experience a wonderful life in Austin. In addition, I
want to appreciate the emotional and financial supports from my parents. Without them,
it would be difficult to obtain my achievements thus far.
v
Abstract

Reservoirs
Chuxi Liu, M.S.E.
The University of Texas at Austin, 2020
Supervisor: Kamy Sepehrnoori
Given the dynamic production data of a reservoir, numerical optimization tools
such as history matching can minimize the global error and find an optimal reservoir
model that can approximate the fracture geometry and petrophysical parameters in the
subsurface. For unconventional reservoirs, the idea behind the automatic history
matching is well developed and the workflow is also applied to statistically generate an
ensemble of solutions that quantitatively characterizes associated uncertainties. However,
more uncertainties regarding fracture and reservoir properties could be further reduced by
using available information. Therefore, the objective of this study is to minimize
uncertainty when make realizations of shale reservoirs, by integration of data from
geology and geomechanics.
We utilized the developed automatic history matching (AHM) code and modified
the proxy engine, by substituting the neural network (NN) model with XGBoost
(XGBOOST) model. The XGBOOST is found to perform more efficiently and accurately
than NN, when the size of the available dataset for training is small. Furthermore, the
vi
AHM workflow is capable of modelling non-uniform half-length of hydraulic fractures in
the corner point gridding system and complex, realistic natural fracture distributions
using the fractal theory. Both of these functionalities partially fulfill some degrees of
reality, by mimicking the irregular half-length outputted from fracture modelling
software and naturally occurring patterns often found at cores. We applied this innovative
approach to actual shale gas and shale oil wells. We then found that by coupling
additional data into the AHM process, the fracture geometries and petrophysical
properties can be more accurately depicted. The obtained results are also highly
assimilating with the field experience from the engineers. In addition, by studying natural
fractures in the model, we found out that the connectivity between natural fractures and
wellbore/hydraulic fractures plays an important role in determining the well’s EUR
potential.
This study is beneficial because more reliable and robust results based on
geological/geomechanical information, along with non-deterministic realizations of
reservoir and fractures, can provide invaluable guidance towards well spacing planning,
EUR estimation and economic appraisal, and fracture design optimizations.
vii
Table of Contents
List of Tables ..................................................................................................................... xi
List of Figures ................................................................................................................... xii
Chapter 1: Introduction ........................................................................................................1
1.1 Motivation.............................................................................................................1
1.2 Research Objectives ..............................................................................................2
1.3 Thesis Outline .......................................................................................................2
Chapter 2: Literature Review ...............................................................................................4
2.1 Fracture Modelling ...............................................................................................4
2.2 History Matching ..................................................................................................8
2.3 Corner Point Gridding ........................................................................................10
2.4 Natural Fractures.................................................................................................11
Chapter 3: Methodology ....................................................................................................12
3.1 Introduction .........................................................................................................12
3.2 Automatic History Matching (AHM) Workflow ................................................12
3.3 Input Module.......................................................................................................14
3.3.1 Field Inputs ..........................................................................................14
3.3.2 Data Treatments ...................................................................................14
3.3.3 Base Model Setup ................................................................................15
3.4 Iterative Optimization Module............................................................................16
3.4.1 Uncertainty Identifications...................................................................16
3.4.2 Smart Sampling....................................................................................18
3.4.3 EDFM with Hydraulic Fractures .........................................................19

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3.4.4 EDFM with Natural Fractures .............................................................22
3.4.5 Reservoir Simulator .............................................................................24
3.4.6 Artificial Intelligence (AI) ...................................................................25
3.4.7 Markov Chain Monte Carlo (MCMC) Algorithm ...............................28
3.5 Solution Module .................................................................................................30
3.5.1 Solution Filtering .................................................................................30
3.5.2 Representative Best Match ..................................................................31
3.5.3 Posterior Distribution ...........................................................................32
3.6 Post-processing Module ......................................................................................32
3.6.1 Probabilistic Production Forecast ........................................................32
3.6.2 Visualizations .......................................................................................33
Chapter 4: Application of Automatic History Matching to Corner-Point Gridding

System in Shale Reservoirs ..........................................................................................34
4.1 Introduction .........................................................................................................34
4.2 Reservoir Model .................................................................................................34
4.3 Hydraulic Fracture Generator in the Corner-Point Grid Model .........................41
4.4 Uncertain Reservoir and Fracture Parameters Identifications ............................47
4.5 Automatic History Matching ..............................................................................50
4.6 Probabilistic Production Forecasting ..................................................................73
4.7 Natural Fracture Sensitivity Study And Visualizations ......................................77
4.8 Conclusions.........................................................................................................86
Chapter 5: Development of Realistic Natural Fracture Module in AHM by Using

Fractal Theory ..............................................................................................................87
5.1 Introduction .........................................................................................................87
ix
5.2 Reservoir Model .................................................................................................87
5.3 Connectivity Analysis and Efficiency Optimization ..........................................91
5.4 Parameters Identifications...................................................................................93
5.5 History Matching ................................................................................................98
5.6 Probabilistic Production Forecasting ................................................................122
5.7 Matrix and Fracture Pressure Visualizations ....................................................125
5.8 Conclusions.......................................................................................................128
Chapter 6: Summary, Conclusions, and Recommendations for Future Work .................130
6.1 Summary and Conclusions ...............................................................................130
6.2 Recommendations for Future Work .................................................................131
Glossary ...........................................................................................................................133
Acronyms ................................................................................................................133
Nomenclature ..........................................................................................................134
References ........................................................................................................................137
x
List of Tables
Table 3.1: Summary of significant parameters that is supported by AHM workflow. ......17
Table 4.1: Summary of statistical information regarding natural fractures in this
study. .............................................................................................................35
Table 4.2: Summary of basic reservoir, fracture and gas desorption parameters used
in this study. ..................................................................................................36
Table 4.3: Summary of uncertain parameters, their ranges, fixed parameters, and
their deterministic values used for automatic history matching. ..................48
Table 5.1: Summary of basic reservoir, fracture and gas desorption parameters used
in this study. ..................................................................................................89
Table 5.2: Summary of uncertain parameters, their ranges, fixed parameters, and
their deterministic values used for automatic history matching. ..................95
xi
List of Figures
Figure 2.1: Illustration of the concept for Embedded Discrete Fracture Model: (a)
Physical domain; (b) Numerical domain. (Xu et al. 2017). ............................7
Figure 3.1: General illustration of automatic history matching workflow. .....................13
Figure 3.2: Graphical illustration of the permeability decay and fracture closure
concepts. (Glover et al. 2015) .......................................................................18
Figure 3.3: Schematic illustration of the Latin Hypercube sampling method. (Shams
2016) .............................................................................................................19
Figure 3.4: Summary of the workflow for inputting the hydraulic fractures in
arbitrary gridding system. .............................................................................21
Figure 3.5: Graphical illustration of the variables and definitions used for inputting
the hydraulic fractures in arbitrary gridding system. ....................................22
Figure 3.6: Graphical illustration of the fractal theory and the effects of different
fractal parameter on natural fracture network: (a) 2D fractal; (b) 3D
fractal. (Darcel et al. 2003b). The D is fractal dimension and a is length
dimension. .....................................................................................................24
Figure 3.7: Simplified schematic structure of XGBoost algorithm. ................................25

Figure 3.8: Simplified schematic structure of Markov Chain Monte Carlo algorithm. ..29
Figure 3.9: Illustration of deviation of original best match (left) model’s fracture
height to the P50 value (right) of the history matching solution
ensemble. ......................................................................................................31
Figure 4.1: Visualizations of basic reservoir and well information in the corner point
gridding system: (a) Top view; (b) 3D view; (c) Regional 3D well
landing location; (d) Global 3D well landing location. ................................38
xii
Figure 4.2: Statistical distributions of spatial configuration properties of natural
fractures characterized by geologist for the reservoir model. .......................39
Figure 4.3: Visualization of reservoir dip and depth variations for the bulk field
model (not upscaled). ....................................................................................39
Figure 4.4: Relative permeability curves for modeling gas and water flow for this
reservoir model. ............................................................................................40
Figure 4.5: Porosity field with heterogeneity in both horizontal directions and
vertical direction of the reservoir model used in this study. .........................40
Figure 4.6: Comparison between the conventional hydraulic fracture design and
simplified heel-biased hydraulic fracture design: (a) Uniform half-
lengths; (b) non-uniform half-lengths; (c) Non-uniform half-lengths with
natural fractures. ...........................................................................................42
Figure 4.7: Fracture modelling software outputs for the hydraulic fractures modelled
in this study: (a) Single stage; (b) Entire well...............................................43
Figure 4.8: Illustration of the problem of creating completely horizontal fractures
(light blue) from the perforation locations: (a) Overview; (b) Enlarged
view. ..............................................................................................................45
Figure 4.9: Visualization of tilting from the horizontally generated fractures (light
blue) to the fractures that aligns with the dip of the reservoir model
(green): (a) Overview; (b) Heel side view; (c) Toe side view. .....................46
Figure 4.10: Visualization of maximum and minimum permeability decline curve. ........49
Figure 4.11: Visualization of maximum and minimum half-lengths values for both
outer and inner fractures: (a) Minimum outer and inner fracture half-
lengths; (b) Maximum outer and inner fracture half-lengths. .......................50
Figure 4.12: Conversion from WHP to BHP used in this study........................................51

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Figure 4.13: Locations of proxy prediction points for calculating values of response
variables’ objective functions during history matching iterations: (a)
Flowing BHP; (b) Water flow rate................................................................52
Figure 4.14: Comparison between simulation results from initial iteration (Latin
Hypercube sampling process) and actual production history: (a) Gas
flow rate; (b) Cumulative gas production; (c) Water flow rate; (d)
Cumulative water production; (e) Water gas ratio; (f) Flowing BHP. .........55
Figure 4.15: Number of history matching solutions versus iteration number. ..................57
Figure 4.16: Comparison between 55 filtered history matching solutions’ simulation
results and actual production history: (a) Gas flow rate; (b) Cumulative
gas production; (c) Water flow rate; (d) Cumulative water production;
(e) Water gas ratio; (f) Flowing BHP. ..........................................................60
Figure 4.17: Comparison between best match’s simulation results and actual
production history: (a) Gas flow rate; (b) Cumulative gas production; (c)
Water flow rate; (d) Cumulative water production; (e) Water gas ratio;
(f) Flowing BHP. ..........................................................................................63
Figure 4.18: Comparison between prior and posterior distributions of the studied
uncertain parameters based on 55 history matching solutions: (a) Matrix
permeability; (b) Fracture permeability decay factor; (c) Fracture water
saturation; (d) Fracture height; (e) Outer fracture half-length; (f) Inner
fracture half-length; (g) Hydraulic fracture conductivity; (h) Natural
fracture conductivity. ....................................................................................66
Figure 4.19: Characterized fracture geometry from AHM workflow: (a) Non-uniform
fracture half-lengths; (b) Fracture height. .....................................................67
xiv
Figure 4.20: Pressure-dependent fracture permeability decline curve of 55 history
matching solutions and the best match model. .............................................67
Figure 4.21: Parallel coordinate plot to visualize combinations of uncertain
parameters, including non-history matching solutions (light grey);
history matching solution (light orange); and best match solution (red). .....68
Figure 4.22: Comparison between response parameters’ values and relative errors of
proxy model and simulation results for iteration 2, 4, 6, 8 and 10: (a)
Water flow rate at 325 days; (b) Flowing BHP pressure at 334 days; (c)
Water flow rate relative error; (d) Flowing BHP relative error; (e) Global
relative error. .................................................................................................71
Figure 4.23: Scatter plots of values of different uncertain parameters and global error
versus simulation index: (a) Matrix permeability; (b) Fracture
permeability decay factor; (c) Fracture water saturation; (d) Fracture
height; (e) Outer fracture half-length; (f) Inner fracture half-length; (g)
Hydraulic fracture conductivity; (h) Natural fracture conductivity; (i)
global error. ...................................................................................................73
Figure 4.24: Production forecast of 55 history matching solutions: (a) flowing BHP;
(b) Gas flow rate; (c) Cumulative gas production; (d) Water flow rate;
(e) Cumulative water production. .................................................................76
Figure 4.25: Connectivity analysis of the natural fractures presented in the history
matched model: (a) Spatial distribution for different natural fracture
groups; (b) Total number of natural fractures in different groups. ...............79
Figure 4.26: Spatial connectivity analysis of the natural fractures magnified: (a) 1.5
times in both lengths and heights; (b) 1.8 times in both lengths and
heights. ..........................................................................................................80
xv
Figure 4.27: Visualizations of the effects of the natural fractures’ connectivity on
matrix pressure distributions after 20 years: (a) No natural fractures; (b)
Original natural fractures; (c) Natural fractures enlarged 1.5 times in
both length and height; (d) Natural fractures enlarged 1.8 times in both
length and height. ..........................................................................................81
drainage volumes after 20 years: (a) No natural fractures; (b) Original
natural fractures; (c) Natural fractures enlarged 1.5 times in both length
and height; (d) Natural fractures enlarged 1.8 times in both length and
height.............................................................................................................83
fracture pressure distributions after 20 years: (a) No natural fractures; (b)
Original natural fractures; (c) Natural fractures enlarged 1.5 times in
both length and height; (d) Natural fractures enlarged 1.8 times in both
length and height. ..........................................................................................85
Figure 4.30: Comparison of 20 year gas estimated ultimate recovery for four different
natural fracture connectivity scenarios. ........................................................85
Figure 5.1: A 3D example model visualizations for the reservoir, hydraulic fractures
(blue) and fractal natural fractures (green) in this study. ..............................89
Figure 5.2: Fixed relative permeability used for this study: (a) Matrix; (b) Hydraulic
fractures.........................................................................................................90
Figure 5.3: Connectivity check and non-connected natural fractures (pink) removal
for faster history matching. ...........................................................................91
xvi
Figure 5.4: Illustration of negligible effects from removing non-connected fractures
from the natural fracture network based on fractal theory: (a)
Bottomhole pressure; (b) Cumulative gas production; (c) Cumulative
water production. ..........................................................................................93
Figure 5.5: Sensitivity plots of varying fractal parameters vs natural fracture
distributions: (a) Df=2.6, Dl=2.45, α=4.5; (b) Df=2.8, Dl=2.45, α=4.5; (c)
Df=2.7, Dl=2.3, α=4.5; (d) Df=2.7, Dl=2.6, α=4.5; (e) Df=2.7, Dl=2.45,
α=4; (f) Df=2.7, Dl=2.45, α=5. .....................................................................98
Figure 5.6: Conversion from WHP to BHP used in this study........................................99
Flowing BHP; (b) Water gas ratio. .............................................................100
Hypercube sampling process) and actual production history: (a) Gas
flow rate; (b) Cumulative gas production; (c) Water flow rate; (d)
Cumulative water production; (e) Water gas ratio; (f) Flowing BHP. .......103
Figure 5.9: Number of history matching solutions versus iteration number. ................105
results and actual production history: (a) Gas flow rate; (b) Cumulative
gas production; (c) Water flow rate; (d) Cumulative water production;
(e) Water gas ratio; (f) Flowing BHP. ........................................................108
Figure 5.11: Comparison between best match’s simulation results and actual
production history: (a) Gas flow rate; (b) Cumulative gas production; (c)
Water flow rate; (d) Cumulative water production; (e) Water gas ratio;
(f) Flowing BHP. ........................................................................................111

