Abstract: In view of Shengli oilfield's current situation of high or extra-high water cut, and economic efficiency based on oilfield's actual data, this paper established the quantitative relationship between oil recovery and well spacing density. It takes into consideration the investment on infrastructure and the operating and management spending during investment pay out period etc, using the principle of loss-and-gain balance, this paper formulated the expression of rea- sonable well spacing density. This formula has been applied and verified in Shengli oilfield, on to high and low permeabilty reservoir of fifty units altogether which have been classified into two categories: high-permeable and low permeable. It prov ide reliable scientific basis for oilfield development decision making and production operation.

Key words: high water-cut stage, economic benefit, well spacing density, recovery factor