A CBM development well type optimization method based on the long-run marginal cost

Reasonable optimization of development well type is the prerequisite to realize the economic and effective development of coalbed methane (CBM). However, the existing CBM development well type optimization methods are disadvantageous in many aspects. CBM is a kind of typical unconventional natural gas resource, and its study focuses on single-well evaluation. In this paper, the assessment method and the evaluation index (EI) for CBM development well type optimization based on the long-run marginal cost (LRMC) were constructed on the basis of CBM characteristics from the perspective of economic feasibility. Then, the corresponding decision making criteria were established. Finally, this newly developed method was applied to the well-type optimization of different development blocks in two important CBM development basins in China. And the following research and application results were obtained. First, under the current technical and economic conditions, both directional well and horizontal well are economically feasible to the development of Block A in the Qinshui Basin and Block B in eastern margin of the Ordos Basin, and the economically optimal well type is a horizontal well in Block A and a directional well in Block B. Second, compared with single-well steady daily gas production and single-well investment, the evaluation results on the schemes of different well types present critical value, above which the economic benefit of different schemes are equivalent. Third, EI of different well types is affected by many factors, e.g. geological characteristic of gas reservoirs, single-well production profile, CBM selling price, investment and cost. Therefore, it is necessary to carry out dynamic analysis and update in time based on the change of various influential factors so as to ensure the rationality of decision-making. In conclusion, this newly developed method is intrinsically consistent with traditional evaluation methods, and it is more advantageous with strong operability, intuitive evaluation results and quick and accurate optimization of CBM development well types. Keywords: Coalbed methane (CBM), Long-run marginal cost (LRMC), Development well, Well-type optimization, Directional wells, Horizontal wells, Surface development, Decision making criteria, Critical point