xvii
saturation; (d) Matrix porosity; (e) Fracture height; (f) Outer fracture
half-length; (g) Inner fracture half-length; (h) Hydraulic fracture
conductivity; (i) 3D fractal dimension; (j) 3D length dimension; (k) 3D
alpha regulator. ...........................................................................................114
Figure 5.13: Characterized fracture geometry from AHM workflow: (a) Overview;
(b) Non-uniform fracture half-lengths; (c) Fracture height. .......................116
matching solutions and the best match model. ...........................................116
Figure 5.15: Parallel coordinate plot to visualize combinations of uncertain
parameters, including non-history matching solutions (light grey);
history matching solution (light orange); and best match solution (red). ...117
proxy model and simulation results for iteration 2, 4, 6, 8 and 10: (a)
BHP at 30 days; (b) WGR at 20 days; (c) BHP at 745 days; (d) WGR at
743 days; (e) BHP at 1626 days; (f) WGR at 1623 days; (g) BHP
relative error; (h) WGR relative error; (i) Global relative error. ................119
xviii
versus simulation index: (a) Matrix permeability; (b) Fracture
permeability decay factor; (c) Fracture water saturation; (d) Matrix
porosity; (e) Fracture height; (f) Outer fracture half-length; (g) Inner
fracture half-length; (h) Hydraulic fracture conductivity; (i) 3D fractal
dimension; (j) 3D length dimension; (k) 3D alpha regulator; (l) Global
error. ............................................................................................................122
Figure 5.18: Production forecasting of 52 history matching solutions: (a) Flowing
BHP; (b) Gas flow rate; (c) Cumulative gas production; (d) Water flow
rate; (e) Cumulative water production. .......................................................125
Figure 5.19: Pressure distribution of matrix at different production time: (a) 365 days;
(b) End of history (1626 days); (c) 10 years; (d) 20 years. .........................127
Figure 5.20: Pressure distribution of complex fracture network at different production
time: (a) 365 days; (b) End of history (1626 days); (c) 10 years; (d) 20
years. ...........................................................................................................128
xix
Chapter 1: Introduction
1.1 MOTIVATION
Shale rocks, which has nano-darcy level permeability, is conventionally thought
to be only the source rock that provides hydrocarbon or prevents hydrocarbons from
escaping. With the unlock of technology such as hydraulic fracturing and horizontal
drilling, hydrocarbons from the shale formations are engineered to be recoverable
nowadays. Nevertheless, significant challenges remain for shale reservoirs because of the
extensive number of uncertainties. In contrast with conventional reservoirs, shale
reservoirs are mainly feasible because of hydraulic fractures, and without proper
characterizations of these fractures, extracting economical values from these reservoirs
will be hard, and optimizations for future projects will be impossible.
With wide availabilities of production data and the continuous developments of
fracture modelling techniques, properties of the shale petrophysics and hydraulic fracture
geometry could be dynamically calibrated, by using numerical optimization procedure
called history matching. Due to current technology limits, it is not possible to fully
visualize the actual geometries of hydraulic fractures subsurface, making the history
matching problem ill-posed. Myriad combinations of the physical properties can match
the production data, and it is nonviable to validate which of these combinations is true. In
addition, some of the physical processes are still unknown to engineers, and others are
not fully understood yet. The advent of computer aided (or automatic) history matching
process provided some acceptable solutions to the problem, by quantitatively
characterizing the associated uncertainties.
1
From another aspects, the collaborations between geologist and engineers should
be even closer than before. The problem of how the work of field geologists can provide
insights to unconventional reservoir engineers is one of the keys to better solve the
problem of unconventional reservoir characterization. Two of the most important
knowledge would be the field-scale heterogeneity and natural fracture modelling, which
points to the objective of this study.
1.2 RESEARCH OBJECTIVES
The objective of this study is to utilize automatic history matching using a
Bayesian method and advanced machine learning algorithm to better study and
characterize unconventional reservoirs. Furthermore, more physics-based data, such as
geology model and fractal dominated natural fractures usually observed in outcrops, are
included in these numerical optimizations to explore their effects on the results of
automatic history matching.
1.3 THESIS OUTLINE
This thesis is structured mainly in 7 parts: In Chapter 2, an extensive literature
review on fracture modelling, history matching, corner point gridding of geology model,
and fractal theory behind natural fracture generation is provided.
In Chapter 3, we explain in detail the entire procedures/modules of the proposed
automatic history matching workflow, including input module; iterative optimization
module; solution module and post-processing module.
Chapter 4 introduces a shale gas field example to demonstrate how geology model
could be incorporated in the automatic history matching process. Probabilistic production
2
forecast, natural fracture sensitivity studies, and pressure visualizations are also
performed.
In Chapter 5, another shale gas well is history matched automatically to show how
fractal theory could assist to generate a more realistic natural fracture network. Similarly,
probabilistic production forecast and pressure visualizations are delivered.
In Chapter 6, all the studies and the corresponding findings are summarized, and
recommendations for future studies are described.
3
Chapter 2: Literature Review
In this chapter, we review and discuss the current literature of numerical
modelling and optimization of unconventional reservoirs, its challenges, present
developments, and potential solutions. Background in four main aspects, from fracture
modelling; history matching; complex gridding system and natural fractures, will be
thoroughly introduced.
2.1 FRACTURE MODELLING
With the advent of hydraulic fracturing and horizontal drilling, more hydrocarbon
resources can be extracted from previously challenging unconventional reservoirs. Even
though fracturing is vastly applied in nearly all unconventional reservoirs, the modelling
and numerical characterizations of the geometry of these man-made fractures is still
under developments, never minding the unfathomable myths about subsurface nature
factures. In the numerical optimization community, this modelling becomes more
significant because it greatly affects the quality of history matching results. Therefore, we
introduce some of the background behind fracture modelling below.
Numerical modelling of both hydraulic and natural fractures in the

unconventional reservoirs is difficult. McClure et al. (2020) summarized three major
topics in fracture modelling, namely categories of the model; workflow of the model; and
simplifications/assumptions of the model. They also outlined several challenging aspects
related to the fracture modelling, some of which are not well understood. These includes
spacing designs; factors dominating fracture growth; symmetry; proppant modelling;
RTA (rate transient analysis) analysis; net pressure modelling; initial shut-in pressure
(ISIP) and geomechanical heterogeneity (McClure et al. 2020). Let alone the complexity
4
of hydraulic fracture modeling, the occurrences of natural fractures in the shale reservoirs
presents more uncertainty (Cipolla et al. 2011).
In general, to solve the complicated issues presented by McClure et al. (2020),
there are several mainstream methods to numerically model fractures in the
unconventional reservoirs: dual permeability dual porosity (Al-Shaalan et al. 2003; Lu et
al. 2009; Yang et al. 2018), unstructured grid (Wang 2015; Bosma et al. 2017; Ding
2019), local grid refinement (Cipolla et al. 2009; Abdle Moneim et al. 2012; Xu et al.
2019), and embedded discrete fracture model (Xu et al. 2017; Yu et al. 2018b; Miao et al.
2018).
The first method, dual porosity dual permeability model (DPDK), has complex
mathematical constructs and is very confined to simplistic fractures configurations.
Despite its considerable computational efficiency advantage, DPDK model cannot study
the complex fracture network system such as natural fractures and 3D configurations. In
addition, according to Rubin (2010), DPDK model fails to accurately model the matrix-
fracture interaction in shale reservoirs, due to a substantial pressure drop in matrix.
Furthermore, Kuchuk and Biryukov (2014) also points out that DPDK model’s limitation
based on its assumption of uniformed spaced, regularly connected orthogonal fractures,
and Sun et al. (2016) points out that DPDK model and its’ variants couldn’t properly
handle faults and local anisotropies.
The second method, unstructured grid, is more accurate to model fractures
reservoirs. However, it comes with tremendous computational costs, as suggested by
Yang et al. (2017). Moreover, the application of unstructured grid in unconventional
reservoirs requires accurate description of permeability tensors, which can be challenging
5
to be computed (Hassanpour et al. 2008). Therefore, for complex geometry of fractures,
unstructured grid struggles with the gridding arrangements and poor efficiency.
The third method, local grid refinement (LGR), has enhanced accuracy for
modelling fractured reservoirs. Nevertheless, Cipolla et al. (2009) proposed that LGR can
suffer from poor computational efficiency. Extra refinements around well blocks are also
required to accurately model flow scheme (Ghosh 1998). Tijink and Cottier (2019)
pointed out that extensive refinements must be performed to avoid invalidating results
due to vertically partial LGR if complex geological feature is presented. This would
render impractical computational costs for unconventional reservoir simulation jobs in
corner point gridding model, which will be discussed later in this chapter.
The last method, embedded discrete fracture model (EDFM), has gained favorable
popularity in recent years. The idea of a generalized and 3D EDFM is developed by
several researchers (Moinfar et al. 2014; Cavalcante Filho et al. 2015; Shakiba and
Sepehrnoori 2015; Xu et al. 2017). Extensive benchmarking of EDFM method with LGR
method is completed by Xu et al. (2017), and it is found out that EDFM method could
achieve similar accuracy with LGR but could reduce computational time by 20 times for
some complex configurations of fractures. This balance of accuracy and superior
efficiency made it possible for properly model hydraulic or natural fractures in the history
matching process. Xu et al. (2017) constructed the EDFM method utilizing non-
neighboring connection (NNC) concepts, as illustrated in Figure 2.1. Additional grid
blocks are added to original reservoir model to account for modified transmissibility
between fracture media, matrix media, and well media. One main drawback of the EDFM
method is that it assumes linear pressure distributions in matrix blocks that contain
fracture media (Rao et al. 2019).
6
(a) Physical domain
(b) Numerical domain
Figure 2.1: Illustration of the concept for Embedded Discrete Fracture Model: (a)
Physical domain; (b) Numerical domain. (Xu et al. 2017).
In summary, various numerical methods have been proposed to solve the
challenging problems of characterization unconventional fractured reservoirs. However,
each method is not able to model hydraulic or natural fractures perfectly. Besides,
significant amount of uncertain physical phenomena still cannot be explained currently.
As the development of sensing technologies, such as distributed temperature/acoustic
sensing (DTS/DAS), advances, more clarity will be brought to the discipline of fracture
modelling. For now, the EDFM method stands out to be the best fracture modelling
method to be coupled in the numerical optimization.
7
2.2 HISTORY MATCHING
To properly characterize the approximate numerical values for the
petrophysical/fracture parameters in unconventional reservoirs and make estimation of
the estimated ultimate recovery (EUR), the numerical optimization method such as
history matching is required. In this section, we review some of the current history
matching techniques. In general, history matching is divided into two main categories:
manual and automatic (Rwechungura et al. 2011).
The manual history matching requires the engineer to manually adjust one
parameter at a time to potentially match the historical reservoir responses. Tavassoli et al.
(2004) pointed out that manual history matching is considered to be utterly time
inefficient due to its trial-and-error nature. In addition, Kabir et al. (2003) stressed that
manual history matching is highly subjective and depends exclusively on the engineer’s
field knowledge/experience. The manual history matching is also very difficult to keep
up with the pace of the updates of real-time data (Kabir et al. 2003). Moreover, due to the
ill-posed problem of history matching, it is often not enough to obtain single realization
of the reservoir properties. Results from manual history matching is deemed to be overly
deterministic and could not appraise the uncertainties quantitatively.
The computer aided history matching (or automatic history matching, AHM) is
becoming the industry trend currently. The idea of AHM is to use mathematical
optimization constructs to benchmark simulation trials and reduce fitting errors
automatically, through machine languages. Many history matching work with various
optimization algorithms have been developed and applied. Arroyo Negrete et al. (2018)
developed a simplified gradient-based method to perform a history matching on the well
test responses. However, this approach cannot handle larger number of uncertain
8
parameters, and the length of history data is too small to represent field production. Gao
et al. (2017) used Gauss Newton method to minimize objective function, a measure of the
history matching error, and obtained satisfactory results. Vazquez et al. (2015) applied
particle swarm algorithm in an oil reservoir, and Xie et al. (2015) implemented
evolutionary algorithm to history matching of a shale gas reservoir and generated an
ensemble of realizations. Nevertheless, the history matching methods discussed above all
fail to properly characterize the uncertainties associated with these reservoirs. In fact,
Goodwin (2015) proposed that these optimization-based algorithms for history matching
is statistically biased. Even though some of the algorithms could generate a solution
ensemble, they are not designed to analyze the probabilistic distributions of model
parameters.
With these challenges, the proxy-based Monte Carlo Markov Chain (MCMC)
algorithm is developed to properly handle the challenges of uncertainty characterizations.
The MCMC sampler is considered probabilistic because it is an enhanced version of
Monte Carlo simulation with memory. Large sample size can well approximate the shape
of posterior distributions. However, due to the requirements of tremendous sample size,
proxy models must be adopted to substitute the role of reservoir simulator and quantify
the objective functions for the generated samples. Wantawin et al. (2017) used a
polynomial proxy model for shale gas history matching. Yu et al. (2018a) and
Tripoppoom et al. (2018) experimented with k-nearest neighbor (KNN) model and
artificial neural networks (ANN) for history matching of shale gas wells. Among these
approaches, the one with ANN proxy model has the highest accuracy and computational
efficiency. However, one problem with the ANN method is that its accuracy is sub-
optimal if the training data size is small (Sejdinovic 2015), which is common for history
9
matching problems due to the computation costs associated with reservoir simulations.
An alternative method is by using an ensembled machine learning method called
XGBoost, which has great accuracy when the training dataset size is small. This method
includes several advanced features: hyperparameters auto-tuning, robust built-in
overfitting preventions, etc. (Malik et al. 2020).
2.3 CORNER POINT GRIDDING
In order to properly account for the geological structures and petrophysical
heterogeneities associated with unconventional reservoirs, a corner point gridding model
system must be adopted. In this section, we briefly review some of the work completed to
incorporate the corner point gridding model in the numerical simulation.
In corner point gridding system, combinations of coordinate lines and nodal depth
are given (Ponting 1989) to represent complex geological features such as faults, cross-
stratified beds, and sophisticated boundaries (Ding and Lemonnier 1995). The utilization
of geology model in corner point gridding system could thus greatly reduce the
uncertainties associated with some petrophysical parameters, such as porosity. Kumar et
al. (2013) employed the corner point geology model into the numerical simulation of oil
sand steam-assisted gravity drainage (SAGD) process, but the simulation time for the fine
gridded geology model is impractical. Therefore, upscaling of the geology model should
be performed to be suitable for history matching process, especially for the fractured
unconventional reservoirs (Fumagalli et al. 2016).
Given the limitation of traditional fracture modelling methods such as dual
continuum and unstructured grid, they are extremely challenging to be adapted into the
sophisticated corner point gridding system (Du et al. 2017). However, numerous studies
10
of implementing EDFM in the corner point gridding system are conducted (Panfili and
Cominelli 2014; Panfili et al. 2015; Shah et al. 2016). Xu and Sepehrnoori (2019) further
extended the EDFM to numerically handle complex geometries encountered in the corner
point model. Therefore, a robust performance of generalized EDFM method in the corner
point gridding system is achieved and the formulations laid a solid foundation to couple
geology with numerical simulations and optimizations.
2.4 NATURAL FRACTURES
Significant challenges exist to properly model the natural fractures in any
unconventional reservoir, due to different geology backgrounds and stress environments.
The effects of natural fractures on automatic history matching is not negligible, as natural
fractures both affect hydraulic fracture growth and also the probabilistic production
forecast from results of history matching. Wu and Olson (2016) extensively analyzed the
effects of natural fractures on propagation of hydraulic fractures. Yu et al. (2019)
demonstrated the effects of natural fractures on long term productions. However, the
characterization of natural fracture network is difficult. Random spatial generation of
natural fractures could be highly biased and scale dependent. Darcel et al. (2003a) stated
that the natural fractures observed in many outcrops exhibit fractal distributions of their
center locations and power law distributions in their lengths. This observation is
supported by several other authors (Okubo and Aki 1987; Ouillon and Sornette 1996;
Main et al. 1990; Odling 1997). Kim and Schechter (2007) also stressed that the
advantage of fractal theory is scale-independent, which would be more realistic and
unbiased.
11
Chapter 3: Methodology
3.1 INTRODUCTION
The objective of this chapter is to introduce the key steps in the automatic history
matching (AHM) workflow. The major components of the workflow contain Embedded
Discrete Fracture Model (EDFM), reservoir simulator, proxy model and Markov Chain
Monte Carlo sampling (MCMC). Flowcharts and schematic diagrams will be provided to
explain each step.
3.2 AUTOMATIC HISTORY MATCHING (AHM) WORKFLOW
The basic workflow of the automatic history matching is summarized in Figure
3.1. There are four major modules in this workflow: input module (light grey); iterative
optimization module (light yellow); solution module (light green); and post-processing
module (light blue). The input module checks data quality and assures that reservoir
model is correctly configured. It contains three components: field inputs; data treatments
and base model setup. The iterative optimization module generates hundreds of
realizations using artificial intelligence (AI) engine, advanced sampling methods, EDFM
and reservoir simulator. It contains components such as uncertainty identifications; smart
sampling; hydraulic fractures (HFs) and natural fractures (NFs) modelled by EDFM;
reservoir simulator; AI; and Markov Chain Monte Carlo (MCMC) algorithm. Solution
module finds satisfactory results of AHM and obtains characterized parameters. This
module contains: solution filtering; best match; and posterior distribution. Post-
processing module provides potential guidance to the engineers with pressure drainage
and estimated ultimate recovery information. It contains probabilistic production forecast
and visualizations. In the next few sections, each module is introduced in detail.
12
Figure 3.1: General illustration of automatic history matching workflow.
13
3.3 INPUT MODULE
In this section, the input module of the automatic history matching workflow is
briefly introduced. The function of this module is to receive data, inspect and treat the
data, and prepare a base case model that is error free and also computationally efficient so
that the no problems will be encountered when the next module (iterative optimization
module) is executed.
3.3.1 Field Inputs
For shale reservoirs, significant amount of engineering and monitoring data is
available. However, not all of the available data could be used in the AHM workflow.
The most important input data for the AHM workflow is the production data. Such data
mainly includes production monitoring dates, gas flow rate, water flow rate, wellhead
pressure (WHP), bottomhole pressure (BHP), etc. for shale gas reservoir and an
additional oil flow rate for shale oil reservoir. Some of the other data might also be
inputted in the AHM workflow, such as geological model with heterogeneities,
characterized natural fracture/faults network by geologists, microseismic events, etc.
3.3.2 Data Treatments
The bottomhole pressure available in the field inputs are usually based on the
computation from rate transient analysis (RTA), which could have significant errors
associated. Preferable methods to obtain accurate bottomhole data include bottomhole
pressure monitors, or transformation of surface pressure to bottomhole pressure using
wellbore model. However, these two methods are either unavailable or too costly in most
of the shale projects. Therefore, we proposed a simplistic approach to estimate
bottomhole pressure:
14
𝑊𝐺𝑅
𝐵𝐻𝑃 = 𝑊𝐻𝑃 + ∆𝑃 ∗ (3.1)
𝑊𝐺𝑅𝑚𝑎𝑥
where 𝐵𝐻𝑃 is bottomhole pressure, 𝑊𝐻𝑃 is wellhead pressure, ∆𝑃 is an empirical
constant pressure loss, 𝑊𝐺𝑅 is the water gas ratio, and 𝑊𝐺𝑅𝑚𝑎𝑥 is the maximum
water gas ratio observed over the history period.
In addition to the treatment of pressure data, it is also very important to inspect
the fluid flow rate data. It is acceptable to keep shut-in intervals if these intervals are
situated in the middle of the total history period. However, they should be removed if
they are situated near the end of the history period, because they increase the
computational costs for simulations and provides less useful information.
3.3.3 Base Model Setup
After we completed the input and preparation of relevant data, it is crucial to build
a simulation model base case. Arbitrary values could be assigned to fracture geometrical
properties, petrophysical properties, etc., some of which will later become uncertain
parameters. The purpose of this component is not to get a match with the production data,
but rather to make sure the reservoir simulation runs error free and the total
computational time is controlled within 10 to 30 minutes. By setting up the base model,
the iterative optimization module will run smoothly, and hundreds of or even thousands
of realizations could be achieved within reasonable amount of time.
Another significance of base model is to perform pre-checks for uncertainty
identifications. If the combination for the base model results in huge deviations of
simulation responses compared with actual production, we know that we either
underestimate or overestimated the parameters, and this prior knowledge would
somewhat guide the uncertainty identification process in the next module.
15
3.4 ITERATIVE OPTIMIZATION MODULE
In this section, each component of the iterative optimization module of the
automatic history matching workflow is explained in detail. The function of this module
is to selectively create massive number of realizations using artificial intelligence (AI)
engine, advanced sampling methods, EDFM and reservoir simulator. The principles and
algorithms of this module is described below.
3.4.1 Uncertainty Identifications
Based on the field experience and combinations of the base model, some of
reservoir/fracture/petrophysical parameters should be regarded as uncertain parameters
for automatic history matching process to characterize. The rest of the parameters could
be regarded as fixed/constant parameters, if they are not sensitive to dynamic production,
or information regarding these parameters are given/implied from other sources.
Parameters that the workflow current can assign to be either fixed/uncertain are listed in
Table 3.1. In this table, we also listed the sources of information that can provide some
suggestions regarding the sampling range if the corresponding parameter is set to be
uncertain. In general, numerical intervals of these ranges highly depends on the
unconventional reservoir type (gas or oil), depths intervals (deep, >3000 m or shallow,
<2000 m), geological structure (thin or thick net pay) and engineering designs (proppants,
pumping schedule, cluster/stage spacing). It is noteworthy to point out that for shale
reservoirs, the fracture closure phenomenon is very important to be modelled. This
physical phenomenon is simplified by incorporating a fracture permeability decay factor.
This variable reduces the equivalent fracture permeability if the matrix pressure is
lowered. The equation used to model this phenomenon is

