Abstract
The Appalachian Basin is one of the oldest gas producing provinces in the United States. Over the years, many low permeability reservoirs of different geological ages have produced gas in this area. In recent years, the gas produced in this region has encountered difficulties in remaining competitive due to the decline in gas demand and supply surplus. In order for this gas to remain competitive and regain markets, it is necessary to reduce the cost of drilling and/or completion. One economic means of developing gas resources is through deepening/recompleting the existing gas wells to new horizons. This is particularly applicable to the Appalachian Basin where there exists many old and marginal gas producing wells.
This paper provides a general methodology to evaluate the economic feasibility for deepening/recompleting existing shallow gas wells to new horizons through slim-hole drilling. In this study, several geological units in Appalachia have been selected to demonstrate the feasibility of slim-hole drilling/recompletion as well as their relative economic incentive. Various data on these geologic units have been collected and compiled. The collected data were analyzed to delineate the production history as well as the characteristics of the formations under study. The results were later utilized in conjunction with the discounted cash flow model for determination of the rate of return and the payout time for different horizons (which are most suitable for deepening marginal wells through slim-hole drilling). In addition, the areas which are potential candidates for recompletion have been identified. These areas have further been ranked based upon the economic indicators such as the rate of return, payout time, etc. The results clearly indicate that gas can be produced at substantially lower prices in comparison to drilling new wells to the same target intervals. Thus, recompletion through slim-hole drilling provides a significant incentive for development of gas resources in this region.
