An economic evaluation on the re-fracturing treatment of the U.S. shale gas resources

Mohammad O. Eshkalak, Umut Aybar, Kamy Sepehmoori

Research output: Chapter in Book/Report/Conference proceedingConference contributionpeer-review

29 Scopus citations

Abstract

We investigate the economic feasibility of the re-fracturing treatment of horizontal wells producing gas from unconventional reservoirs. As a result of advancements in horizontal completions and hydraulic fracturing, the U.S. has been able to economically develop several decades of worth of natural gas from shale deposits. However, a considerable concern has risen on the economic viability of shale gas development with the reasons associated to the very fast production declines as well as recent down-turns of natural gas prices beside the raise in additional costs of new technologies. Therefore, an economic analysis required to investigate the profitability of the secondary enhanced gas recovery method, re-fracturing treatment of unconventional gas resources within the U.S. Net present value (NPV) of cash flows and internal rate of return (IRR) are calculated for different assumed gas prices considering 20 years of natural gas production from a typical unconventional reservoir. A systematic comparison is made for three scenarios, 1) re-fracturing vs. no re-fracturing (the base case scenario) 2) combination of re-fracturing and drilling new well; and 3) time-dependent re-fracturing treatment. This paper incorporated the cost of re-fracturing treatment, the cost of drilling a new horizontal well, the water treatment cost, as well as the current and future price of natural gas in the model. Findings of this work can be used to optimally develop the U.S. shale gas assets. Moreover, operators can have access to an assessment to ensure the economic success of their unconventional horizontal wells in their future re-fracturing treatments.

Original languageEnglish
Title of host publicationSociety of Petroleum Engineers Eastern Regional Meeting 2014
Subtitle of host publicationRamping up in Appalachia
PublisherSociety of Petroleum Engineers (SPE)
Pages96-103
Number of pages8
EditionJanuary
ISBN (Electronic)9781634398367
DOIs
StatePublished - 2014
EventSociety of Petroleum Engineers Eastern Regional Meeting 2014: Ramping up in Appalachia - Charleston, United States
Duration: 21 Oct 201423 Oct 2014

Publication series

NameSPE Eastern Regional Meeting
NumberJanuary
Volume2014-January

Conference

ConferenceSociety of Petroleum Engineers Eastern Regional Meeting 2014: Ramping up in Appalachia
Country/TerritoryUnited States
CityCharleston
Period21/10/1423/10/14

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