Geothermal energy stands as a sustainable, environmentally friendly, and enduring source of renewable energy that can significantly reduce greenhouse gas emissions. In recent years, abandoned/orphaned oil and gas wells (AOGW) are utilized as geothermal energy wells due to their subsurface characteristics and existing infrastructure. Therefore, the present study explores the potential of harnessing thermal energy from AOGW using combined coaxial and U-shaped closed-loop geothermal system (CCLGS). The proposed CCLGS has an insulated U-shaped geothermal system (IU-CLGS) as a primary system to harness geothermal energy. However, temperature of the formation rock surrounding the insulated pipe can be higher than that of injection fluid temperature, which can be extracted for direct heat application. Therefore, a coaxial two-pipe heat exchanger has been incorporated with the IU-CLGS. This system is termed as the secondary system and aims to extract more thermal energy surrounding the insulation. For this instance, CHT (conjugate heat transfer) module integrated with k–ε model has been employed in the study. Furthermore, the study has been extended to compare the performance of the CCLGS with that of conventional closed-loop systems. The findings showed that the proposed CCLGS produces thermal power up to 48% more than the conventional U-shaped heat exchanger under the identical geometric and operational conditions. Moreover, the proposed CCLGS with Rockwool insulation produces a primary fluid having a temperature of 78 °C and a secondary fluid at 48 °C temperature. Overall, the study proposes a novel heat extraction system with improved thermal performance and a promising new approach for repurposing abandoned oil fields as geothermal reservoirs. Also, these results hold significant potential for researchers and stakeholders focused on harnessing clean, renewable energy sources.