Development of reservoir economic indicator for Barnett Shale gas potential evaluation based on the reservoir and hydraulic fracturing parameters

The general economics or productivity potential of shale gas projects are strongly related to the reservoir characteristics and completion quality. This study proposed a framework for the development of an economic indicator for evaluating the economics of a shale gas project based on the reservoir parameters, hydraulic fracturing parameters, and various gas price scenarios. Nine key parameters were selected as the most influential factors through a sensitivity analysis study: the reservoir pressure, reservoir thickness, porosity, permeability, initial gas saturation, adsorbed gas content, fracture half-length, fracture conductivity, and fracture spacing. A total 87 simulation cases were modeled and simulated based on the key parameters, whose ranges were based on the Barnett shale reservoir properties to define the relationship between the net present value (NPV) of a well along with the reservoir properties and hydraulic fracturing qualities. An indicator-based multivariate exponential function was then developed in terms of the key parameters. A strong correlation was observed between the economic indicator (SREI) and the NPV of a shale gas project. The parameters in the developed indicator were then divided by their base values to develop a dimensionless indicator. The dimensionless economic indicator was incorporated with a range of gas prices from $2 to $8 USD/Mcf to develop a dynamic economic indicator called the SREI_D. The results showed that value of SREI_D should be greater than 1.088 for a gas well in Barnett shale reservoir to be economically feasible, which shows a positive NPV. The results from the cross-validation test indicated that SREI_D can properly describe the relationship between the NPV of a shale gas well and the reservoir parameters and hydraulic fracturing parameters. The proposed economic indicator is a useful tool for identifying sweet spots in a shale gas reservoir. Furthermore, the use of SREI_D is efficient and convenient, and the proposed indicator can be used to identify the economic feasibility of a shale gas well for various gas price scenarios without calculating the NPV. The results of this study can be extended as a general economic indicator for major shale gas basins in the USA or in other countries.