′
𝑘 ′ = 𝑘𝑃𝑖 𝑒 −𝛽(𝑃𝑖 −𝑃 ) (3.2)
16
where 𝑘 ′ is the reduced permeability at a specific reservoir pressure, 𝑘𝑃𝑖 is the original
permeability at initial reservoir pressure, 𝛽 is the fracture permeability decay factor, 𝑃𝑖
is the initial reservoir pressure, and 𝑃′ is a specific reservoir pressure after production
begins. Figure 3.2 graphically illustrates the concepts of fracture closure and permeability
decay factor. At deeper depth, the fracture is expected to close more easily, and thus a
steeper fracture permeability decline curve would be appropriate.
General
Parameters Sources of information
classification
Matrix permeability DFIT/core data
Matrix properties Matrix porosity Well logging
Matrix water saturation Field experience
Fracture height DFIT/microseismic
Fracture half-length Microseismic
Fracture water saturation Empirical value
Fracture conductivity DFIT/experience
Fracture properties
Fracture aperture Usually fixed
Cluster efficiency Field experience
Fracture permeability decay
Depth interval
factor
Exponent of water relative
Empirical value
permeability curve
Endpoint of water relative
Relative Empirical value
permeability curve
permeability
Exponent of gas relative
properties Empirical value
permeability curve
Exponent of oil relative
Empirical value
permeability curve
Number of natural fractures Regional geology
Length of natural fractures Regional geology
Conductivity of natural
Natural fracture Regional geology
fractures
properties
3D fractal dimension Regional geology/Image Log
3D length dimension Regional geology/Image Log
3D alpha regulator Regional geology/Image Log
Table 3.1: Summary of significant parameters that is supported by AHM workflow.

17
Figure 3.2: Graphical illustration of the permeability decay and fracture closure
concepts. (Glover et al. 2015)
3.4.2 Smart Sampling
In order to obtain representative realizations from the iterative optimization
module and guarantee accurate results from solution module, we must perform an initial
sampling process. In addition, this sampling process must be smart enough to fully
consider the uncertainty space constructed by the possible combinations of the specified
uncertain parameters.
Shams (2016) has already discussed different types of sampling methods for the
initial sampling process. However, in our proposed workflow, the highly efficient Latin
Hypercube method is applied. The reason for this choice is because other methods, such
as factorial designs/space-based designs/sequence-based designs, require huge number of
samples to be representative, but Latin Hypercube (LH) method only requires 2k number
of samples to be indicative of the uncertain space, where k is the total number of
uncertain parameters. Actually, a greater number of uncertain parameters require a
greater number of samples, but 50 initial samples are deemed to be enough, based on the
18
balance between precision and time cost to run the reservoir simulation of these initial
samples.
The principle of the LH method is summarized next. First, the range for each of
the specified uncertain parameters is divided into N sub-intervals. Then, random samples
are drawn and only one sample is allowed to be drawn from each high dimension sub-
space. These samples are drawn in a way that no repeated samples are enclosed in the
same sub-interval for any uncertain parameters. Figure 3.3 schematically illustrates this
method. The black grids represent selected samples and notice two samples that share the
same column or row with each other is non-existent. The advantage of this method is that
a minimal number of generated samples can have a wide distribution across the entire
uncertainty space, so that the samples are not biased, or too stochastic.
Figure 3.3: Schematic illustration of the Latin Hypercube sampling method. (Shams
2016)
3.4.3 EDFM with Hydraulic Fractures
Based on the results from smart sampling, we need to input hydraulic fractures in
the model first. The main procedures for inputting hydraulic fractures are summarized in
Figure 3.4. First, we need to read in the well trajectory information and perforation
19
report. Then, according to geology-related information and also the sampling results of
the uncertain parameters, dip/strike/tilting angles are inputted as fixed variables while
half-length, height and heel bias information is given by one single realization of AHM
workflow. Next, the coordinates of all the perforation points are linearly interpolated
based on the X, Y, and Z, measured depth (MD) values of two adjacent well trajectory
points, and the equation is given as
ℎ 𝑡 ℎ)
𝑥𝑝 = 𝑥𝑤 + (𝑥𝑤 − 𝑥𝑤 ∗𝑟
ℎ 𝑡 ℎ
𝑀𝐷𝑝 − 𝑀𝐷ℎ (3.3)
{ 𝑦𝑝 = 𝑦𝑤 + (𝑦𝑤 − 𝑦𝑤 ) ∗ 𝑟 , 𝑟=
ℎ 𝑡 ℎ)
𝑀𝐷𝑡 − 𝑀𝐷ℎ
𝑧𝑝 = 𝑧𝑤 + (𝑧𝑤 − 𝑧𝑤 ∗𝑟
where 𝑥𝑝 , 𝑦𝑝 , and 𝑧𝑝 are the X, Y, and Z coordinates of any perforation point,

ℎ
𝑥𝑤 , 𝑦𝑤ℎ , and 𝑧𝑤
ℎ
are the X, Y, and Z coordinates of the adjacent well trajectory point
𝑡
toward heel side, 𝑥𝑤 , 𝑦𝑤𝑡 , and 𝑧𝑤
𝑡
are the X, Y, and Z coordinates of the adjacent well
trajectory point toward toe side, 𝑟 is the interpolation ratio, and 𝑀𝐷𝑝 , 𝑀𝐷ℎ , and 𝑀𝐷𝑡
are the measured depths of perforation point, adjacent well trajectory point toward heel
side, adjacent well trajectory point toward toe side, respectively.
Next, the coordinates of the two endpoints of the fracture’s middle axis are
calculated based on the interpolated perforation locations, using following equations:
𝑥𝑚𝑎 = 𝑥𝑝 ± 𝑥𝑓 ∗ cos(𝑡𝑖𝑙𝑡𝑖𝑛𝑔) ∗ cos(𝑠𝑡𝑟𝑖𝑘𝑒)

(3.4)
{ 𝑦𝑚𝑎 = 𝑦𝑝 ± 𝑥𝑓 ∗ cos(𝑡𝑖𝑙𝑡𝑖𝑛𝑔) ∗ sin(𝑠𝑡𝑟𝑖𝑘𝑒)
𝑧𝑚𝑎 = 𝑧𝑝 ± 𝑥𝑓 ∗ sin(𝑡𝑖𝑙𝑡𝑖𝑛𝑔)
where 𝑥𝑚𝑎 , 𝑦𝑚𝑎 , and 𝑧𝑚𝑎 are the coordinates of the two endpoints of the fracture’s
middle axis, 𝑥𝑓 is the half-length of the bi-wing planar hydraulic fracture, tilting is the
angle between x-y plane and the middle axis (refer to Figure 3.5b), and strike is the angle
between positive x-axis and middle axis (refer to Figure 3.5d).
20
Then, the coordinates of the four vertices of the planar hydraulic fracture is
computed based on the calculated 𝑥𝑚𝑎 , 𝑦𝑚𝑎 , and 𝑧𝑚𝑎 and geometrical projections of the
vertices pair on the same side of the wing on x-z and x-y planes, as shown in Figure 3.5c
and Figure 3.5d:
𝑥𝑣 = 𝑥𝑚𝑎 ± 0.5ℎ𝑓 ∗ cos(𝑑𝑖𝑝) ∗ cos(𝑠𝑡𝑟𝑖𝑘𝑒) + |0.5ℎ𝑓 ∗ cos(90° − 𝑡𝑖𝑙𝑡)|

