OilSim day 2

Licence award,spread risk-negotiations

3D seismic maps

Task 3yesterday

Today’s Challenges

Exploration & appraisal drilling

Drilling rigs ,Suppliers forThe drilling

phase

Recovery factor,

Depletion strategy

Number of wells,

Tube size

Task 4 Task 5

Depletion plan & prodution profile

Single Rigs

Double Rigs

Triple Rigs

Max drilling depth is important

Rig cost = drilling days * day rate

• Base camp (accomodation, cantine,+storage of equipment)• Transport on land, cars/trucs• Transport by air (personnel, equipment)• Well services (pipe, casing , drilling mud• Well analysis (electrical logs, cores)

Upto 9 Star quality- Good: normally

costs more Bad: cheaper, but reliability is

low, so you risk extra drilling time and extra costs

EIA survey: more knowledge about the area.

Less probability for drilling problems.

Less severe consequences if you run into problems.

EIA: enviromental impact analysis shows where it may be difficult to drill.

Place your mouse where to drill

Layer 1 Cretaceous

Layer 2 Paleocene

Layer 3 Eocene

Proven volume (MBOE) counts Test may increase proven volume Remember to tick the boxes!

Volume Range, e.g. 1-897 Proven Reserves e.g. 1

The total proven oil and gas = 18MBOE Allowing for 25% recovery factor0.8 Production profile factor and 10% discount factor per year

18MBOE x 25% recovery factor = 4.5MBOE

Sales price without discount factor -> 4.5MBOE x $50 = $225,000,000

Sales price allowing for production profile-> $225,000,000 x 0.8 (production factor)

= $180,000,000 Reduced sales price with 10% discount

factor per year = $ 67,397,022

From Probable volume to proven reserves

Exploration well: 0 to 1572 MBOE (after drilling) 11 to 1266 MBOE (after testing)

First appraisal well: 25 to 1033 MBOE (after drilling) 34 to 910 MBOE (after testing)

Second appraisal well: 65 to 850 MBOE (after drilling) 101 to 752 MBOE (after testing)

Only proven MBOE counts

Appraisal wells - proven reserves increase

Range between proven and possible is decreased

Expected costs ifyou developed thefield (CAPEX) andproducedthe oil (OPEX)

Now total expenses are lower than the sales value and so we have a positive licence value

After your first drill in each well, reprocess seismic

Decide which discoveries to drill how many appraisal wells into

Ultimately, you should either: Get a positive net present value, Or a conclusion that additional

appraisal wells will not result in a net present value

Click on Apply for More Funds Tab. 1 KP for each $100,000 applied for. Answer the questions: All correct gives

cash and you can keep CPs. One wrong gives cash and you keep ½ of your CPs. Two wrong gives ½ cash and you lose all CPs. All wrong, you get no cash and lose all CPs.

Expensive money if less than 10 knowledge points: Apply for cash and be fined $5million for each $20million requested.

Licence award,spread risk-negotiations

3D seismic maps

Task 3yesterday

Today’s Challenges

Exploration & appraisal drilling

Drilling rigs ,Suppliers forThe drilling

phase

Recovery factor,

Depletion strategy

Number of wells,

Tube size

Task 4 Task 5

Depletion plan & prodution profile

Make a well plan for each reservoir in your block, choosing: Number of production wells Tubing size

Aiming to choose a plan that maximises value of block

Increased sales value Decreased drilling costs

Highest well flow rate

Read the maximum well flow rate Most suitable Tube size

Most suitable tube

1. Click the Reservoir tab

2. Click the magnifyingglass for the reservoir3. Study the data forthe reservoir

Click on Drilling Rig

1. Submit plans with different number of wells and tubing sizes

1. Review Reservoir information after each revised plan

2. Aiming to maximize sales value and minimize drilling costs, whilst increasing Recovery Factor

3. You can amend your well plans until the deadline

4. Credibility points – upto 100 kp if plans are optimal for all your reservoirs

5. After deadline – Value of Licence will be adjusted based on final Well Plan submitted

Results

¯, ShcDepth

Degree of fillReservoir-thickness

Area Input data

Gross rock volume Net to Gross Porosity

Hydrocarbon saturation

Oil shrinkage /

Formation volume factor

Gas-oil-ratio

GRV x N/G x Phi x Shc x Bo/FVF x GOR = In-Place resources

In place resources x Recovery factor = Recoverable oil/gas

Minimum – Most likely – Maximum - of each parameter

Monte Carlo simulate in GeoX

P90 – Mean – P10 recoverable resources