Ranking horizontal-well sites in tight, naturally fractured reservoirs

This paper describes a method to examine the relative merits of locations for horizontal wells in a naturally fractured shale gas basin. The methodology examines noncontrollable variables (existing reservoir pressure, pay-zone thickness, and success ratios) as well as controllable variables (gas price and drilling costs) to arrive at the profitability for a horizontal well project in a candidate area. An analysis of the expected monetary value (EMV) and a cash flow model are used to obtain a distribution of cash flow levels that yields a determination of whether a project is likely to succeed. Ranges of profitability for an unstimulated horizontal well are presented graphically. With this approach, the most likely areas for horizontal drilling to be economically and technically successful are identified easily and quickly.