(3.5)
∗ sin(𝑑𝑖𝑝) ∗ sin(𝑠𝑡𝑟𝑖𝑘𝑒)
𝑦𝑣 = 𝑦𝑚𝑎 ± 0.5ℎ𝑓 ∗ cos(𝑑𝑖𝑝) ∗ sin(𝑠𝑡𝑟𝑖𝑘𝑒) − |0.5ℎ𝑓 ∗ cos(90° − 𝑡𝑖𝑙𝑡)|
∗ sin(𝑑𝑖𝑝) ∗ cos(𝑠𝑡𝑟𝑖𝑘𝑒)
{ 𝑧𝑣 = 𝑧𝑚𝑎 ± |0.5ℎ𝑓 ∗ cos(𝑡𝑖𝑙𝑡)| ∗ sin(𝑑𝑖𝑝)
where 𝑥𝑣 , 𝑦𝑣 , and 𝑧𝑣 are the coordinates of the four vertices of the hydraulic fracture,
ℎ𝑓 is the hydraulic fracture height, dip is the angle between hydraulic fracture plane and
x-y plane. Then, these coordinates are outputted and also natural fractures’ coordinates if
they are available.
Figure 3.4: Summary of the workflow for inputting the hydraulic fractures in arbitrary
gridding system.
21
(a) 3D view (b) y-z plane view
(c) z-x plane view (d) x-y plane view
Figure 3.5: Graphical illustration of the variables and definitions used for inputting the
hydraulic fractures in arbitrary gridding system.
3.4.4 EDFM with Natural Fractures
Once the hydraulic fractures are successfully inputted into the reservoir model, we
can then add the background natural fractures in the model. There are generally three
ways to include natural fractures in our workflow. The first one involves a fixed or
characterized natural fracture network. This could come from a random distribution, or
22
from the field geologist working on the project. This method is deterministic and cannot
consider the associated uncertainty with natural fractures. The second method generate
random realizations of total number, length, and conductivity of the natural fractures
within the coordinate ranges of the model, with single/multiple sets of fixed dip and
strike angles. This method is probabilistic to properly consider the uncertainty associated
with natural fractures, but it is deemed to be too stochastic with high randomness. The
last method involves the use of 3D fractal theory. Darcel et al. (2003a) proposed that
natural fracture networks in nature, as observed in various outcrops, follow two unique
geometrical patterns: fractal distributions of fracture centers and power law distributions
of lengths. Hence, this method is beneficial because it is more realistic than the second
method, which lacks physical basis. The equation for fractal controlled natural fracture
density is (Kim & Schechter 2007):
3+𝐷
Γ ( 2 𝑙) (3.6)
𝑛(𝑙, 𝐿)𝑑𝑙 = 𝛼3𝐷 𝐿𝐷𝑐3𝐷 𝑙 −(𝐷𝑙3𝐷+1) , 𝛼3𝐷 = 𝛼√𝜋
2+𝐷
Γ ( 2 𝑙)
where 𝑛(𝑙, 𝐿) is the density of natural fractures given a minimum fracture length of 𝑙
and a model scale of 𝐿, 𝛼3𝐷 is the 3D alpha regulator are derived from 2D fractal
parameters, 𝐷𝑐3𝐷 is the 3D fractal dimension number, 𝐷𝑙3𝐷 is the 3D length dimension
number, 𝛼 is the 2D alpha regulator that controls natural fracture density, Γ is the
gamma function, and 𝐷𝑙 is the 2D length dimension number. The power law distribution
of the natural fracture can then be back-interpolated by this equation. Figure 3.6
schematically shows the effects of fractal and length dimensions on the spatial
distributions of natural fracture network in 2D and 3D.
23
(a) 2D fractal (b) 3D fractal
Figure 3.6: Graphical illustration of the fractal theory and the effects of different fractal
parameter on natural fracture network: (a) 2D fractal; (b) 3D fractal. (Darcel
et al. 2003b). The D is fractal dimension and a is length dimension.
3.4.5 Reservoir Simulator
After the preprocessing of both hydraulic and natural fractures in the reservoir
model using EDFM preprocessor, the reservoir simulations will be performed. The non-
intrusiveness of the EDFM preprocessor allows us to execute the simulations using any
of the third-party simulation software, including CMG, ECLIPSE, NEXUS, and etc. In
our proposed workflow, the black oil simulator – CMG’s IMEX is utilized. We did not
select the CMG’s compositional simulator – GEM because of its high computational
costs. One key aspect that needs to be considered is the Langmuir isotherm gas
desorption and absorption phenomenon that is unique for shale gas simulation. The
equation for this phenomenon is
𝐾 ∙ 𝑃𝑚
𝛼𝑎𝑑𝑠 = 𝜌(1 − 𝜙)𝑉̅𝑚𝑎𝑥 ( ) (3.7)
1 + 𝐾 ∙ 𝑃𝑚
24
where 𝛼𝑎𝑑𝑠 is the unit fractional adsorption, 𝜌 is the rock density, 𝜙 is the matrix
porosity, 𝑉̅𝑚𝑎𝑥 is the maximum volume of absorbed gas per unit mass of rock, 𝐾 is the
inverse Langmuir pressure, and 𝑃𝑚 is the matrix pressure.
3.4.6 Artificial Intelligence (AI)
Figure 3.7: Simplified schematic structure of XGBoost algorithm.
After we finished the EDFM preprocessing and reservoir simulations, we need to
establish the artificial intelligence engine using proxy models. The purpose of proxy
model is to establish a relationship between simulation input and output, so that it can
mimic a reservoir simulator and avoid actual simulation runs. There are many machine
learning algorithms that construct regression model on non-linear problems, including K-
nearest neighbor (KNN), deep neural network (DNN), polynomial, kriging, etc. However,
in our proposed workflow, the proxy model called XGBoost is adopted.

25
XGBoost is actually an advanced agglomeration of several machine learning
algorithms and methods. It has a basis in gradient boosting, which is an ensemble of
machine learning models that optimize the objective function collaboratively. The
ensemble learning models embedded in XGBoost are the regression decision trees, which
is predicts the outcome based on several inputs using the tree algorithms. A simplified
schematic structure for the XGBoost is provided in Figure 3.7. One unique feature about
XGBoost is the objective function is additive and customized, so that the loss function
could be very efficiently optimized. This is represented by (Bentéjac et al. 2019):

𝑁 𝑀
𝐿𝑋𝐺𝐵 = ∑ 𝐿(𝑦𝑖 , 𝐹(𝑥𝑖 )) + ∑ Ω(ℎ𝑚 ) (3.8)

𝑖=1 𝑖=1
where 𝐿𝑋𝐺𝐵 is the overall loss function, 𝑁 is the total training size, 𝐿(𝑦𝑖 , 𝐹(𝑥𝑖 )) is the
loss function value at data point i given input data of xi and output data of yi, 𝑀 is the
total number of sub-loss function, and Ω(ℎ𝑚 ) is the regularization function, which is
closely related to the tree structures.
As outlined by Malik et al. (2020), there are several advantages of XGBoost. The
model has a build-in cross validation methods, which prevents excessive overfitting
issues common among machine learning models. It also has some embedded search
algorithm to partially aid the selection of hyperparameters. The code structure is
constructed using parallelization and widely supported by different programming
languages. XGBoost also has a spare-awareness algorithm, which properly handles
missing data. In general, the implementation of neural network is optimal when the size
of the available data is massive. For the ill-posed history matching problem, the data size
is limited because of the limited computational time we assign to the task. Therefore, the
26
XGBoost algorithm would relatively converge faster and have better accuracy than neural
network over smaller amount of data (Sejdinovic 2015).
The exact method we utilized the proxy model is to use the model to predict the
values of selected representative time locations along the history data. The input of the
proxy model would be combinations of the uncertain parameters’ combinations, and the
output of the proxy model would be the value of different response variable (water flow
rate, bottomhole pressure, etc.) at a single time location. Usually 10 proxy locations are
selected, so for each of the response variable, 10 proxy models are built. For shale gas
reservoir, we generally select BHP and water flow rate (or water gas ratio) to be the
response variables to be predicted by proxy models, while for shale oil reservoir, an
additional variable of oil gas rate is incorporated. To measure the error of the multi-proxy
models or actual simulation run for each response variable, we calculate the objective
function as
𝑦𝑖,𝑚𝑜𝑑𝑒𝑙 − 𝑦𝑖,ℎ𝑖𝑠𝑡
∑𝑝𝑖=1 | × 100| × 𝑤𝑖 (3.9)
𝑦𝑖,ℎ𝑖𝑠𝑡
𝐹𝑗 =
∑𝑝𝑖=1 𝑤𝑖
where 𝐹𝑗 is the objective function value for response variable j, p is the total proxy
locations selected for the response variable j, i is the index of the proxy location, 𝑦𝑖,𝑚𝑜𝑑𝑒𝑙
is the value of the response variable j at time i from either simulation run or proxy model,
𝑦𝑖,ℎ𝑖𝑠𝑡 is the value of the response variable j at time i from actual history data, and wi is
the weight assigned to the proxy point i, given a response variable j. Similarly, the global
objective function is calculated in a similar way (just sum up all response variables). The
global objective function value will be used in the next component (MCMC), and the
individual objective function value will be used in the solution module.
27
3.4.7 Markov Chain Monte Carlo (MCMC) Algorithm
Figure 3.8 highly summarizes the entire procedure of the MCMC algorithm used
in the iterative optimization module. First of all, we start at the step of initial 𝜃, which is
the combination of uncertain parameters from the smart sampling component with lowest
global objective function value computed by Equation 3.9.
Next, we proceed into an iterative feature that repeats one hundred thousand steps
and a check is performed to see if the iterations reaches the maximum steps. If not, we
proceed to disturb the initial combination 𝜃 to a proposed combination 𝜃 ∗ with a small
change called “walk distance” as 𝛿. Next a step acceptance ratio, a*, is calculated as
(𝜀 ∗ )2 −𝜀 2
∗
𝑎 = min {1, 𝑒 2𝜎2 } (3.10)
where 𝜀 ∗ is the global objective function of the proposed, disturbed combination of
uncertain parameters, 𝜀 is the global objective function of the previous (in this case
initial) combination of uncertain parameters, 𝜎 2 is the variance of the global objective
function values for the smart sampling results. The multi-proxy model is embedded in
this step to predict the values of response variables for all of the locations designated
previously and thus help us obtain the value for 𝜀 ∗ .

Then, the step acceptance ratio is checked with a random number between 0 and
1. If the ratio is greater than this number, the proposed combination is accepted as the
new sample. Otherwise, the old combination is regarded as the new sample. The
procedure then repeats, and a new walk distance is assigned, until maximum steps is
reached.
After the maximum step is reached, we check with the overall acceptance ratio
and see if it is between the empirical range of 15% to 50%. If this criterion is not
28
satisfied, we redo the previous steps by adjusting the variance value used in Equation
3.10 using an adjusting ratio, which usually falls between 2 to 10. Otherwise, we can
proceed to the next step and remove the initial 20% of the generated samples, which is
called “burn-in” period. This is done because the initial samples have a larger bias and is
not representative of the true posterior distribution. The remaining 80% of the samples
are thus the outputs from the MCMC algorithm. However, we only filter out 25 samples
with minimum global objective function values to be validated with the reservoir
simulator to optimize the accuracy.
Figure 3.8: Simplified schematic structure of Markov Chain Monte Carlo algorithm.
This brief explanation about MCMC concludes the principles for the iterative
optimization. In general, the quality of the multi-proxy model built from the smart
29
sampling process is poor. However, as MCMC procedures continue and actual validation
cases accumulate, the multi-proxy model will gradually improve qualitatively. Based on
our history matching experience, a maximum iteration number of 10 for this module is
sufficient to capture representative realizations of the reservoir, if the number of total
uncertain parameters is around 10 or below. However, as much as 20 iteration steps could
be run to guarantee superior accuracy, most robust characterizations of uncertainties, and
if the uncertain space is more complex (more than 10 uncertain parameters).
3.5 SOLUTION MODULE
In this section, we discuss each component of the solution module of the
automatic history matching workflow. The function of this module is to filter out optimal
ensemble of history matching solutions, obtain the most representative match with the
lowest global error, and obtain the final posterior distributions for various uncertain
parameters. Concise descriptions of each component are given below.
3.5.1 Solution Filtering
Once the iterative optimization module is finished, hundreds of actual simulation
results are available. However, some of results will still have high values of global
objective function, and it would be much less flexible if we use global function values to
treat all the simulations. Therefore, we need to selectively filter the history matching
results by using different threshold for each individual objective function. Simulation
cases whose values of individual objective functions satisfy all of the thresholds will be
grouped as the final history matching solution ensembles. Based on experience, the
threshold for bottomhole pressure’s objective function is much stricter than the one for
water flow rate/ water gas ratio, because significant data quality issues are associated
30
with water production due to the water flow back phenomenon. Compared to overly
deterministic traditional history matching methods, this ensemble of solutions greatly
considers the uncertainties associated with the ill-posed history matching problem.
3.5.2 Representative Best Match
There is a one optimal history matching solution with the lowest global objective
function value from the ensemble of the history matching solutions. However, one
problem exists with this best match model. For some of the uncertain parameters, it is
possible that this optimal model is not lying close to the statistical P50 values of the
solution ensembles, as shown in Figure 3.9. This presents a statistical bias, since the best
match model cannot catch the variability associated with the uncertainty space, as P50
value is defined to be the most likely value in any arbitrary distributions. Therefore, in
our workflow, the best match model is generated around the P50 values of the filtered
solution ensemble, to fully be as statistically representative as possible.
Figure 3.9: Illustration of deviation of original best match (left) model’s fracture height
to the P50 value (right) of the history matching solution ensemble.
31
3.5.3 Posterior Distribution
Once the solution ensembled is filtered and the representative best match model is
obtained, the visualization for posterior distributions can be achieved, as shown in the
right plot of Figure 3.9. Given the specific uncertain range, the histograms of the
distributions of the solution ensemble is plotted as the orange bars, and the representative
best match is shown as the red vertical line. The prior distribution, which is assumed to
be uniform in our workflow, is also plotted and shown as grey bars. Lastly, we included
the cumulative probability function based on the histograms as dashed curve to help us
judge the shape of the posterior distributions.
3.6 POST-PROCESSING MODULE
After history matching part is finished, we can proceed to conduct the
probabilistic analysis of ultimate estimated recovery (EUR) for the filtered solutions and
also visualize the pressure drawdown in the representative best match model, for both
matrix and fractures. This module’s function is intended for the work described above.
3.6.1 Probabilistic Production Forecast
After the history matching period and depending on the length of history, we need
to assign BHP drawdown schedule for the production forecast. If the length of history is
very short (around or less than 3 months), we assign a gradual drawdown from the last
BHP value of the history period to a minimum BHP constraint (usually between 1 to 2
Mpa) over a period of time, which depends on the decline rate of BHP in the history
period. We could also assign a direct BHP drop to the minimum constraint if the length
of history is long. Then, the production will continue until a total simulation time of 20
years is achieved. The EUR for both gas phase and water phase will be computed from
32
the reservoir simulator. The process is probabilistic because the work is repeated for the
entire solution ensemble and the representative best match, instead of a deterministic
approach for single model EUR usually observed in conventional methods. This
component provides important appraisal of the productivity of the studied shale reservoir.
3.6.2 Visualizations
The last step in our workflow would be the visualizations of pressure drawdown
in the both the matrix and fracture media. For both structural gridding system and corner
point gridding system, our workflow is able to extract the pressure drawdown
information. The ability of various visualizations enables us to dynamically capture the
connectivity of natural fractures, study the drainage extents of the hydraulic fractures.
These provides invaluable guidance towards well spacing optimization and future
refracturing job designs.
33
Chapter 4: Application of Automatic History Matching to Corner-Point
Gridding System in Shale Reservoirs
4.1 INTRODUCTION
The objective of this chapter is to demonstrate how the automatic history
matching workflow can be applied to a field-scale, single well corner-point gridding
model from an actual shale gas field. The chapter consists of sequential explanations of
steps necessary to complete the study, including basic reservoir model description,
fracture configuration preprocessing, uncertain/constant parameters identifications,
history matching and production forecast. We utilized the automatic history matching
module, which is composed of Markov chain Monte Carlo algorithm coupled with
XGBOOST proxy model, along with Embedded Discrete Fracture Model (EDFM) and
the corner-point gridding extension module to perform the study. The workflow is
applied to an actual shale gas well in Sichuan Basin in China with 334 days of production
history. The gas flow rate and water flow rate information are available, while the
bottomhole pressure information is derived from a special relationship between wellhead
pressure (WHP) and bottomhole pressure.
4.2 RESERVOIR MODEL
This field case contains a single well with a horizontal section length of around
2000 m. Since the model is in corner point gridding system, the well is deviated and is
observed to pass through several geological layers. We assumed water saturation and
permeability to be homogeneous, while porosity is heterogeneous as characterized by
field geologists. The well was completed with 27 stages of hydraulic fractures with a total
cluster number of 81. Each stage has 3 hydraulic fractures.
34
For this study, we used a static model in corner point gridding system, and there
are 1139 natural fractures (only one characteristic set) inscribed in this model as
described by the geologists. Both a view of the reservoir model and 3D visualization of
well landing location is given in Figure 4.1. Statistical distributions regarding the spatial
configurations of these natural fractures are given in Figure 4.2. We also tabulated Table
4.1 to summarize the spatial information obtained from the geologists. Average length
and height of natural fractures are 66 m and 32 m, respectively, and the mean dip angle is
about 22 degrees. These information imply that the natural fractures have poor
connectivity with both the wellbore and hydraulic fractures and is not well communicated
between vertical layers. This will be discussed in detail in section 4.7. The model
dimension is approximately 1000 m long × 2200 m wide and the thickness varies across
locations and across layers. The shallowest point of the model is around 3194 m and the
deepest point is about 3489 m, as shown in Figure 4.3. The model in z-direction is
upscaled into 10 layers, with average thickness of 30 m, five layers of 6 m, 6.2 m, 4.5 m,
1.53 m, and 9.92 m. The number of grid blocks is 64 and 144 in x and y direction. Basic
reservoir, fractures, and Langmuir isotherm gas desorption properties are summarized in
Table 4.2. The relative permeability curves (Figure 4.4) for modeling gas and water flow
are assumed to be fixed because they affect the dynamic production insensitively. The
heterogeneous porosity field can be visualized in Figure. 4.5.
Statistical Fracture Fracture Azimuth Dip Surface

