The intrinsic heterogeneous nature of Coal Seam Gas (CSG) reservoirs can significantly diminish the expected return. This paper presents a new method to decrease inherent investment risk by delineating permeability and provides illustrative case studies. The approach identified riskier reservoir areas to effectively place delineation wells and optimise the number of fracture wells, all with an aim to reach economic gas rates with minimum expenditure and maximum value during development phases.

This work characterises high-mid-low permeability and coalbed gas saturation areas through a novel methodology that uses normalised production rates and net coal measurements. As a result, a comprehensive risk map is generated, from which new development locations near high-risk areas are proposed for permeability delineation. The data acquired from delineation defines which development wells need to be fractured to minimise risk. Additionally, the effect of dewatering on gas production is investigated, along with the impact of fractured wells on mitigating risk. The approach also incorporates a decision trees analysis to predict incremental value resulting from applying the new approach.

A reliable qualitative characterisation of permeability and coalbed gas saturation was obtained after using normalised production rates and net coal measurements in a particular CSG reservoir. Probabilistic distributions of actual production trends show a detrimental effect of low permeability in dewatering and, subsequently, gas recovery. This condition worsens as gas saturation decreases. The above findings are crucial to categorising risk and generating a risk map. An effective delineation well placement is determined based on the existing high-risk area's size and location. Overall, this methodology provides an effective placement of delineation and fracture wells to identify and mitigate risk, respectively. According to economic risk assessment in an illustrative case, the expected return is projected to increase by more than five times from implementing the new delineation approach.

This approach fits the current industry needs very well, as it is reliable, maximises return and can be easily integrated into the development strategy of any CSG reservoir. The novelty of the methodology relies on the qualitative identification of permeability and gas saturation to capture reservoir heterogeneity and categorise risk, all to optimise delineation and fractured wells placement. It can be applied to reservoirs where heterogeneity characterisation through traditional tools is not economically feasible.

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