# Evaluation and Economics of Shale Gas Reserves in the Flysch-Eocene Formation of the Jaca Basin
## 3 Results
### Well Economic Analysis  
An economic study was conducted on the basis of a single well to analyze the profitability of the field as a whole. Significant investments are necessary for the execution of a large number of wells, usually horizontal, which may be multi-lateral, requiring a multi-stage fracturing method.  
The most important factors to be taken into account during field development are: OGIP, the extent of the field (number of wells), the depth and direction of the wells (field characteristics), the selling price of the gas, the existence of a local market or nearby pipelines for its transportation, and the environmental safety.  
The price of energy in the E.U. depends on a variety of different supply and demand conditions, including the geopolitical situation, the national energy mix, the import diversification, the grid costs, the environmental protection costs, the adverse weather conditions and the tax levels (Figure 7). The gas price used in the calculations is the corresponding price for Spain in 2019, 0.1082 \(\upepsilon\)/kWh (Eurostat) [38]. It has been estimated as constant, due to the fact that the medium-term outlook does not foresee a drop in price to 2020 or earlier levels.  
Well costs depend on where the wells are drilled, how deep they are drilled and whether they are vertical or horizontal. In the USA, the construction cost of a 5280 ft horizontal well with a vertical depth of about 7000 ft is between 3-5 MM USD In Europe these costs are likely to be higher.  
Figure 7: Natural gas prices household and non-household consumers (Eurostat) [38].  
\begin{table}
\begin{tabular}{c c c c} \hline \hline  & **Estimated Field Production (MMsm\({}^{3}\))** & \\ \hline \hline  & **Case 1: Open Hole** & \
\begin{tabular}{c} **Case 2: Open Hole** \\ **+50\% Fracking** \\ \end{tabular} &
\begin{tabular}{c} **Case 3: Open Hole** \\ **+100\% Fracking** \\ \end{tabular} \\ \hline First year & 19,887.7 & 29,531.1 & 38,354.1 \\ Average 2 nd–7 th year & 4054.58 & 5994.15 & 7914.71 \\ Cumulative 20 years & 77,642.4 & 112,000.2 & 148,485.9 \\ \hline \hline \end{tabular}
\end{table}
Table 5: Estimated field production data.  
The economic analysis of a well has been carried out based on 3 options: no stimulation, 50% and 100% stimulation by fracking; and 5 possible construction costs: 7.5-15 MMEUR (Figure 8). These costs include the preparation of the land where the well will be located, the complete drilling and the well structure itself. A well abandonment cost of 300,000 EUR each has also been taken into account.  
Fixed costs have been estimated at 100,000 EUR per year, including personnel costs, while variable costs, including maintenance or possible eventualities, will be estimated at 0.2 EUR/1000 scf of gas extracted.  
In case 1, open hole, the investment per well is not economically profitable since the resulting NPV is negative. However, the whole is still profitable unless the cost per well is around 15 MM EUR. Since natural gas is included in the EU Taxonomy [16], energy transition grants are available that would make the operation viable even if fracking technology is not used. It would be a case of giving priority to national supply, even if it is not as economically profitable as the other options (cases 2 and 3).  
Given the potential benefits, both economically and in terms of security of supply, more comprehensive studies [39] would be required to fully characterize the reservoir and be able to more accurately assess its profitability.