parameters Length (m) Height (m) (°) (°) area (m2)
Mean 66.2 32.3 268.3 22.1 2248.9
Standard deviation 12.8 7.2 35.8 8.5 918.7
Minimum 47.0 1.5 3.2 1.4 231.6
Maximum 99.5 49.8 358.6 52.3 4951.0
Table 4.1: Summary of statistical information regarding natural fractures in this study.
35
Model parameters Value Unit
Model dimension (x × y) 1000 × 2200 m
Number of grid blocks (x × y × z) 64 × 144 × 10 -
Initial reservoir pressure 70 MPa
Reservoir temperature 150 ℃
Residual water saturation 30% -
Total compressibility 4.35×10-7 kPa-1
Reservoir depth 3194 ~ 3489 m
Well length ~ 2000 m
Number of stages 27 -
Clusters per stage 3 -
Average stage spacing 21 m
Average cluster spacing 17.3 m
Langmuir pressure 7 MPa
Langmuir adsorption volume 3.5 m3/ton
Rock density 2.54 g/cm3
Table 4.2: Summary of basic reservoir, fracture and gas desorption parameters used in
this study.
(a) Top view of deviated well (red) and natural fractures (light blue)
Figure 4.1: continued next page.

36
(b) 3D view of deviated well (red) and natural fractures (light blue)
(c) Regional 3D well landing location
37
(d) Global 3D well landing location
Figure 4.1: Visualizations of basic reservoir and well information in the corner point
gridding system: (a) Top view; (b) 3D view; (c) Regional 3D well landing
location; (d) Global 3D well landing location.
(a) Azimuth angle (b) Dip angle
38
(c) Length (d) Surface area
Figure 4.2: Statistical distributions of spatial configuration properties of natural

fractures characterized by geologist for the reservoir model.
Figure 4.3: Visualization of reservoir dip and depth variations for the bulk field model
(not upscaled).
39
Figure 4.4: Relative permeability curves for modeling gas and water flow for this
reservoir model.
Figure 4.5: Porosity field with heterogeneity in both horizontal directions and vertical
direction of the reservoir model used in this study.
40
4.3 HYDRAULIC FRACTURE GENERATOR IN THE CORNER-POINT GRID MODEL
A non-uniform fracture half-length per stage is assumed in our model. For
example, the two hydraulic fractures closest to subsequent, previous stage are called outer
fractures. The one middle hydraulic fracture is called inner fractures. Usually, outer
fractures have larger half-length than the inner fracture(s) (Figure 4.6b). This design is
significantly more beneficial compared to the traditional design in conventional history
matching work, in which the fractures are assumed to have uniform half-length (Figure
4.6a). This is because the characterized non-uniform half-lengths both honors the fracture
growth modelled by fracture modelling software and provides useful guidance regarding
a more realistic drainage area and thus better understanding of optimal spacing. To
support this statement, we modelled fractures of this well on both one stage and the entire
well using fracture modelling software, as shown in Figure 4.7. We inputted maximum
and minimum horizontal stress of 98 Mpa and 86 Mpa, with a Young’s modulus of 46
GPa and a Poisson’s ratio of 0.24, which are representative of the geomechanical
information for this reservoir. The single stage model provides us with non-uniform
hydraulic fracture half-lengths of 117 m, 73 m, and 99 m. In fact, the proppant
distributions in the stage designed hydraulic fractures tends to be heel-biased, which is
substantiated by the data provided by Wheaton et al. (2017). This implies that the non-
uniformity of the hydraulic fractures’ half-length could be more complex. However,
significant degrees of uncertainties could be introduced to our study if we adopted more
complex half-length geometries, so we assumed only two representative half-lengths (for
outer/inner fractures).
41
(a) Uniform half-lengths
(b) Non-uniform half-lengths
(c) Non-uniform half-lengths with natural fractures
Figure 4.6: Comparison between the conventional hydraulic fracture design and
simplified heel-biased hydraulic fracture design: (a) Uniform half-lengths;
(b) non-uniform half-lengths; (c) Non-uniform half-lengths with natural
fractures.
42
(a) Fracture modelling software output for a single stage
(b) Fracture modelling software output for the entire well
Figure 4.7: Fracture modelling software outputs for the hydraulic fractures modelled in
this study: (a) Single stage; (b) Entire well.
43
Since the actual perforation report for this well is available, the corner point
gridding fracture generation module can be applied directly. Nevertheless, special
attentions must be paid regarding the dip of the reservoir. The region of the reservoir
model near the toe side of the well has a lower dip angle compared with the region near
the heel side. If hydraulic fractures are generated perfectly horizontal to the well bore,
they will grow outside the model and thus affects the results of the simulation, as shown
in Figure 4.8. Therefore, we assigned tilting angles to be approximately 5 degrees near
for the cluster at toe side and linearly increased the tilting angle until the first cluster of
14th stage, which has a tilting angle of 8 degrees. The clusters in the rest of the stages
toward heel side all have tilting angles of 8 degrees. This tilting scheme can be visualized
in Figure 4.9.
(a) Overview
44
(b) Enlarged view
Figure 4.8: Illustration of the problem of creating completely horizontal fractures (light
blue) from the perforation locations: (a) Overview; (b) Enlarged view.
(a) Overview
45
(b) Heel side view
(c) Toe side view
Figure 4.9: Visualization of tilting from the horizontally generated fractures (light blue)
to the fractures that aligns with the dip of the reservoir model (green): (a)
Overview; (b) Heel side view; (c) Toe side view.
46
4.4 UNCERTAIN RESERVOIR AND FRACTURE PARAMETERS IDENTIFICATIONS
We identified eight important parameters to be uncertain parameters to perform
automatic history matching, including matrix permeability, fracture permeability decay
factor, fracture water saturation, fracture height, outer fracture half-length, inner fracture
half-length, fracture conductivity and natural fracture conductivity. These parameters are
deemed to be significant from aspect of engineering and reservoir descriptions. For
example, since the depth of this reservoir is more than 3000 meters, the stress tends to be
high and therefore fractures are more prone to be closed. Thus, we used pressure
dependent permeability to model this effect. The equation for pressure dependent
permeability is given in Equation 3.2. In theory, as many as infinite number of uncertain
parameters can be selected, but it would best to control the total number to be below 10 to
balance proxy efficiency and accuracy and to control non-linear degree of uncertainty
space. The porosity is already defined by the corner-point model, so it is a fixed
parameter. We also fixed the relative permeability curve (shown in Figure 4.4). The
matrix water saturation is assumed to be equal to residual water saturation, and the widths
of hydraulic and natural fractures are assumed to be 0.1 m to properly simulate water
flow back in early production period. Table 4.3 summarizes all the ranges used for the
eight uncertain parameters and deterministic values for the fixed parameters. The ranges
for the eight uncertain parameters are either based on history matching experience
(matrix permeability, conductivities, fracture permeability decay, etc.),
geological/engineering data (microseismic, DFIT, DTS, etc.) or suggestions from
engineers working on this field (fracture height, outer/inner fracture half-lengths). Figure
4.10 and Figure 4.11 contains the information regarding the maximum/minimum
47
pressure-dependent permeability decline and longest/shortest scenario for heel-biased
half-lengths, respectively.
Uncertain Parameters Distribution Minimum Maximum Unit
Matrix permeability Uniform 0.00001 0.001 md

Fracture permeability Uniform 0.0075 0.0425 1/kPa
decay factor
Fracture water saturation Uniform 0.5 0.9 -
Fracture height Uniform 5 20 m

Outer fracture Uniform 50 180 m
half-length
Inner fracture Uniform 20 80 m
half-length
Fracture conductivity Uniform 10 500 md-m
Natural fracture Uniform 1 20 md-m
conductivity
Exponent of water Deterministic 3.09 -
relative permeability
Exponent of gas relative Deterministic 2.86 -
permeability
Endpoint of water Deterministic 0.758 -
relative permeability
Table 4.3: Summary of uncertain parameters, their ranges, fixed parameters, and their
deterministic values used for automatic history matching.
48
Figure 4.10: Visualization of maximum and minimum permeability decline curve.
(a) Minimum outer and inner fracture half-lengths
49
(b) Maximum outer and inner fracture half-lengths
Figure 4.11: Visualization of maximum and minimum half-lengths values for both outer
and inner fractures: (a) Minimum outer and inner fracture half-lengths; (b)
Maximum outer and inner fracture half-lengths.
4.5 AUTOMATIC HISTORY MATCHING
We begin the process of automatic history matching by first designing the
location of proxy prediction points to calculate the objective function, a measure of
relative error, to be fed into the XGBOOST-MCMC algorithm. Usually for
unconventional reservoir with two phase flow, gas flow rate is used constraint as well
instead of flowing bottomhole pressure (BHP). This is because the bottomhole pressure is
interpolated from wellhead pressure (WHP). In this study, the conversion from WHP to
BHP based on a pressure loss correlation is shown in Figure 4.12. A total of 20 proxy
points is assigned for the proxy model to make predictions on bottomhole pressure and
water flow rate, and the location assignments are shown in Figure. 4.13. These included
10 proxies for bottomhole pressure at day 3, 20, 50, 85, 121, 153, 200, 238, 297, and 334
50
(Figure. 4.13a), 10 proxies for water flow rate at day 3, 20, 50, 85, 121, 153, 200, 238,
297, and 325 (Figure. 4.13b). In theory, we can include infinite proxy points, but 10
proxy points choice is considered optimal to balance accuracy and efficiency.
Figure 4.12: Conversion from WHP to BHP used in this study.
(a) Flowing bottomhole pressure

51
(b) Water flow rate
Flowing BHP; (b) Water flow rate.
After determining the ranges of uncertain parameters and the proxy locations, we
can proceed to the first iteration of the history matching by using the Latin Hypercube
sampling process. The 50 initial iteration samples are generated, and their simulation
results are shown in Figure 4.14. Again, we used gas flow rate as constraint for all
simulation runs (shown in Figure 4.14a) because this response is measured relatively
accurately. For one of the samples, the gas flow rate cannot be constrained, probably due
to its’ sub-optimal combinations of uncertain parameters. For water flow rate (Figure
4.14c) and flowing BHP (Figure 4.14f), the current ranges covers the production history,
meaning there are samples both over-estimating and under-estimating the history data.
Therefore, we can proceed to subsequent iterations without modifying the ranges.
52
(a) Gas flow rate
(b) Cumulative gas production
53
(c) Water flow rate
(d) Cumulative water production
54
(e) Water gas ratio
(f) Flowing bottomhole pressure
Hypercube sampling process) and actual production history: (a) Gas flow
rate; (b) Cumulative gas production; (c) Water flow rate; (d) Cumulative
water production; (e) Water gas ratio; (f) Flowing BHP.
55
The automatic history matching process then continued iteratively. For each
iteration, we used single chain of MCMC and a proposal sample size of 20000. The
train:validation set ratio is 8:2, and the proxy model has an epoch size of 5 with a total
epoch number of 600. The maximum loop number for updating sampling variance is 8,
and the overall accept ratio should be between 0.15 and 0.51 for the posterior samples to
pass the filtering test. The variance update ratio is 2 for the chain if the overall accept
ratio is rejected. For the accepted posterior sample ensembles, the 25 samples with the
lowest global errors are selected to be inputted into the reservoir simulator. We also
defined different weight for each proxy location when calculating objective functions.
Proxies of BHP at days 3, 20, 297, and 334 and proxies of water flow rate at days 3, 20,
297, and 325 have weights of 1, while rest of the proxies have weights of 2. At early
period (days 3 and 20), the production is not stabilized, and the data does not necessarily
reflect the response from the reservoir. At late period (days 297+), there are some
fluctuations with the data as reflected in Figure 4.13. These two reasons caused the
weight of these proxies to be lower than the other ones.
For this study, a total of 10 extra iterations is run in addition to the initial iteration
(50 cases). For each of the extra iteration, 25 cases are included, thus giving a total of 300
simulation results. The entire history matching workflow took approximately 15 hours to
finish. We then filtered out the history matching solution out of the 300 simulations based
on one threshold for each of the response variables (flowing BHP and water flow rate).
Objective function threshold values of 10 and 33 are used for BHP and water flow rate,
respectively. The threshold value is stricter with BHP because the quality of BHP
response should be smoother, and issue of water flow back exists. A total of 55 solutions
satisfied the criteria. The number of solutions versus iteration run is visualized in Figure
56
4.15. As can be seen from this plot, the number of solutions first increases and then
decreases, implying that the maximum iteration number could be reduced to improve
efficiency. The simulation responses for these 55 history matching solutions can be
visualized in Figure 4.16. We can observe from this plot that all the history matching
solutions meet the well constraint of gas flow rate. In addition, the results for water flow
rate heavily concentrates near the actual production history, except for the fluctuations at
the late period. The results for pressure also cover the trend of the drawdown decline,
except for the time after the two shut-in periods. This can be explained by the operational
uncertainties associated with shut-in, and the quality of the match could be further
improved if shut-in time could be avoided. These general observations suggest that the
workflow successfully optimized the results compared to the initial iteration’s suboptimal
results. Figure 4.17 shows the simulation results for the best match model, and they
exhibit very satisfactory match with the actual production history.
Figure 4.15: Number of history matching solutions versus iteration number.
57
(a) Gas flow rate
58
(c) Water flow rate
59
(e) Water gas ratio

