An Integrated Stochastic Decision-Support Framework: Hybrid Commercialization of Marginal Dry Gas Wells
Year: 2026
Type: article
Abstract: Natural gas production from mature fields is progressively shifting toward low-rate wells operating near their economic limit, creating challenges for long-term asset management. This study proposes an integrated stochastic decision-support framework combining Arps decline curve analysis, a calibrated Schwartz Type-I mean-reverting jump-diffusion model, Monte Carlo simulation, and Bellman dynamic programming to optimize marginal dry gas well management. The framework evaluates pipeline commercialization and a hybrid strategy integrating on-site electricity generation, while incorporating monetized environmental externalities associated with CO2 emissions from gas combustion and potential post-abandonment CH4 emissions. Application to the Mareógrafo 100 well in Mexico shows that the environmentally adjusted Bellman policy yields a mean NPV of USD 34.84 thousand, exceeding the comparable pipeline-only and hybrid strategies. Internalizing environmental costs reduces the mean optimal NPV by 46.6% relative to the economic-only formulation, while the mean abandonment time is approximately 200 days. Sensitivity analysis identifies electricity price, natural gas price, and pipeline distance as the dominant profitability drivers. The proposed framework provides a transferable methodology for jointly evaluating commercialization, environmental externalities, and abandonment decisions in mature dry gas fields under uncertainty.
Source: Energies
DOI: 10.3390/en19163936
Language: English
Subfield: Finance
Domain: Social Sciences
Open Access status: gold
Estimated APC paid: $3,137
OpenAlex ID: W7203907503