Technology Focus: Reserves/Asset Management (December 2018)

Abstract

Technology Focus In the last year, the oil and gas industry has continued to recover against a backdrop of steadily rising oil prices. Companies, however, continue to take a cautious approach in their investment decisions as they try to maximize value and minimize risk. The future remains uncertain, with oil-price fluctuations factored into decision-making. Further uncertainty prevails in an environment of increasing societal and investor accountability and a continually evolving energy landscape. Critically, any entity assessing project viability at any stage of the exploration-to-production life cycle must ensure an evergreen examination of the commercial likelihood on the basis of ongoing data analysis, refining development synergies coupled with strategic reframing as required. A rigorous assessment of both the technical and commercial basis for a project must be maintained at all times. Greater transparency and objectivity are required in the decision-making process to ensure future economic success. We cannot afford to become complacent. The papers here address various aspects of project evaluation and investment decision-making—evaluating plays on a clustered-development basis (paper OTC 28499), redefining the framework for capital-allocation management (paper OTC 28685), or reframing exploration strategy to maximize project value (paper SPE 187143). Lastly, in June 2018, the Society of Petroleum Engineers (SPE, and on behalf of the associated sponsor societies) released an update to the Petroleum Resources Management System (PRMS). While the update has been described as “an evolution, not a revolution,” you are encouraged to familiarize yourself with the communication released by SPE, conduct your own review of the new document, critically examine your current processes, test your understanding, ensure that project evaluations and their associated reserves and resources estimates are compliant with PRMS 2018, and use the system to help optimize resource management. Recommended additional reading at OnePetro: www.onepetro.org. SPE 189730 Practical Reservoir-Management Strategy To Optimize Waterflood Pools With Minimum Capital Employed by Alireza Qazvini Firouz, Husky Energy, et al. OTC 28746 Balanced Maturity Model for Oil and Gas Portfolio Assets by Marcelo Bastos, B-in Partners, et al. SPE 189815 Predicting Economic Value in Unexplored Regions of an Unconventional Liquids-Rich Play by J. Yip, Repsol, et al.