By: Saad Ibrahim, P. Eng

The definition of economic production has changed over the years, based on our definition of permeability, as per by the US Department of Energy:

German Society Petroleum and Coal Science and Technology (DGMK) defined the permeability of tight form formation at 0.6 md, the reason unknown!

Back in the late 70’s the permeability of 1.0 mD was used as a cut-off value for reserves determination.  Therefore, back then many wells were abandoned because their permeability was just less than 1 md.  Today, a well with a permeability of 1 mD is considered good and commercial to produce.  More recently, with the major shit into unconventional and tight reservoirs, our ability to commercially produce from Nano-Darcy permeability has become possible, with the application of Multi-stage Frac of Horizontal Wells (MFHW’s).  The interesting question now, what is the permeability cut-off value for commercial production?

The common current rules of thumb are the ability of gas and oil to flow in a Nano-Darcy permeability are as follow:


However, based on reservoir evaluation, it is believed that gas being much less viscous and more mobile than oil, commercial production can be achieved for permeability less than 100 nD if an extensive network of natural fractures is present.  As a result, the combined matrix/fractures in the Stimulated Reservoir Volume (SRV) can be elevated by 10 folds or more.  A sensitivity analysis was performed to evaluate gas and oil well productivity using the Kappa/Topaze software for the typical permeability values of common formations in Canada:

Permeability for gas wells:

  • 100 nD = 0.0001 mD (Duvernay and Horn River)
  • 1000 nD = 0.001 mD (Montney)

Permeability for oil wells:

  • 100,000 nD = 0.1 mD (Cardium)
  • 10,000 nD = 0.01 mD (Bakken)
  • 100,000 nD = 0.001 mD (Montney)

One year production forecasts were generated for gas well using MFHW for different values of permeabilities, for the model input data below:


Gas production forecasts for one year, using a constant BHFP of 1000 psia and a ceiling gas production rate of 15 MMscf/d were conducted.

Results of sensitivity analysis are below:

Obviously, commercial gas production can be achieved for a formation permeability of 100 nD or even less.

Similarly, production forecast sensitivity analysis was prepared for an oil well, for one years, using the following model input data below:

Production forecasts for one year were based a constant a BHFP = 2000 psia and oil ceiling production rate of 500 B/d, are shown in the graph below:

For oil wells, formation permeability of 0.001 mD yields uncommercial production (cum oil of 5 MBbl).  However, permeability of 0.01 mD could yield an attractive investment with a cum. Oil of 25.5 MBbl.


  1. The presence of natural fracture network, can improve the permeability in the SRV and yields commercial gas wells, even for a matrix permeability of 100 nD or lower.
  2. For oil wells, a permeability in the SRV needs to be at least 0.01 mD or more to yield commercial production