Initially, consider the fact that horizontal wells boundary conditions could be different from the vertical ones, especially if you have a thin formation.
Secondly, I suggest you go with the MD. It makes more sense.
MD my dear colleagues. But remember a concept: the payzone thickness has a little more complex definition and it is function of your type of reservoir. Thinking for instances in tight-sandstones and oil-shales. Best wishes Sir. Mario
MD will give you the more representative flow length, however the assumption normally that the total well length is contributing to flow. unless there is a PLT survey combined with the pressure build-up, use the total measured depth.