Economic Evaluation of Hydraulic Fracturing in a Gas Condensate Reservoir Operating below Dewpoint

Hydraulic fracturing is among the approaches used to optimize production from a gas condensate reservoir. A detailed economic analysis is required to evaluate the profitability and feasibility of hydraulic fracturing as an optimization option in a gas condensate reservoir operating below dewpoint. The objective of this research is to evaluate the economic benefits derivable from the use of hydraulic fracturing to improve gas and liquid recovery from a gas condensate reservoir operating below dewpoint. This research considers the use of four profit indicators to ascertain the profitability of hydraulic fracturing in a gas condensate reservoir operating below dewpoint by increasing the fracture halflength, fracture width and fracture permeability. The production data of the reservoir was obtained and the economic calculations done on excel spreadsheet and plots generated. The four profit indicators considered in the research are Net Present Value, Payout, Discounted Cash Flow Rate of Return and Profit per Dollar Invested. The economic justification was done by carrying out a comparative economic analysis from the result obtained when the reservoir of study was unfractured with that obtained when the reservoir was fractured at various fracture parameters. The economic analysis was done considering a royalty and tax rate of 18.5% and 30% respectively and a gas price of $2/MSCF and condensate price of $30/bbl. This is done so as to find out if the additional cost of hydraulic fracturing can be offset by the recovery from the reservoir when its pressure declined below dewpoint. The result obtained showed that the additional recovery due to hydraulic fracturing by increasing the fracture halflength, fracture width and fracture permeability was not enough to justify the application of hydraulic fracturing when the reservoir pressure declined below dewpoint.