Influence of Subsurface and Economic Parameters on Optimal Well Spacing in Unconventional Shale Gas Reservoirs: A Marcellus Shale Case Study

Abstract

Optimization of well spacing is critical in maximizing hydrocarbon recovery and economic returns, especially for developing unconventional shale gas reservoirs. This research work aims to investigate the impacts of various reservoir, hydraulic fracture, and economic parameters on the determination of optimum well spacing in the Marcellus shale. For this purpose, a detailed reservoir model was built using the robust CMG simulation software based on publicly available data and proven methodologies. Four well spacing configurations were taken into consideration, which included 825 ft (7 wells), 1,000 ft (6 wells), 1,250 ft (5 wells), and 1,650 ft (4 wells).

A One-Factor-At-a-Time (OFAT) sensitivity analysis was carried out, varying 31 different reservoir parameters one by one and each at five different levels. Net Present Value (NPV) calculations were made for every varied parameter and for every well spacing to study sensitivities in economic performance and optimal well spacing.

The results from these illustrate that certain properties of the reservoir, such as porosity and permeability, strongly influence both NPV and optimal well spacing. Increased porosity positively affects the former by allowing increased hydrocarbon storage and production efficiency, favorable for closer well spacing. While higher permeability allows closer spacing in the initial instance, at values of around the tight gas threshold (≥0.01 mD), closer spacing becomes less economically beneficial compared to wider spacing, since there is effective reservoir drainage at lower well density.

The hydraulic fracture and completion parameters are also critical. Optimization of fracture height and half-length enhances the NPV by expansion of the stimulated reservoir volume, although beyond thresholds, further increase reflects diminishing returns or even an adverse response. At larger fracture dimensions, wider well spacing may be more advantageous.

Economic factors include gas price and well cost, which have the strongest influence on NPV and optimal well spacing. On one hand, increasing the gas price increases NPV and favors closer spacing because of increased revenue due to higher production rates. On the other hand, increasing well cost decreases NPV and pushes optimal spacing into wider configurations that reduce capital spending. The discount factor impacts absolute values of NPV but does not impact significantly the relative advantages among the different spacing options.

Other sensitivity analyses that involved rock compressibility, rock density, gas specific gravity, and adsorption characteristics showed very minor influences for NPV and optimal well spacing as such; optimization based on these parameters may not be economically significant. This research provides a framework for tailoring well spacing strategies to specific reservoir conditions and economic environments. By focusing on impactful parameters, operators can enhance production efficiency and maximize economic returns, promoting efficient resource utilization in unconventional shale gas development.

Date of Award	6 Dec 2024
Original language	American English
Supervisor	Hadi Belhaj (Supervisor)