Techno-Economic Optimization of Well Spacing: A Case Study in the Marcellus Shale

Summary Although hydraulic fracturing of horizontal wells has already given promising results in enhancing recovery from unconventional reservoirs, drilling too many wells does not necessarily contribute to economic development. Permeability of naturally fractured porous media and the dimensions of contributing fractures are among the most important parameters in well spacing optimization. Here, we use a computationally efficient technique and examine conditions that improve the economic viability of shale gas development in a case study in the Marcellus shale. We focus on the extent to which adding more wells to a section provides a competitive advantage; maximizing hydrocarbon recovery factor and economic returns and minimizing cost. In particular, insights gained from integrating microseismic and Rate Transient Analysis (RTA) are used to refine fracture dimensions. The Net Present Value (NPV) of cash flows and the Internal Rate of Return (IRR) are then calculated based on 10-year production forecasts made by a history-matched physics-based analytical model and for a wide range of well spacings from 440 to 1760 ft. The end result is an optimum well spacing acquired by coupling the technological and economic performance of stimulation, while honouring reservoir properties, production potential, and microseismic findings.