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Co2 Injection In Nearly Depleted Gas Reservoirs

Carbon dioxide sequestration includes the flexibility to improve hydrocarbon recovery (and create value) in nearly deplete gas reservoirs. Despite their technical uncertainty,such projects should have economic viability. We evaluate the value creating potentials of an enhanced gas recovery project by quantifying the value of real options. Our model examines converting natural gas producer wells to CO2 injectors under gas price volatility. In our framework, we model the decision whether to convert a well to an injector using its expected continuation value. As price expectations change, the expected continuation value also tends to change. Therefore, we model the dynamic behavior of gas prices using stochastic processes to show the dynamic decision making in this project. The approach provides insights into the potential of CO2 injection in depleted gas reservoirs. The results show project potentials within an integrated context of dynamic prices and technical assessments.