Parametric analysis of the performance of horizontal and vertical wells: economic and technical perspectives

In this work, technical and economic investigations were conducted for vertical and horizontal wells to determine which technique is preferable under real reservoir conditions. The productivity index for vertical wells was estimated using Darcy’s formula for single phase flow in a radial system under steady-state conditions, while the productivity index for horizontal wells was calculated using Joshi’s model. Economic analysis for both options, vertical and horizontal wells, was conducted using discounted cash flow theory, where major economic parameters such as net present value (NPV), internal rate of return (IRR), and present value ratio (PVR) were calculated. Results showed that reservoir’s horizontal permeability has a higher impact on vertical and horizontal wells’ productivity and performance than reservoir’s vertical permeability. Also, horizontal well section length and reservoir thickness noticeably affected horizontal wells more than vertical wells. Moreover, data suggests that wider reservoirs may slightly reduce well performance due to the dispersion of fluid flow over a larger area. The economic indicators, NPV, IRR, PVR, and payback period showed that drilling a horizontal well is more attractive economically than a vertical well. Finally, technical and economic analysis indicated that horizontal drilling is much more beneficial than vertical drilling under the same circumstances.