results and actual production history: (a) Gas flow rate; (b) Cumulative gas
production; (c) Water flow rate; (d) Cumulative water production; (e) Water
gas ratio; (f) Flowing BHP.
60
(a) Gas flow rate
61
(c) Water flow rate
62
(e) Water gas ratio
Figure 4.17: Comparison between best match’s simulation results and actual production
history: (a) Gas flow rate; (b) Cumulative gas production; (c) Water flow
rate; (d) Cumulative water production; (e) Water gas ratio; (f) Flowing BHP.
63
The information regarding the best match model is given below. Matrix permeability is
38.1 nano-darcy (nd), fracture permeability decay factor is about 0.0249 and the decline
curve can be visualized in Figures 4.18 and 4.20. As can be implied from the
permeability decay curve, the degree of fracture closure is pronounced because the
fracture permeability multiplier reaches 0.18 when pressure drops to atmospheric
pressure (the range for this parameters produced a maximum multiplier of 0.6 to a
minimum multiplier of 0.05). Fracture water saturation is about 0.853 and fracture height
is 8.62 m. The outer fracture and inner fracture half-lengths are 130 m and 54.3 m,
respectively (visualized in Figure 4.19). Finally, conductivities of hydraulic fracture and
natural fractures are 90.8 md-m and 10.7 md-m. This best match model is generated
around the P50 values of all 55 history matching solutions to consider the effects of
uncertainties. From the plot, we can observe that the solution ensembles for matrix
permeability, fracture height, and fracture conductivity are more concentrated on the
lower end of their ranges, while solution ensembles for fracture water saturation and
outer fracture half-length are more concentrated on the higher end of their ranges. These
uncertain parameters more sensitively affect the dynamic production. However, other
parameters are less sensitive because any values within their ranges can compose the
solution ensembles. Usually, the half-length for hydraulic fractures are considered very
sensitive parameter. Nevertheless, in this study, the inner fractures with lower half-
lengths have less contributions to the production and are thus less sensitive. Parallel
coordinates plot is drawn in Figure 4.21 and it can also prove that the abovementioned
statements. More sensitive parameters should have solution ensemble lines passing
through focused part of the corresponding vertical coordinates, and less sensitive
parameters should have solution ensemble lines spanning the entire vertical coordinates.
64
(a) Matrix permeability (b) Fracture permeability decay factor
(c) Fracture water saturation (d) Fracture height
(e) Outer fracture half-length (f) Inner fracture half-length
65
(g) Hydraulic fracture conductivity (h) Natural fracture conductivity
saturation; (d) Fracture height; (e) Outer fracture half-length; (f) Inner
fracture half-length; (g) Hydraulic fracture conductivity; (h) Natural fracture
conductivity.
(a) Non-uniform half-lengths

66
(b) Fracture height
Figure 4.19: Characterized fracture geometry from AHM workflow: (a) Non-uniform
fracture half-lengths; (b) Fracture height.

matching solutions and the best match model.
67
Figure 4.21: Parallel coordinate plot to visualize combinations of uncertain parameters,
including non-history matching solutions (light grey); history matching
solution (light orange); and best match solution (red).
In order to gauge the accuracy and precision of the workflow, we plotted the
values of the two response variables (water flow rate and BHP) at the last proxy location
for both proxy model and the actual simulation runs (Figure 4.22a, b). In addition, the
objective function value for water flow rate and BHP, and global relative error are also
plotted, as shown in Figure 4.22c, d, e. Iteration 2, 4, 6, 8, and 10 are selected so that the
improvement of proxy model could be visualized along with progression of iterations.
From Figure 4.22, it is well perceived that the value of response variables tends to be
more consistent between proxy prediction and simulation runs, as training data for proxy
model accumulates. Furthermore, the number of maximum iteration could be reduced to
8, since the objective functions and global errors can be optimized at iteration 8.
68
(a) Water flow rate at 325 days
(b) Flowing bottomhole pressure at 334 days
69
(c) Water flow rate relative error
(d) Flowing bottomhole pressure relative error
70
(e) Global relative error
proxy model and simulation results for iteration 2, 4, 6, 8 and 10: (a) Water
flow rate at 325 days; (b) Flowing BHP pressure at 334 days; (c) Water flow
rate relative error; (d) Flowing BHP relative error; (e) Global relative error.
We conclude this history matching section with the visualizations of values of
uncertain parameters and global error versus simulation cases (In Figure 4.23, red circles
are AHM solutions). From Figure 4.23a, c, we can conclude that the matrix permeability
and fracture water saturations are very sensitive to the dynamic production. Figure 4.23d,
e, g substantiates that fracture height, outer fracture half-length and hydraulic fracture
conductivity are also sensitive, but not at same level with matrix permeability and
fracture water saturation. Figure 4.23b, f, h shows that fracture permeability decay factor,
inner fracture half-length and natural fracture conductivity are least sensitive parameters
to dynamic production. Finally, Figure 4.23i shows that the workflow can optimize the
error quickly, and it is sufficient to end the workflow at simulation 8.

71
(c) Fracture water saturation (d) Fracture height
(e) Outer fracture half-length (f) Inner fracture half-length
72
(g) Hydraulic fracture conductivity (h) Natural fracture conductivity
(i) Global error
versus simulation index: (a) Matrix permeability; (b) Fracture permeability
decay factor; (c) Fracture water saturation; (d) Fracture height; (e) Outer
fracture half-length; (f) Inner fracture half-length; (g) Hydraulic fracture
conductivity; (h) Natural fracture conductivity; (i) global error.
4.6 PROBABILISTIC PRODUCTION FORECASTING
Next, we performed production forecasting using the 55 solutions obtained from
the previous section. The BHP drawdown schedule after the history period can be
visualized in Figure 4.24a. This schedule follows a gradual (spanning 9 months) decline
from the BHP value of the last history date of each solution’s simulation result and
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remains at the minimum BHP constraint of 800 kPa until a total simulation time of 20
years is achieved. The reason we adopted this strategy is to avoid sudden increases in
water/gas flow rate right after history period ends. The gas flow rates, cumulative gas
productions, water flow rates, cumulative water productions are provided in Figure 4.24b,
c, d, e, respectively. Although the gas flow rates and water flow rates shows peaks after
production history, the magnitude of this peak is well controlled. For 20-year gas
estimated ultimate recovery (EUR), the P10, P50, P90 and best match values are 114.5,
124.4, 131.3, and 119.0 million cubic meters. For 20-year water EUR, the P10, P50, and
P90 and best match values are 26.7, 28.7, 30.8, and 28.9 thousand cubic meters. Gas
EUR for best match model tends to be little bit lower than the P50 values, and water EUR
is perfectly matching with the P50 values. Indeed, the integration of geology model and
the automatic history matching workflow greatly reduced the uncertain range for both 20-
year gas and water EUR. Without the heterogeneity of porosity, the ranges for these EUR
predictions would span much wider ranges.

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(b) Gas flow rate
(c) Cumulative gas production
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(d) Water flow rate
(e) Cumulative water production
Figure 4.24: Production forecast of 55 history matching solutions: (a) flowing BHP; (b)
Gas flow rate; (c) Cumulative gas production; (d) Water flow rate; (e)
Cumulative water production.
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4.7 NATURAL FRACTURE SENSITIVITY STUDY AND VISUALIZATIONS
After probabilistic production forecast work is completed, we extended the study
to analyze the connectivity of natural fractures and its effects on the pressure drawdown
in both matrix and fractures, drainage volumes and 20-year gas EUR. Figure 4.25 shows
the grouped natural fractures and the total number of natural fractures in each group.
Although the number of connected fractures is high, the communication between these
fractures to near wellbore region is sub-optimal and the number of non-connected
fractures is not negligible. In fact, only 2 natural fractures are connected to the wellbore.
Therefore, the impact of the poor connectivity on gas EUR is profound. To prove this
point, we compared four scenario with different connectivity of natural fractures, which
are no natural fractures; the original dimension of natural fractures; natural fractures’
location preserved but their length and heights are magnified by 1.5 times (Figure 4.26a);
and natural fractures’ location preserved but their length and heights are magnified by 1.8
times (Figure 4.26b). The number of non-connected fractures (grey fractures in Figure
4.26) for 1.5 times magnification and 1.8 times magnification are 237 and 135, meaning
the connectivity significantly improved. In Figure 4.27, we also plotted the matrix
pressure distributions of the eighth layer from the top, where the most proportion of the
well lands in, for these four scenarios. These four models are created using the best match
properties, and the only difference is the presence of natural fractures. It is very
noticeable that for the scenario without natural fractures, the matrix pressure drawdown is
only confined to the region near the wellbore. However, as the presence and connectivity
of natural fractures increase, the pressure drawdown area extends to region far away from
the wellbore. In addition, for the enlarged natural fractures (Figure 4.27c, d), the pressure
drawdown are connected from the 7th layer to 8th layer, as opposed to Figure 4.27a, b
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where the toe side region of 8th layer do not display any drawdown because the well
trajectory penetrated the top layer. Figure 4.28 depicts the drainage volumes for the four
scenarios studied. For no natural fractures and original natural fractures scenarios (Figure
4.28a, b), the drainage volumes are enclosed only in bottom five layers, or only small
portions of top five layers. However, the enlarged natural fracture scenarios exhibit
prominent drainage in top five layers as well. Figure 4.29 describes the pressure
drawdown in all the fractures. The original natural fracture scenario (Figure 4.29b) shows
a very limited network of natural fractures that is connected to hydraulic fractures.
However, with the enlarged natural fractures, a significant network is developed and with
this improved connectivity, more gas could be unlocked from this low permeability shale
reservoir. The comparison between 20-year gas EUR of the four scenarios are shown in
Figure 4.30. The gas EUR for these four scenarios are 90.9, 123.8, 219.5 and 297.1
million cubic meters (or -26.6%, 0%, 77.3%, 140% comparatively if the original scenario
is the base case).
(a) Spatial distribution for different natural fracture groups (color coded)

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(b) Total number of natural fractures in different groups
Figure 4.25: Connectivity analysis of the natural fractures presented in the history
matched model: (a) Spatial distribution for different natural fracture groups;
(b) Total number of natural fractures in different groups.
(a) Magnified 1.5 times in both lengths and heights

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(b) Magnified 1.5 times in both lengths and heights
Figure 4.26: Spatial connectivity analysis of the natural fractures magnified: (a) 1.5 times
in both lengths and heights; (b) 1.8 times in both lengths and heights.
(a) No natural fractures
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(b) Original natural fractures
(c) Natural fractures enlarged 1.5 times in both length and height
(d) Natural fractures enlarged 1.8 times in both length and height
Figure 4.27: Visualizations of the effects of the natural fractures’ connectivity on matrix
pressure distributions after 20 years: (a) No natural fractures; (b) Original
natural fractures; (c) Natural fractures enlarged 1.5 times in both length and
height; (d) Natural fractures enlarged 1.8 times in both length and height.
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drainage volumes after 20 years: (a) No natural fractures; (b) Original
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Figure 4.29: Visualizations of the effects of the natural fractures’ connectivity on fracture
pressure distributions after 20 years: (a) No natural fractures; (b) Original
Figure 4.30: Comparison of 20 year gas estimated ultimate recovery for four different
natural fracture connectivity scenarios.
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4.8 CONCLUSIONS
We developed the automatic history matching workflow by integrating the real
geology model with a modified proxy engine to achieve practicality, efficiency, and
proximity with reality. The workflow performed history match and statistical production
forecast for a real case of shale gas well. In this chapter, we concluded the followings:
1. Our developed workflow accurately executed the history matching of flowing
BHP and water rate for a shale gas well. The workflow found 55 HM solutions
with 8 uncertain parameters from 11 iterations or 300 total simulation runs, which
is around 18%. The total computational time is around 15 hours.
2. The eight posterior distributions were obtained from the workflow. The matrix
permeability, fracture water saturations are considered the most sensitive
uncertain parameter; fracture heigh, outer fracture half-length and hydraulic
fracture conductivity are moderately sensitive; and fracture permeability decay
factor, inner fracture half-length and natural fracture conductivity are least
sensitive.
3. The heterogeneous porosity field reduces the uncertainties associated with the
reservoir and thus improves quality of probabilistic production forecasting. The
non-uniform half-lengths of hydraulic fractures provides valuable benefits
towards optimal well spacing designs and future fracking job designs.
4. The connectivity study of the natural fractures also provides suggestions
regarding inter-well/inter-layer communications.
5. More subsurface data, such as DTS/DAS/etc., could be coupled with our
workflow to further reduce uncertainties and supply field engineers with practical
guidance.
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Chapter 5: Development of Realistic Natural Fracture Module in AHM
by Using Fractal Theory
5.1 INTRODUCTION
Due to the facts that extensive number of natural fractures and faults exists among
the shale gas reservoirs; it is paramount to incorporate natural fractures within the
numerical model. These geological features have huge implications regarding long-term
EUR, well spacing optimization, and fracturing/refracturing job design. Therefore, the
objective of this chapter is to study the effects of natural fractures on the results of history
matching. Instead of random generation of natural fractures with arbitrary fracture
lengths, our workflow utilizes the fractal theory to generate natural fractures in 3D space.
Darcel et al. (2003a) proposed that natural fracture networks in nature, as observed in
various outcrops, follow two unique geometrical patterns: fractal distributions of fracture
centers and power law distributions of lengths. Hence, the proposed workflow is
beneficial because it is more realistic than random natural fracture generation, which
lacks physical basis.
All three main steps in the AHM workflow were performed including parameter
identification, history matching and probabilistic production forecasting. In this study, we
used another shale gas single well with 1626-day historical production data. To optimize
history matching efficiency, we included an extra step to analyze the fractal network’s
connectivity and remove the non-connected fractures from the network. Similar
constraints and BHP pressure conversion from last chapter is performed here.
5.2 RESERVOIR MODEL
The novel workflow is applied to a real shale gas well in Sichuan Basin in China.
We performed the case with both hydraulic fractures and natural fractures. The hydraulic
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fractures are modelled considering the heel bias effect, which means the outer 2 fractures
in each stage have longer half-lengths than the fracture(s) in the middle. This design
actually honors the output characteristics of fracture modelling software, and is deemed
more realistic than simple, planar fractures with uniform half-lengths. For natural
fractures, we inputted the fractal dimension, fractal length dimension and alpha regulator
to be uncertain parameters, meaning that the total number of natural fractures will not be
constant. This field case contains a single well with a horizontal section length of around
1550 m. There is a total of 18 stages of hydraulic fractures with a total cluster number of
54, with a constant clusters per stage of 3. The cluster spacing is approximately 27.78
meters and it is equivalent to stage spacing.
For this study, since the geology model for this reservoir is lacking, we created a
homogeneous, rectangular reservoir model with a dimension of 1700 m long, 800 m wide
and a thickness of 20 m, with numbers of grid blocks in x, y, z dimensions 170, 80, 1
respectively. An example model visualization for the non-uniform hydraulic fractures and
fractal natural fracture scenario are provided in Figure 5.1. The fractal based natural
fractures are fully 3D, meaning that complex dip/azimuth/height distributions are given
for natural fractures. The reservoir has a uniform depth of 2500 m and a residual water
saturation of 0.30, which is equal to matrix water saturation. The initial reservoir pressure
is 44.79 MPa with a temperature of 100 ℃. A long history of 1626 days is available for
history matching. In normal situations, the available history is usually no longer than 1
year. Therefore, the availability of this long production history can truly test the
workflow’s robustness to capture long term production trends. Basic reservoir, fractures,
and Langmuir isotherm gas desorption properties are summarized in Table 5.1. The
relative permeability curves for modeling gas and water flow are assumed to be fixed
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because they affect the dynamic production less sensitively. We adopted non-linear
relative permeability curves for matrix and straight-line relative permeability curves for
fractures. These fixed curves are shown in Figure 5.2.
Model parameters Value Unit

