Energy Investing

What is the Difference Between Conventional Wells and Unconventional Wells?

An overview of the geologic rock properties of the two types of wells and how it affects production forecasting

What is the Difference Between Conventional Wells and Unconventional Wells?

Published on

September 26, 2023

Oil and gas wells produce from hydrocarbon-bearing geologic reservoirs deep under the surface of the earth which are either characterized as conventional reservoirs or unconventional reservoirs. For all oil and gas reservoirs, there are three important geologic characteristics that oil and gas companies consider when exploring for oil and natural gas: porosity, hydrocarbon saturation, and permeability. In plain English, porosity describes the capacity for a rock formation to hold liquids or gases, hydrocarbon saturation describes the percentage of total pore volume occupied by hydrocarbons, and permeability describes the ability for liquids or gases to flow through the rock pore space.

Most conventional wells, including the first conventional oil well in the United States which was produced by Edwin Drake in 1859, are characterized by drilling under the surface of the earth vertically or near vertically until the wellbore reaches a target conventional reservoir such as a sandstone or limestone which has sufficient porosity, sufficient hydrocarbon saturation, and sufficient permeability. Once drilled and completed, the hydrocarbon which was originally trapped under high pressure becomes exposed to low surface pressure which creates a pressure imbalance between the surface of the earth and the reservoir. Since conventional reservoirs have sufficient permeability, the pressure imbalance is sufficient to force the hydrocarbon to flow through the porous rock, up the wellbore, and to the surface of the earth. This phenomenon can be modeled by petroleum engineers through physics-based transport phenomena equations involving the conservation of energy and mass.

Up until the 1990’s, most scientists and engineers believed that economically producing from unconventional reservoirs such as shale formations was impossible. Like conventional reservoirs, attractive unconventional reservoirs have sufficient porosity and sufficient hydrocarbon saturation, but unconventional reservoirs in contrast have insufficient permeability. In other words, unconventional reservoirs have large amounts of hydrocarbon in place, but due to their low permeability, the majority of the oil and natural gas does not flow freely through the rock pores and cannot be produced to the surface. Then starting in the 1990s, the combination of horizontal drilling and hydraulic fracturing technologies allowed companies to create sufficient, but locally confined artificial permeability which enabled drilling unconventional wells economically viable. Due to the locally confined nature of an unconventional well’s permeability, production from unconventional wells is isolated and independent relative to other wells around it, assuming no external interference, which lends itself to an AI-enabled statistical approach.




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