Economic conductivity

Economic Conductivity (2008) is a sophisticated financial analysis of an oil or natural gas reservoir's ability to provide maximum financial payout through optimized productive capacity.

Oil and natural gas are typically found hundreds or thousands of feet underground in the small pores of rock formations. The conductivity or permeability of a reservoir is one of the most critical factors in getting oil and gas to the surface. Reservoirs are often treated by hydraulic fracturing or other activities to stimulate greater conductivity.

For petroleum exploration and production (E&P) companies (ranging from multi-national supermajors to small independents) as well as service companies which drill oil and natural gas wells, a single well represents an investment of millions of dollars. While producers have an understandable incentive to minimize their costs, a growing number are choosing to look beyond initial costs, instead designing completion and stimulation programs that optimize production for cost-effective output, saving money in the long run.

Economic Conductivity analysis can result in optimized conductivity under realistic conditions to provide the best return on investment.

The petroleum industry traditionally used simple formulae and basic models to try to predict a well’s production capacity. Economic Conductivity analysis draws upon significant advances in technology and detailed case studies, enabling petroleum engineers to factor in complex variables and downhole conditions such as closure stress, non-Darcy Flow, multiphase flow, fluid velocity, and cyclic stress to determine the realistic conductivity of the reservoir.

The costs of hydraulic fracturing and other stimulation activities can then be assessed according to the corresponding increases in production, allowing producers to achieve the most cost-efficient production of oil and gas.

Economic Conductivity is measured in millidarcy-feet per dollar (mD-ft/$).