Model dimension (x × y × z) 1700 × 800 × 20 m
Number of grid blocks (x × y × z) 170 × 80 × 1 -
Initial reservoir pressure 44.79 MPa
Reservoir temperature 100 ℃
Residual water saturation 30% -
Total compressibility 4.35×10-7 kPa-1
Reservoir depth 2500 m
Well length 1550 m
Number of stages 18 -
Clusters per stage 3 -
Average stage/cluster spacing 27.78 m
Langmuir pressure 13.26 MPa
Langmuir adsorption volume 2.96 m3/ton
Rock density 2.6 g/cm3
Table 5.1: Summary of basic reservoir, fracture and gas desorption parameters used in
this study.
Figure 5.1: A 3D example model visualizations for the reservoir, hydraulic fractures
(blue) and fractal natural fractures (green) in this study.
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(a) Matrix
(b) Hydraulic fractures
Figure 5.2: Fixed relative permeability used for this study: (a) Matrix; (b) Hydraulic
fractures.
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5.3 CONNECTIVITY ANALYSIS AND EFFICIENCY OPTIMIZATION
To facilitate the efficiency of the workflow, an extra procedure is built into the
workflow. This procedure detects the connectivity between the fractal generated natural
fractures, hydraulic fractures, and wellbore. Only the natural fractures that are connected
to wellbore or hydraulic fractures are preserved for history matching purpose. The rest of
natural fractures that are isolated are removed from the reservoir model to save
computational time. For example, in Figure 5.3, pink fractures are isolated and will be
removed from the model. This procedure should not affect the results of history
matching/ production forecast since negligible contributions from these fractures are
observed. To validate this statement, we used the field production data of actual gas flow
rate as the well constraint for the history period, and then reduced bottomhole pressure
from the last history day stepwise to a minimum of 1000 kPa until 20 years (Figure 5.4a).
Figure 5.4b, c prove that if we remove the non-connected fractures, negligible
discrepancies can be found for long term cumulative gas and water production.
Figure 5.3: Connectivity check and non-connected natural fractures (pink) removal for
faster history matching.
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(a) Bottomhole pressure
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(c) Cumulative water production
Figure 5.4: Illustration of negligible effects from removing non-connected fractures

from the natural fracture network based on fractal theory: (a) Bottomhole
pressure; (b) Cumulative gas production; (c) Cumulative water production.
5.4 PARAMETERS IDENTIFICATIONS
A total of 11 important parameters are determined to be uncertain parameters to
be inputted into the history matching workflow. These parameters include matrix
permeability, fracture permeability decay factor, fracture water saturation, porosity,
fracture height, outer fracture half-length, inner fracture half-length, fracture
conductivity, 3D fractal dimension, 3D length dimension, and 3D alpha regulator. The
first eight parameters are important parameters related to reservoir and engineering, as
stated in Chapter 4. Fractal/length dimensions control the spatial distribution/max-min
length ratio of the natural fractures, and alpha regulator controls the overall natural
fracture density. Therefore, the fractal dimension really provides information regarding
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what degree of randomness is associated with the fractal network, while the length
dimension reflects what ratio of faults and smaller micro-fractures/fissures exists. Darcel
et al. (2003a) states that the fractal dimension ranges between 1.5 to 2 for 2D (2.5 to 3 for
3D), but we focused the range more on lower end because the lower fractal dimension is,
the fractures tend to be less randomly distributed and rather exist in regional clusters. In
addition, the lower the length dimension, the larger is the difference between maximum
and minimum natural fracture lengths. The length dimension range here is designed also
to emphasis the combined effects of both faults and fractures on a smaller scale.
Because the permeability and aperture of natural fracture are much insensitive to
dynamic production, we assume constant values of 50 md and 0.01 m for them. Table 5.2
summarizes all the ranges used for the eleven uncertain parameters and the values for the
constant parameters. The ranges for the first eight uncertain parameters are based on the
experience from the last chapter, since the well in this study is situated in the region very
close to the shale gas well, we studied in the last chapter. The ranges for the fractal
parameters are determined so that the total number of natural fractures (both connected
and isolated) are controlled below 5000 to optimize computational speed. For better
conceptualization of the fractal parameters on natural fractures’ spatial characteristics, we
included sensitivity plots of fractal visualizations in Figure 5.5.
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Uncertain Parameters Distribution Minimum Maximum Unit
Matrix permeability Uniform 0.00001 0.001 md
Fracture permeability decay
Uniform 0.01 0.052 -
factor
Fracture water saturation Uniform 0.5 0.9 -
Matrix porosity Uniform 5% 9% -
Fracture height Uniform 5 20 m
Outer fracture half-length Uniform 50 180 m
Inner fracture half-length Uniform 20 80 m
Fracture conductivity Uniform 10 500 md-m
3D fractal dimension (𝐷𝑓 ) Uniform 2.6 2.8 -
3D length dimension (𝐷𝑙 ) Uniform 2.3 2.6 -
3D alpha regulator (𝛼) Uniform 4 5 -
Exponent of water relative
Deterministic 1.95 -
permeability
Exponent of gas relative
Deterministic 1.8 -
permeability
Endpoint of water relative
Deterministic 0.842 -
permeability
Table 5.2: Summary of uncertain parameters, their ranges, fixed parameters, and their
deterministic values used for automatic history matching.
(a) Df=2.6, Dl=2.45, α=4.5

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(b) Df=2.8, Dl=2.45, α=4.5
(c) Df=2.7, Dl=2.3, α=4.5
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(d) Df=2.7, Dl=2.6, α=4.5
(e) Df=2.7, Dl=2.45, α=4
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(f) Df=2.7, Dl=2.45, α=5
Figure 5.5: Sensitivity plots of varying fractal parameters vs natural fracture

distributions: (a) Df=2.6, Dl=2.45, α=4.5; (b) Df=2.8, Dl=2.45, α=4.5; (c)
Df=2.7, Dl=2.3, α=4.5; (d) Df=2.7, Dl=2.6, α=4.5; (e) Df=2.7, Dl=2.45,
α=4; (f) Df=2.7, Dl=2.45, α=5.
5.5 HISTORY MATCHING
Similar to last chapter, we begin the process of automatic history matching by
converting the WHP to BHP, as shown in Figure 5.6. Next, we selected a total of 20
proxy points for the proxy model to make predictions on bottomhole pressure and water
gas ratio (WGR), and the location assignments are shown in Figure. 5.7. In this study,
WGR was used as the response variable instead of water flow rate because it is less
noisy. The selected proxy locations included 10 proxies for bottomhole pressure at day
30, 90, 226, 374, 500, 745, 1000, 1200, 1400, and 1626 (Figure. 5.7a), 10 proxies for
water gas ratio at day 20, 140, 226, 374, 500, 743, 983, 1200, 1400, and 1623 (Figure.
5.7b). Although the historical data length is much longer than the one in the last chapter,
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we did not increase the proxy points because this would jeopardize computational
efficiency extensively, without many improvements on the results.
Figure 5.6: Conversion from WHP to BHP used in this study.
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(b) Water gas ratio
Flowing BHP; (b) Water gas ratio.
Proceeding in a similar manner as the last chapter, we generated the 50 initial
Latin Hypercube samples, run the simulations for these samples and obtained the
corresponding results, as shown in Figure 5.8. Similarly, gas flow rate is used as
constraint for all simulation. Most initial samples can constrain the gas flow rate very
well, as can be seen from the Figure 5.8a. For water flow rate (Figure 5.8c) and flowing
BHP (Figure 5.8f), the current ranges covers the production history, meaning there are
samples both over-estimating and under-estimating the history data. Even though the
initial samples tend to overestimate flowing BHP, our algorithm should be able to find
optimal solution, as will be proved later in this section.
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(a) Gas flow rate
101
(c) Water flow rate
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(e) Water gas ratio
Hypercube sampling process) and actual production history: (a) Gas flow
rate; (b) Cumulative gas production; (c) Water flow rate; (d) Cumulative
water production; (e) Water gas ratio; (f) Flowing BHP.
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The automatic history matching process then continued iteratively. For each
iteration, we used single chain of MCMC and a proposal size of 30000. The other
parameters for MCMC are kept same as the last chapter. Similarly, differing weights for
each proxy location when calculating objective functions are defined. The first three
proxies of BHP and WGR at have weights of 1, while rest of the proxies have weights of
2. This is because there are huge uncertainties associated with water flow rate data at
early period, due to water flow back. There is also a rapid drop in BHP, meaning the well
is not very stabilized at early period.
Likewise, a total of 11 iterations, or 300 simulations are designed for this study.
The entire history matching workflow took approximately 13 hours to finish. Next,
history matching solutions are filtered out based on objective function threshold values of
35 and 70 for BHP and WGR. Each criterion is relaxed compared to the last chapter,
because more data uncertainties are introduced as production history increases. A total of
52 solutions are filtered out. The number of solutions versus iteration run is given in
Figure 5.9. This figure implies that the quality of proxy model improves progressively
with the iteration number, and the last 2 iterations can be removed to optimize efficiency.
The resulting production curves of response variables for these 52 history matching
solutions can be visualized in Figure 5.10. The figure shows that despite the early
period’s data fluctuations, our workflow is capable to match the late period production
data excellently even though the initial iteration overestimates actual BHP. Figure 5.11
shows the simulation results for the best match model, which proves that our proposed
workflow is robust in history matching production data that spans much longer time
period.
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Figure 5.9: Number of history matching solutions versus iteration number.
(a) Gas flow rate
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(c) Water flow rate
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(e) Water gas ratio
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results and actual production history: (a) Gas flow rate; (b) Cumulative gas
production; (c) Water flow rate; (d) Cumulative water production; (e) Water
gas ratio; (f) Flowing BHP.
(a) Gas flow rate

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(c) Water flow rate
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(e) Water gas ratio
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Figure 5.11: Comparison between best match’s simulation results and actual production
history: (a) Gas flow rate; (b) Cumulative gas production; (c) Water flow
rate; (d) Cumulative water production; (e) Water gas ratio; (f) Flowing BHP.
The following information contains the best match model parameters’ values.
Matrix permeability is 36.2 nano-darcy (nd), fracture permeability decay factor is about
0.0307 and the decline curve can be visualized in Figures 5.12 and 5.14. These results the
equivalent matrix permeability is low and thus the cluster spacing could be further
reduced to maximize recovery. The fracture permeability multiplier reaches 0.25 when
pressure drops to atmospheric pressure, meaning the fracture closure phenomenon is less
severe than the study in Chapter 4. Because the depth of the reservoir in this study is
shallower, and assuming similar fracture job design is applied for both study, the
compaction should be less severe for this study and thus less conductivity loss occurs,
which is corroborated by our results. Matrix porosity is 6.8 %. Compared to the previous
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chapter, in which the model has a greater depth and a lower average porosity between 4-
5%, the obtained porosity is again backed up by physics. The fracture height, outer
fracture and inner fracture half-lengths are 14 m, 65.6 m and 57 m, respectively
(visualized in Figure 5.13). The fracture height is able to grow higher due to shallower
depth, but half-lengths tend to be limited possibly because of the effect of natural
fractures. Therefore, it is very important to rigorously model natural fractures for
geologists. Fracture water saturation is about 0.708 and conductivity of hydraulic
fractures 256 md-m, implying a less severe water flow back problem. Finally, the 3D
fractal dimension, 3d length dimension and 3d alpha regulator characterized are 2.65,
2.58, and 4.29. These results imply that the natural fractures tend to be less randomly
distributed, but the length discrepancy between different scales of natural fractures is low.
There is also a relatively lower density of natural fractures. Parallel coordinates plot is
shown in Figure 5.15, and we see that matrix permeability, fracture height, outer/inner
fracture half-lengths, 3D fractal/length dimensions are more sensitive parameters.
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(c) Fracture water saturation (d) Matrix porosity
(e) Fracture height (f) Outer fracture half-length
(g) Inner fracture half-length (h) Fracture conductivity
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(i) 3D fractal dimension (j) 3D length dimension
(k) 3D alpha regulator
saturation; (d) Matrix porosity; (e) Fracture height; (f) Outer fracture half-
length; (g) Inner fracture half-length; (h) Hydraulic fracture conductivity; (i)
3D fractal dimension; (j) 3D length dimension; (k) 3D alpha regulator.
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(a) Overview
(b) Non-uniform half-lengths
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(c) Fracture height
Figure 5.13: Characterized fracture geometry from AHM workflow: (a) Overview; (b)
Non-uniform fracture half-lengths; (c) Fracture height.

matching solutions and the best match model.
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Figure 5.15: Parallel coordinate plot to visualize combinations of uncertain parameters,
including non-history matching solutions (light grey); history matching
solution (light orange); and best match solution (red).
In order to gauge the robustness of the workflow to catch long term production
trend, we plotted the values of the BHP and WGR at the early period (Figure 5.16a, b),
mid-period (Figure 5.16c, d), and late period (Figure 5.16e, f). In addition, the objective
function value for water flow rate and BHP, and global relative error are also plotted, as
shown in Figure 5.16g, h, i, respectively. Iteration 2, 4, 6, 8, 10 are selected so that the

improvement of proxy model could be visualized along with progression of iterations.
For WGR at 1623 days, the values for water flow rate is almost 0, making the values for
proxy/simulation very low. From Figure 5.16, the proxy quality, especially for BHP
predictions, becomes progressively more accurate. However, the performance of the
workflow could be improved if we stop 2 iterations earlier, at iteration 8.
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(a) BHP at 30 days (b) WGR at 20 days
(c) BHP at 745 days (d) WGR at 743 days
(e) BHP at 1626 days (f) WGR at 1623 days

