Reserves training

Exercise 1

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 Introduction: short example

Discussion

You are looking at the reserves & resources for the LEMAN field, in Nigeria.

The PSC terms are for 10+5+5 years after the first booking of reserves, with a possibility to renew and renegotiate
during the last extension. The field has been discovered in 2005 through the LA1 well (in the west – block A). The
well was not completed and undeveloped reserves were booked.

In 2008, the block D was drilled and because the operator was cash constrained, only the eastern flank has been
producing for several years through 3 only producers (LD1, LD2 & LD3) in the flank (It is well known that things are
moving slowly around the LEMAN…).
9320
9300
Today, the wells are declining, and a redevelopment plan is presented. 9280
D
9260
C LD4 LD2
A B 9320 9240
LD1 LD2-ST1 9300
Also: 9320 9300 9220 9320
9300 9320 LC1
LA3 9300
9280
- Oil price is 70 USD/stb 9260 LB2
LD7 LD5
LA4 9200 LD8
- Fixed OPEX is USD25.55 million/annum 9280LB1
9300 9220
LA1
- There is no taxes at all. 9240 9300 9320 LD3 9280
9240
9260
9260
- ABEX is estimated at 250 million USD 9280 9320
LD6
LA2 9300
9320

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 Introduction: short example

Discussion

The current plan redevelopment plan is divided into several projects, presented as follows:

- Drilling of 1 side-track well (LD2 ST1) in the northern part of the D block – the drilling is finished but the well is
not completed yet.
- Drilling of 3 new wells in the flank and 2 wells in the attic of the reservoir – this is approved
- Drilling of LB1 well in the B block (approved), with the LB2 well pending.
- Drilling of 1 well in the C block (currently investigated)
- Development of the block A through 3 wells. The project is cash flow positive and is approved internally,
although the formal approval from the authorities is only expected in 2019.
- Water injection is considered and is being investigated

The gas production is steady, but it cannot be monetized as there is no market available

Analogue data show that

• a RF of 40% is achievable without secondary drive.
• A RF of 50% could be achieved with water injection

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 Backup

9320
9300

9280
D
9260
C LD4 LD2
A B 9320
LD1
9240
LD2-ST1 9300
9320 9300 9220 9320
9300 9320 LC1
LA3
9280 9300

9260 LB2
LD7 LD5
LA4 9200 LD8

X LA1
9280 LB1
9300
9220

9240
9240 9300
9320 9260
9260 LD3 9280

9280
LD6
9320
X'
LA2 9300
9320

Exploration / uncompleted well

Producer

Planned well

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 Introduction: short example

Section X-X'
Distance [m]

1000
1200
1400
1600
1800
2000
2200
2400
2600
2800
3000
3200
3400
3600
3800
4000
4200
4400
4600
4800
5000
5200
5400
200
400
600
800
0
9100

9120

9140

9160

9180

9200

9220 TBC
Depth [ft]

9240
?? ??
9260

9280

9300 ?? ?
9320

9340

9360

9380

9400

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 Data

Block A Block B Block C Block D

- Pi ~ 3450 Psia - Pi ~ 3460 Psia - Pi ~ TBC Psia - Pi ~ 3430 Psia

- Perm [300, 1200, 1800] mD
- RSI = 650 scf/stb
- So = [0.6, 0.7, 0.8]
- Bo = 1.14
- N/G = 0.9
- OWC = 9265 ft
- GOC = ???
- Perm expected as block A - Perm expected as block D - RSI = 720 scf/stb
- RSI expected as block A - RSI expected as block D - So = [0.7, 0.8, 0.9]
- OWC = 9261 - OWC = TBC - Bo = 1.27
- GOC = not expected (TBC) - GOC = TBC - N/G = 0.9
- OWC = 9320ft
- GOC = ??? data suggest 9220ft

