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Keywords
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hydraulic fracturing, tight sand, Risk of Commercial Failure (RCF), heterogeneity, uncertainty, Net Present Value (NPV)
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Abstract
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Hydraulic fracturing technologies play a major role in the global energy supply and
affect oil pricing. The current oil price fluctuations within 40 to 55 USD per barrel have caused
diminished economical margins for hydraulic fracturing projects. Hence, successful decision making
the for execution of hydraulic fracturing projects requires a higher level of integration of technical,
commercial, and uncertainty analyses. However, the complexity of hydraulic fracturing modeling,
and the sensitivity and the effects of uncertainty of reservoir heterogeneity on well performance
renders the integration of such studies rather impractical. The impact of reservoir heterogeneity
on hydraulic fracturing performance has been quantified by the introduction of Heterogeneity
Impact Factor (HIF) and formulas have been developed to forecast well performance using HIF.
These advances provide a platform for introducing a practical approach for introducing the Risk of
Commercial Failure (RCF) due to reservoir heterogeneity in hydraulic fracturing projects. This paper
defines such a parameter and the methodology to calculate it in a time-efficient manner. The proposed
approach has been exercised on a real project in which a RCF of 20% is computed. The analysis also
covers the sensitivity on Capital Expenditure (CAPEX), Operational Expenditure (OPEX), gas price,
HIF and discount rate.
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