The change of fracture conductivity during reservoir depletion significantly affects the well performance and stress evolution in unconventional formations. A common practice is to model fracture deformation using the traditional finite element method with very dense unstructured grids representing complex fracture geometries. However, the associated computational cost is high, so previous studies mainly use empirical correlations to catch the fracture conductivity loss or neglect fracture deformation during the production period. This work proposes a novel coupled flow and geomechanics model with embedded fracture methods to capture the fracture deformation accurately yet efficiently in unconventional reservoirs. Under a single set of structured grids, an embedded discrete fracture model (EDFM) is employed to characterize fluid flow through discrete fractures by introducing non-neighboring connections, and an extended finite element method (XFEM) is applied to simulate discontinuities over fracture walls by adding phantom nodes. In addition, a modified proppant model is incorporated to represent interactions between proppants and hydraulic surfaces, and an iterative coupling scheme is implemented to link the fracture-related fluid flow and solid mechanics. Being validated against the classical benchmark problem, the coupled model is used to investigate the impacts of proppant strength, closure stress, and bottomhole pressure on fracture deformation, well production, and in-situ stresses. Numerical results indicate that weaker proppant support induces more fracture aperture and production losses, resulting in greater stress changes and higher residual pressure in the depletion region. In comparison, the fracture deformation for a well-propped scenario is modest and barely affects the well performance and stress redistribution. Less stressed formation corresponds to lower closure stress on fracture walls, which triggers limited fracture closure and stabilizes well production. Moreover, a moderate bottomhole pressure decline rate avoids significant fracture closure while preserves relatively high initial production rates. The coupled flow and geomechanics model with embedded fracture methods resolves computational difficulties in modeling complex fracture deformations and delivers more insights on production forecast and stress changes crucial to refracturing and infill operations.

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