LD1 production LD2 production LD3 production

- Current rate = 265 stb / d - Current rate = 0 stb / d - Current rate = 300 stb / d
- BSW = 69% - BSW = 99% - BSW = 78%
- CumOil = 3.9 MMstb - CumOil = 2.4 MMstb - CumOil = 4.1 MMstb
- EUR [4.0, 4.25, 4.5] MMstb - EUR 2.4 MMstb - EUR [4.2, 4.6, 5.3] MMstb
- Reserves = [0.1, 0.35, 0.6] MMstb - Reserves = 0 MMstb - Reserves = [0.1, 0.5, 1.2] MMstb

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 Production profiles

LD1 production LD2 production LD3 production

- EUR [4.0, 4.25, 4.5] MMstb - EUR 2.4 MMstb - EUR [4.2, 4.6, 5.3] MMstb
- Reserves = [0.1, 0.35, 0.6] MMstb - Reserves = 0 MMstb - Reserves = [0.1, 0.5, 1.2] MMstb

DCA: Rate Vs Time DCA: Rate Vs Time DCA: Rate Vs time

1800.00 2500.00 2500.00
1600.00

1400.00 2000.00 2000.00

1200.00
Oil Rate [stb/d]

Oil Rate [stb/d]

Oil Rate [stb/d]
1500.00 1500.00
1000.00

800.00
1000.00 1000.00
600.00

400.00 500.00 500.00

200.00

0.00 0.00 0.00

Feb-08

Jul-09

Nov-10

Apr-12

Aug-13

Dec-14

May-16

Sep-17

Feb-19

Jun-20
Feb-08

Jul-09

Nov-10

Apr-12

Aug-13

Dec-14

May-16

Sep-17

Feb-19

Jun-20

Feb-08

Jul-09

Nov-10

Apr-12

Aug-13

Dec-14

May-16

Sep-17

Feb-19

Jun-20
Time Time Time

DCA: Rate Vs CumOil DCA: Rate Vs CumOil DCA: Oil Cut Vs CumOil
1810.00 2510.00 1.2
1610.00
2010.00 1.0
1410.00

1210.00 0.8
Oil Rate [stb/d]

Oil Rate [stb/d]

1510.00
1010.00

Oil Cut
0.6
810.00
1010.00
610.00 0.4
410.00 510.00
0.2
210.00

10.00 10.00 0.0

0.00 1.00 2.00 3.00 4.00 5.00 0.00 0.50 1.00 1.50 2.00 2.50 3.00 0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00 4.50 5.00 5.50
CumOil [MMstb] CumOil [MMstb] CumOil [MMstb]

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 Table 1

A B C D Total
Low Mid High Low Mid High Low Mid High Low Mid High Low Mid High
STOIIP [MMstb]

RF
RF+

CumOIl
Developed reserves
Developed EUR to date
Total EUR (recoverable) through primary recovery
Total EUR with water injection
Remaining max "reserves" without Injection
Remaining max "reserves" with Injection

Total nb of wells (planned + drilled) 3 2 1 9

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 Table 2 – Economics

Include all approved projects. Use 10% discount for NPV

Rate Cash flow CAPEX OPEX ABEX Annual CF DCF

stb/d MM USD MM USD MM USD MM USD MM USD MM USD
0 0.0
1 0.0
2 0.0
3 0.0
4 0.0
5 0.0
6 0.0
7 0.0
8 0.0
9 0.0
10 0.0
11 0.0

total 0.0 0.0 0.0

total within License 0.0 0.0 0.0
Total outside license 0.0 0.0 0.0

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 Table 3 – Project by project

A B C D Total
Low Mid High Low Mid High Low Mid High Low Mid High Low Mid High
Reserves Manager Comments
Recovery for water injection (max potential)
NFA
Project 1
Project 2
Project 3
Project 4
Project 5
Project 6
Project 7
Project 8

Total EUR
Reserves
Developed producing
Developed non producing
Undeveloped
Contingent Resources
Prospective resources

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 Glossary

 Pi : initial pressure

 GOR: Gas Oil Ratio (amount of gas dissolved in oil) – above 500 scf/stb, we generally have light oil

 RSI : initial GOR (as the GOR will change with pressure)

 EUR: estimated Ultimate Recovery

 BSW: water cut = water production / (oil production + water production). A new well should have 0% BSW, and a dead well will
have close to 100% water cut

 So = 1- Swi (Ref STOIIP formula)

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