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(g) BHP relative error (h) WGR relative error
(i) Global relative error
proxy model and simulation results for iteration 2, 4, 6, 8 and 10: (a) BHP at
30 days; (b) WGR at 20 days; (c) BHP at 745 days; (d) WGR at 743 days;
(e) BHP at 1626 days; (f) WGR at 1623 days; (g) BHP relative error; (h)
WGR relative error; (i) Global relative error.
Lastly, we plotted the visualizations of values of uncertain parameters and global
error versus simulation cases (In Figure 5.17, red circles are AHM solutions). This figure
proves our previous statements about sensitivities of the various uncertain parameters.
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For global error (Figure 5.17l), the average values for history matching solutions are
higher than the one obtained in last chapter, because of the longer data history.
(c) Fracture water saturation (d) Matrix porosity
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(e) Fracture height (f) Outer fracture half-length
(g) Inner fracture half-length (h) Fracture conductivity
(i) 3D fractal dimension (j) 3D length dimension
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(k) 3D alpha regulator (l) Global error
versus simulation index: (a) Matrix permeability; (b) Fracture permeability
decay factor; (c) Fracture water saturation; (d) Matrix porosity; (e) Fracture
height; (f) Outer fracture half-length; (g) Inner fracture half-length; (h)
Hydraulic fracture conductivity; (i) 3D fractal dimension; (j) 3D length
dimension; (k) 3D alpha regulator; (l) Global error.
5.6 PROBABILISTIC PRODUCTION FORECASTING
Next, we performed probabilistic production forecasting using the obtained 52
history matching solutions. The BHP drawdown schedule after the history matching
period is visualized in Figure 5.18a. To maintain the BHP drawdown rate from the late
history period, we designed a gradual, linear drawdown in 60 months that reduces to a

minimum BHP of 1000 kPa. The gas flow rates, cumulative gas productions, water flow
rates, cumulative water productions are provided in Figure 5.18b, c, d, e, respectively.
Because the history data spans 4 years, the reservoir has lost a large amount of energy
and there is no more flow rate peaks after history period. For 20-year gas estimated
ultimate recovery (EUR), the P10, P50, P90 and best match values are 112.0, 121.2,
127.7, and 115.1 million cubic meters. For 20-year water EUR, the P10, P50, P90 and
best match values are 5.24, 6.50, 7.91, and 7.06 thousand cubic meters. Compared to last
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chapter, the ranges for the probabilistic production forecasting in this study, without
porosity heterogeneity and inclusion of natural fractures, span more widely, further
validating that the characterization of natural fracture distributions and geology model is
crucial in determining the productivity of the shale gas reservoir.
(b) Gas flow rate
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(c) Cumulative gas production
(d) Water flow rate
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(e) Cumulative water production
Figure 5.18: Production forecasting of 52 history matching solutions: (a) Flowing BHP;
(b) Gas flow rate; (c) Cumulative gas production; (d) Water flow rate; (e)
Cumulative water production.
5.7 MATRIX AND FRACTURE PRESSURE VISUALIZATIONS
At last, the pressure in matrix and complex fracture network are visualized
separately for both the short term and long term. In Figure 5.19, we plotted the matrix
pressure at 365 days, end of history period (1626 days), 10 years and 20 years. From this
figure, we can see that the drainage area gradually increases as time progresses. However,
this area is only confined to the region near wellbore, implying that the characterized
fractal network has very deficient connectivity. Figure 20 contains the pressure in
fractures at the same time. This figure again shows that the natural fracture network in
this reservoir is under-developed.
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(a) 365 days
(b) End of history (1626 days)
(c) 10 years

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(d) 20 years
Figure 5.19: Pressure distribution of matrix at different production time: (a) 365 days; (b)
End of history (1626 days); (c) 10 years; (d) 20 years.
(a) 365 days
(b) End of history (1626 days)
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(c) 10 years
(d) 20 years
Figure 5.20: Pressure distribution of complex fracture network at different production

time: (a) 365 days; (b) End of history (1626 days); (c) 10 years; (d) 20 years.
5.8 CONCLUSIONS
We applied the AHM workflow to another shale gas well in southwest china and
investigated the effects of fractal based natural fracture networks on history matching
results. It is found out that the presence of natural fractures reduced possibility of
existence of longer and taller fractures. In other words, our workflow is robust enough to
substantiate the fact that the existence of natural fractures has profound impacts on the
stress shadowing effect of hydraulic fractures propagation. From another perspective, the
history matching results suggest that the natural fractures in this shale reservoir,
according to fractal theory, are less randomly distributed, have a smaller number of faults
and have a rather low density. Compared to the study performed in the last chapter and
128
field experience from geologists, a much more developed natural fracture network is
usually seen in the deeper shale gas reservoirs, and our results indeed agree with the
statement. To close the loop, more subsurface data (such as good-quality microseismic
data, well image log, etc.) should be introduced to further validate the findings if
available.
129
Chapter 6: Summary, Conclusions, and Recommendations for Future
Work
This chapter aims to summarize all the conclusions and findings from this study,
and to deliver some of the potential suggestions for future improvements and extensions
for this study.
6.1 SUMMARY AND CONCLUSIONS
In this study, we developed an automatic history matching (AHM) workflow for
shale reservoirs with natural fractures characterized from both a geology model and based
on fractal theory. This workflow is made possible by implementation of EDFM in both
simple structural grids and complex corner point grids. In addition, the coupling of
XGBoost with MCMC algorithm enables us to optimize the workflow efficiency and
obtain accurate matching results. These results are then applied to probabilistically
perform production forecast, or EUR estimations.
In Chapter 4, we successfully integrated the geology model in corner point
gridding system and geologist-characterized natural fracture network into the AHM
process for a shale gas well. We introduced the complex characteristics of the reservoir,
discussed the difficulties of inputting fractures in this model, and explained how this
problem is solved. Then, we employed the AHM workflow to this reservoir model and
obtained satisfactory results. Probabilistic EUR estimations and natural fracture
connectivity analysis are lastly studied. We found out that the inclusion of porosity
heterogeneity reduced the uncertainties associated with the probabilistic EUR forecasts,
and that the geologist-characterized natural fracture network has very limited
connectivity with both the wellbore and hydraulic fractures, creating a bottleneck for the
20-year EUR values.

130
In Chapter 5, we explored the effects of realistic natural fracture networks on the
results of automatic history matching. Again, each of the module in our proposed AHM
workflow is implemented and acceptable results are achieved. In this chapter, we found
out that the presence of natural fracture does affect the growth of hydraulic fractures, and
based on the characterizations of fractal parameters, we know that the natural fractures in
this reservoir are less randomly distributed and more fractal-distributed. Furthermore,
there is a small number of large-scale fractures and a low natural fracture density.
This study is very beneficial, since the integration of the geology with engineering
is always neglected in most of the previous reservoir characterization studies. The
workflow proposed here is efficient, accurate, and generalized enough to be applied to
any shale reservoirs. By using a physical geology model, a realistic natural fracture
description, and robust AHM workflow to characterize reservoir properties and
uncertainties, invaluable guidance regarding well spacing optimization and engineering
design optimizations is made with ease.
6.2 RECOMMENDATIONS FOR FUTURE WORK
To further improve/extend some aspects of this study and make the numerical
optimization process more realistic, the following bullet points are enumerated:
• For MCMC sampling, we utilized the Metropolis-Hasting (MH) algorithm. There
are other algorithms such as Gibbs sampling, and Hamiltonian sampling.
Furthermore, as the technology of machine learning rapidly improves nowadays,
more advanced proxy models could be available. The exploration of other
sampling methods, potential suitable proxy models and their results comparison
would bring a more wholesome picture for the iterative optimization module.
131
• Microseismic data could be brought into the AHM process. For example, plane
fittings to seismic events and perform automatic cut off of the originally fitted
planes to obtain equivalent half-length and height of hydraulic fractures would
enhance the physical basis between AHM.
• Generation of fractal natural fracture network could be improved. The current
algorithm could not control the total number of natural fractures. Moreover,
physical measurements such as wellbore image logs and microseismic events
should be coupled with fractal theory to delineate natural fracture distributions in
unconventional reservoirs.
• Distributed acoustic sensing (DAS) and distributed temperature sensing (DTS)
data could be utilized in the AHM workflow to further reduce the uncertainties
associated with hydraulic fracture geometry.
• Outputs from specialized fracture modelling software that consider geomechanics
could be integrated with our AHM workflow, and automatic cutoff features can
be added to deliver another source of reference.
132
Glossary
ACRONYMS
AHM = Automatic history matching
AI = Artificial intelligence
ANN = Artificial neural network
BHP = Bottomhole pressure
DAS = Distributed acoustic sensing
DFIT = Diagnostic fracture injection test
DNN = Deep neural network
DPDK = Dual porosity dual permeability model
DTS = Distributed temperature sensing
EDFM = Embedded discrete fracture model
EUR = Estimated ultimate recovery
HFs = Hydraulic fractures
ISIP = Initial shut-in pressure
KNN = K-nearest neighbors
LGR = Local grid refinement

LH = Latin Hypercube
MCMC = Markov-chain Monte Carlo
MD = Measured depth
MH = Metropolis-Hasting
NFs = Natural fractures
NN = Neural network
NNC = Non-neighboring connection

133
P = Pressure
POR = Porosity
RTA = Rate transient analysis
SAGD = Steam-assisted gravity drainage
WGR = Water gas ratio
WHP = Wellhead pressure
NOMENCLATURE
𝐷𝑐3𝐷 = 3D fractal dimension number
dip = Angle between hydraulic fracture plane and x-y plane
𝐷𝑙 = 2D length dimension number
𝐷𝑙3𝐷 = 3D length dimension number

𝐹𝑗 = Objective function value for response variable j
ℎ𝑓 = Height of the hydraulic fracture
i = Index of the proxy location
𝑘′ = Reduced permeability at a specific reservoir pressure

𝑘𝑃𝑖 = Original permeability at initial reservoir pressure
𝐾 = Inverse Langmuir pressure
𝐿𝑋𝐺𝐵 = Overall loss function of XGBoost model
Loss function value of XGBoost model at data point i given input

𝐿(𝑦𝑖 , 𝐹(𝑥𝑖 )) =
data of xi and output data of yi
𝑀 = Total number of sub-loss function of XGBoost model
𝑀𝐷ℎ = Measured depth of the adjacent well trajectory point toward heel side
𝑀𝐷𝑝 = Measured depth of an arbitrary perforation point
134
𝑀𝐷𝑡 = Measured depth of the adjacent well trajectory point toward toe side
Density of natural fractures given a minimum fracture length of 𝑙

𝑛(𝑙, 𝐿) =
and a model scale of 𝐿
𝑁 = Total training size for XGBoost model
p = Total proxy locations selected for the response variable j
𝑃𝑖 = Initial reservoir pressure
𝑃𝑚 = Matrix pressure
𝑃′ = A specific reservoir pressure after production begins
𝑟 = Interpolation ratio
𝑠𝑡𝑟𝑖𝑘𝑒 = Angle between positive x-axis and middle axis
𝑡𝑖𝑙𝑡𝑖𝑛𝑔 = Angle between x-y plane and the middle axis
𝑉̅𝑚𝑎𝑥 = Maximum volume of absorbed gas per unit mass of rock
wi = Weight assigned to the proxy point i, given a response variable j
𝑊𝐺𝑅𝑚𝑎𝑥 = Maximum water gas ratio observed

𝑥𝑓 = Half-length of the bi-wing planar hydraulic fracture
𝑥𝑚𝑎 = X coordinates of two endpoints of the fracture’s middle axis

𝑥𝑝 = X coordinate of an arbitrary perforation point
𝑥𝑣 = X coordinates of the four vertices of the hydraulic fracture

ℎ
𝑥𝑤 = X coordinate of the adjacent well trajectory point toward heel side
𝑡
𝑥𝑤 = X coordinate of the adjacent well trajectory point toward toe side
𝑦𝑖,ℎ𝑖𝑠𝑡 = Value of the response variable j at time i from actual history data
Value of the response variable j at time i from simulation run or

𝑦𝑖,𝑚𝑜𝑑𝑒𝑙 =
proxy model
𝑦𝑚𝑎 = Y coordinates of two endpoints of the fracture’s middle axis
135
𝑦𝑝 = Y coordinate of an arbitrary perforation point
𝑦𝑣 = Y coordinates of the four vertices of the hydraulic fracture
𝑦𝑤ℎ = Y coordinate of the adjacent well trajectory point toward heel side
𝑦𝑤𝑡 = Y coordinate of the adjacent well trajectory point toward toe side
𝑧𝑚𝑎 = Z coordinates of two endpoints of the fracture’s middle axis

𝑧𝑝 = Z coordinate of an arbitrary perforation point
𝑧𝑣 = Z coordinates of the four vertices of the hydraulic fracture

ℎ
𝑧𝑤 = Z coordinate of the adjacent well trajectory point toward heel side
𝑡
𝑧𝑤 = Z coordinate of the adjacent well trajectory point toward toe side
𝛼 = 2D alpha regulator
𝛼𝑎𝑑𝑠 = Unit fractional adsorption
𝛼3𝐷 = 3D alpha regulator
𝛽 = Fracture permeability decay factor
∆𝑃 = Empirical constant pressure loss
Global objective function of the previous or initial combination of

𝜀 =
uncertain parameters
Global objective function of the proposed, disturbed combination of

𝜀∗ =
uncertain parameters
Γ = Gamma function
Ω(ℎ𝑚 ) = Regularization function of XGBoost model
𝜙 = Matrix porosity
𝜌 = Rock density
Variance of the global objective function values for the smart

𝜎2 =
sampling results
136
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Automatic History Matching with Data Integration for Unconventional

Kamy Sepehrnoori, Supervisor

The University of Texas at Austin

for the Degree of

Master of Science in Engineering

The University of Texas at Austin

I would especially express my greatest gratitude toward my advisor, Dr. Kamy

entire United States.

unconditional suggestions and rigorous trainings helped me gain invaluable experience

and sincere emotional support whenever I am facing a challenge. Most importantly, I am

My deepest credit also extends to previous graduate students, Marut Wantawin,

Silpakorn Dachanuwattana, and Sutthaporn Tripoppoom for building a solid foundation

it would be difficult to obtain my achievements thus far.

Automatic History Matching with Data Integration for Unconventional

Chuxi Liu, M.S.E.

The University of Texas at Austin, 2020

Supervisor: Kamy Sepehrnoori

Given the dynamic production data of a reservoir, numerical optimization tools

ensemble of solutions that quantitatively characterizes associated uncertainties. However,

uncertainty when make realizations of shale reservoirs, by integration of data from

geology and geomechanics.

reality, by mimicking the irregular half-length outputted from fracture modelling

wellbore/hydraulic fractures plays an important role in determining the well’s EUR

geological/geomechanical information, along with non-deterministic realizations of

EUR estimation and economic appraisal, and fracture design optimizations.

List of Figures ................................................................................................................... xii

Chapter 1: Introduction ........................................................................................................1

1.2 Research Objectives ..............................................................................................2

1.3 Thesis Outline .......................................................................................................2

Chapter 2: Literature Review ...............................................................................................4

2.1 Fracture Modelling ...............................................................................................4

2.2 History Matching ..................................................................................................8

2.3 Corner Point Gridding ........................................................................................10

2.4 Natural Fractures.................................................................................................11

Chapter 3: Methodology ....................................................................................................12

3.1 Introduction .........................................................................................................12

3.2 Automatic History Matching (AHM) Workflow ................................................12

3.3 Input Module.......................................................................................................14

3.3.1 Field Inputs ..........................................................................................14

3.3.2 Data Treatments ...................................................................................14

3.3.3 Base Model Setup ................................................................................15

3.4 Iterative Optimization Module............................................................................16

3.4.1 Uncertainty Identifications...................................................................16

3.4.2 Smart Sampling....................................................................................18

3.4.3 EDFM with Hydraulic Fractures .........................................................19

3.4.5 Reservoir Simulator .............................................................................24

3.4.6 Artificial Intelligence (AI) ...................................................................25

3.4.7 Markov Chain Monte Carlo (MCMC) Algorithm ...............................28

3.5 Solution Module .................................................................................................30

3.5.1 Solution Filtering .................................................................................30

3.5.2 Representative Best Match ..................................................................31

3.5.3 Posterior Distribution ...........................................................................32

3.6 Post-processing Module ......................................................................................32

3.6.1 Probabilistic Production Forecast ........................................................32

3.6.2 Visualizations .......................................................................................33

Chapter 4: Application of Automatic History Matching to Corner-Point Gridding

4.1 Introduction .........................................................................................................34

4.2 Reservoir Model .................................................................................................34