An Economic Evaluation on the Re-fracturing Treatment of the U.S. Shale Gas Resources

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.