Integrated thermo-economic analysis of repurposed hydrocarbon wells for closed-loop coaxial geothermal systems in South Texas

The global push to decarbonize energy systems and reduce fossil fuel dependence has renewed interest in geothermal energy as a clean, dispatchable thermal resource. Converting depleted oil and gas wells into geothermal heat extractors is among the most economically viable deployment strategies, eliminating the drilling cost barrier, which accounts for 50–60% of total geothermal project expenditures. This study presents a fully integrated thermo-economic framework for repurposing vertical and horizontal hydrocarbon wells in South Texas into closed-loop coaxial systems for direct-use applications. Unlike prior studies that treat thermal performance and economic evaluation separately, this work couples transient thermal-hydraulic wellbore simulation with project-level economic modeling to directly link subsurface heat extraction to financial viability metrics. Two formations were investigated: the Lobo Sand Member (vertical well, 3.3 km TVD, 140.9 °C BHT) and the Eagle Ford Shale (L-shaped horizontal well, 3.5 km TVD, 178.28 °C BHT). A total of 70 simulation scenarios systematically varied mass flow rate, injection temperature, formation thermal conductivity, and lateral length. Thermal outputs, outlet temperature, and net thermal power were directly integrated into an economic model assessing Levelized Cost of Heat (LCOH), Net Present Value (NPV), and Internal Rate of Return (IRR) to define economically optimal operating windows. Results show the vertical configuration reaches an operational optimum near 23 kg/s, after which thermal breakthrough causes a decline in performance, while the horizontal l -shaped well delivers over three times the thermal power and an LCOH of $42/MWh versus $95/MWh at the vertical optimum. An increase in injection temperature was found to reduce the value of the project, particularly in the less efficient vertical system, where LCOH increased by over $40/MWh. Conversely, higher formation thermal conductivity proved to be a powerful screening criterion, as it substantially reduced LCOH in both systems by approximately $50–60/MWh in the vertical case and $25/MWh in the horizontal case. Furthermore, the analysis strongly demonstrates that while a higher bottom-hole temperature contributes a moderate 27–30% to thermal performance, the lateral extension of a horizontal well is the dominant factor, yielding a remarkable 121–127% improvement in thermal output. This finding provides crucial guidance for the future selection and design of geothermal projects from repurposed oil and gas wells, illustrating the superior potential of horizontal drilling infrastructure