A Methodology to Determine Economic Viability for Early Phase Projects in Under-appraised Fields with Ambiguous Data

Abstract

AbstractLong interpretation time after drilling appraisal wells results in evaluating uneconomic development options further than they should be considered. This study presents how a project team developed a structured approach to evaluation of the results of an appraisal well in order to minimize turnaround time in making decisions on economic viability of a project after completion of the appraisal well.A project team was created to define the opportunity and evaluate the economic viability of the project. The team developed a structured approach to facilitate rapid evaluation of the appraisal well results against an established project economic viability framework. The developed methodology consists of entering a preliminary production forecast and facilities and drilling costs into an economic model. A varying EUR (Expected Ultimate Recovery) multiplier was then utilized to determine the minimum required EUR to make the project economic based on DPI (Discounted Profitability Index) threshold. Different development scenarios in terms of facilities design and recovery mechanism were evaluated in this study. Once the minimum required EUR was obtained from the economic model, the team calculated the minimum appraisal well OHIP (original Hydrocarbon In Place) volume needed for an economic opportunity assuming a drainage area based on regional benchmarking study. The analysis also included a procedure to adjust the calculations based on net pay thickness in the appraisal well location relative to average field net pay thickness. The values obtained from this exercise were then used as a signpost for the appraisal well and was checked against the data collected from the well. This allowed for a quick economic viability analysis of different development scenarios and identification of scenarios that needed to move to the next phase for more detailed analysis.