Sidetrack and Recompletion Risks in Oil Fields. III. Recompletion and Production Modeling with Time

Abstract

The inclusion of models of production of oil with time and of selling price, costs and their temporal variations, all influence the timing decision of when to undertake a recompletion to another horizon relative to potential residual gains from a currently producing horizon. In this paper we show how models of such effects can be incorporated into the evaluation of whether, and when to undertake recompletion. Three simple numerical illustrations are given to demonstrate the influence of different choices of production models on the assessment of the best time to undertake a recompletion job.

Sidetrack and Recompletion Risks in Oil Fields VII Sidetrack and Production Modelling with Time

“…Two basic case histories are used to illustrate the major involvement of the many parameters that go into providing such an assessment, using the quantitative model development illustrated in Tables II and III, and in the appendix to Lerche and Noeth (2001c). First, one provides a pattern of oil production on a year-by-year basis together with a model of selling price per bbl, and also development costs, inflation and discount models with time.…”

“…These values include the costs of undertaking the sidetrack as well as the costs and net gains per bbl. The fraction B S and b A of the residual estimated ultimate recoverable reserves (REUR) that can be lifted by the sidetrack under the different modelled boundary conditions also have to be evaluated (Lerche & Noeth, 2001c), values in the future are only assessed. Then, using an Excel spreadsheet code (Table I), one can evaluate the residual worth of the producing Well A in competition with the worth of the sidetrack, and so decide whether a sidetrack at that time is profitable or not.…”

“…stabilize after about 5 years for this particular case study (see Figure 5 in Lerche and Noeth, 2001c). All other parameter values are kept as for the first example, including the high success probability of 80% for the sidetrack and the low probability of 20% that the sidetrack will kill the producing well A.…”

“…All other parameter values are kept as for the first example, including the high success probability of 80% for the sidetrack and the low probability of 20% that the sidetrack will kill the producing well A. As already described in detail in Lerche and Noeth (2001c), the skewed production curve (Fig. 7) results in a greater cash flow earlier in the life of the field.…”

Sidetrack and Recompletion Risks in Oil Fields IV. Recompletion Decisions and Effects of Uncertain Parameter Values and Distribution Choices

“…Thus it is necessary to convert estimates of total cash flow and total costs to a prescription involving the rate of such costs and gains with time. This application to recompletion scenarios was developed and discussed in some detail in Lerche and Noeth (2001c). This paper focuses on assessing the uncertainties that are inherent in each of the different parameters that contribute to output values that form the basis for making a decision of whether or when to undertake a recompletion development in a producing horizon.…”