Economic Evaluation of Hydraulic Fracturing in a Gas Condensate Reservoir Operating below Dewpoint

Nkemakolam Chinedu Izuwa,Anthony Kerunwa,Princewill O Ariche

doi:10.4236/ojogas.2020.53007

Abstract

Hydraulic fracturing is among the approaches used to optimize production from a gas condensate reservoir. A detailed economic analysis is required to evaluate the profitability and feasibility of hydraulic fracturing as an optimization option in a gas condensate reservoir operating below dewpoint. The objective of this research is to evaluate the economic benefits derivable from the use of hydraulic fracturing to improve gas and liquid recovery from a gas condensate reservoir operating below dewpoint. This research considers the use of four profit indicators to ascertain the profitability of hydraulic fracturing in a gas condensate reservoir operating below dewpoint by increasing the fracture halflength, fracture width and fracture permeability. The production data of the reservoir was obtained and the economic calculations done on excel spreadsheet and plots generated. The four profit indicators considered in the research are Net Present Value, Payout, Discounted Cash Flow Rate of Return and Profit per Dollar Invested. The economic justification was done by carrying out a comparative economic analysis from the result obtained when the reservoir of study was unfractured with that obtained when the reservoir was fractured at various fracture parameters. The economic analysis was done considering a royalty and tax rate of 18.5% and 30% respectively and a gas price of $2/MSCF and condensate price of $30/bbl. This is done so as to find out if the additional cost of hydraulic fracturing can be offset by the recovery from the reservoir when its pressure declined below dewpoint. The result obtained showed that the additional recovery due to hydraulic fracturing by increasing the fracture halflength, fracture width and fracture permeability was not enough to justify the application of hydraulic fracturing when the reservoir pressure declined below dewpoint.

Highlights

Gas condensate reservoir is among the types of reservoirs that we have and as such it represents a major source of hydrocarbon
The result obtained showed that the additional recovery due to hydraulic fracturing by increasing the fracture halflength, fracture width and fracture permeability was not enough to justify the application of hydraulic fracturing when the reservoir pressure declined below dewpoint
Fracturing the reservoir at Xf = 1000 ft, Wf = 0.03 ft and Kf = 1000 md generated an Net Present Value (NPV) of $455.5 Million at 10% discount rate. This increase in NPV at this fracture parameter as seen in Figure 1 below is due to the increase in cumulative liquid recovery as seen in Table 1 above. This shows that the additional liquid recovered at the expiration of the production period was able to offset the additional cost of hydraulic fracturing

Summary

Introduction

Gas condensate reservoir is among the types of reservoirs that we have and as such it represents a major source of hydrocarbon. At pressures below dewpoint pressure of the reservoir, liquid drops out of the gas phase in a process known as condensate banking. A hydraulic fracture involves inducement of fracture through pressure by the injection of fluid into a target reservoir rock formation. Hydraulic Fracturing involves the injection of a large volume of frac fluids into the well under high pressure to fracture the reservoir rock. It involves pumping fluid into a wellbore faster than the escape of the fluid into the formation causing enormous rise in pressure, thereby leading to the creation of cracks in the deep formation-rocks through which brine, natural gas and crude oil will flow through [3].

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