l3 Question
3
Q. The table below shows oil production and well drilling for a water-flood field Year Wells (inj + prod) Oil rate (bopd) 0 0 0 1 15 13,333 2 10 26,667 3 0 40,000 4 0 40,000 5 0 40,000 6 0 40,000 7 0 40,000 8 0 40,000 9 0 32,877 10 0 27,223 11 0 22,697 12 0 19,045 13 0 16,075 14 0 13,644 15 0 11,642 16 0 9,981 17 0 8,597 18 0 7,437 19 0 6,460 20 0 5,633 RESERVES 168,379,042 Facilities costs are assumed to be spread evenly over three years. If wells cost $10 mm each and total facilities costs are $1.2 billion, use the software provided ('economic indicators') to calculate Discounted Cash Flow, Net Present Value and PI over 20 years of production assuming an oil price of $100/bbl, a discount rate of 10%, taxation at 40% and inflation at 3%. Plot the results. Use the software provided to determine the real rate of return (RROR) Look at the effect of changing the following (keeping everything else constant) 1. reducing discount rate to 6% 2. decreasing the oil price to $80/bbl 3. increasing facilities costs to $ 1.8 billion
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petroleum economics questions
Transcript of l3 Question
Q. The table below shows oil production and well drilling for a water-flood fieldYearWells (inj + prod)
Oil rate (bopd)
000
11513,333
21026,667
3040,000
4040,000
5040,000
6040,000
7040,000
8040,000
9032,877
10027,223
11022,697
12019,045
13016,075
14013,644
15011,642
1609,981
1708,597
1807,437
1906,460
2005,633
RESERVES168,379,042
Facilities costs are assumed to be spread evenly over three years. If wells cost $10 mm each and total facilities costs are $1.2 billion, use the software provided ('economic indicators') to calculate Discounted Cash Flow, Net Present Value and PI over 20 years of production assuming an oil price of $100/bbl, a discount rate of 10%, taxation at 40% and inflation at 3%. Plot the results. Use the software provided to determine the real rate of return (RROR)Look at the effect of changing the following (keeping everything else constant)
1. reducing discount rate to 6% 2. decreasing the oil price to $80/bbl3. increasing facilities costs to $ 1.8 billion
