PROBLEM # C.

4
YEAR
1
2
3
4
5

NCF (MM$)
-10.8
7.2
5
3.5
2.5

PROBLEM # C.5
YEAR
1
2
3
4
5

NCF (MM$)
-30
15.4
12.4
10.5
5.3

CDNCF (MM$)
-30
-14.6
-2.2
8.3
13.6

CDNCF (MM$)
-10
-5
-1
2
4

NCF (MM$)
-10
5
4
3
2

NCF "A" (MM$)

-17
6
5
5
4
4

NCF "B" (MM$)

-12
5
5
4
2

PV(8%) @ END OF THE YEAR

-10
6.1728395062
3.9691612051
2.5726044848
1.7014579926
4.42

ROR=
20.2%
POT= 3.21 YEARS
P/I=
0.45
PROBLEM # C.6
YEAR
0
1
2
3
4

ROR=

17.8%

PROBLEM # C.7
YEAR
1
2
3
4
5
6

ROR "A" =

13.8%

ROR "B" =
P/I "A" =
P/I "B" =
POT "A"=
POT "B"=
PROBLEM # C.8
YEAR
1
2
3
4

14.5%
0.41
0.33
4.25
3.5

NCF "A" (MM$)

-8.5
4.9
4.1
2.9

NCF "B" (MM$)

-11
6.1
4.9
3.9

PV @ RATE
0
-8.50
4.90
4.10
2.90
3.400

PV @ RATE
0.02
-8.33
4.71
3.86
2.68
2.919

PV @ RATE
0
-11.00
6.10
4.90
3.90
3.900

PV @ RATE
0.02
-10.78
5.86
4.62
3.60
3.299

RATE
0
0.02
0.04
0.06
0.08
0.1
0.12
0.14
0.101

PV "A"
3.400
2.919
2.481
2.082
1.717
1.383
1.078
0.799
1.368

PV "B"
3.900
3.299
2.753
2.255
1.801
1.387
1.008
0.661
1.367

FOR "A"
RATE

FOR "B"
RATE

PV(8%) @ MID OF THE YEAR

-10.3923048454
6.415002991
4.1248733224
2.6735290053
1.7682070141
4.59

PROBLEM # C.3
YEARLY PAYMENT =
PROFIT OF THE BANK

PV(10%)
-27.2727272727
12.7272727273
9.3163035312
7.1716412813
3.2908830122
5.23

PV(20%)
-25
10.6944444444
7.1759259259
5.0636574074
2.1299511317
0.064

PV(30%)
-23.0769230769
9.1124260355
5.6440600819
3.6763418648
1.427444094
-3.22

PV(10%)
-10
4.5454545455
3.305785124
2.2539444027
1.3660269107
1.4712110

PV(12%)
-10
4.4642857143
3.1887755102
2.1353407434
1.2710361568
1.0594381

PV(14%)
-10
4.3859649123
3.0778701139
2.0249145486
1.1841605547
0.6729101

CDNCF "A" (MM$)

-17
-11
-6
-1
3
7

CDNCF "B" (MM$)

-12
-7
-2
2
4

PV(10%) "A"
-15.4545454545
4.958677686
3.7565740045
3.4150672768
2.4836852922
2.2578957202
1.42
PV(10%) "B"

-10.9090909091
4.132231405
3.7565740045
2.7320538215
1.2418426461
0.95

PV @ RATE
0.04
-8.17
4.53
3.64
2.48
2.481

PV @ RATE
0.06
-8.02
4.36
3.44
2.30
2.082

PV @ RATE
0.08
-7.87
4.20
3.25
2.13
1.717

PV @ RATE
0.04
-10.58
5.64
4.36
3.33
2.753

PV @ RATE
0.06
-10.38
5.43
4.11
3.09
2.255

PV @ RATE
0.08
-10.19
5.23
3.89
2.87
1.801

EQUIVALENCE RATE
4.500
4.000
3.500
3.000
2.500
PV

2.000
1.500
1.000
0.500
0.000
0

0.02

0.04

0.06

0.08
RATE

0.1

0.12

0.14

0.16

1.000
0.500
0.000
0

0.02

0.04

0.06

0.08
RATE

0.1

0.12

0.14

0.16

PROBLEM # C.3
$56,402,366.5
225,609,466.08

PV(16%)
-10
4.3103448276
2.9726516052
1.9219730206
1.1045821958
0.3095516

PV(18%)
-10
4.2372881356
2.872737719
1.825892618
1.0315777503
-0.0325038

PV(20%) "A"
-14.1666666667
4.1666666667
2.8935185185
2.4112654321
1.6075102881
1.3395919067
-1.75

PV(30%) "A"
-13.0769230769
3.550295858
2.2758306782
1.7506389832
1.0773162974
0.8287048441
-3.59

PV(20%) "B"

PV(30%) "B"

PV(20%)
-10
4.1666666667
2.7777777778
1.7361111111
0.9645061728
-0.3549383

0.12

-10
3.4722222222
2.8935185185
1.9290123457
0.803755144
-0.90

-9.2307692308
2.9585798817
2.2758306782
1.4005111866
0.5386581487
-2.06

PV @ RATE
0.1
-7.73
4.05
3.08
1.98
1.383

PV @ RATE
0.12
-7.59
3.91
2.92
1.84
1.078

PV @ RATE
0.14
-7.46
3.77
2.77
1.72
0.799

PV @ RATE
0.101
-7.72
4.04
3.07
1.97
1.368

PV @ RATE
0.1
-10.00
5.04
3.68
2.66
1.387

PV @ RATE
0.12
-9.82
4.86
3.49
2.48
1.008

PV @ RATE
0.14
-9.65
4.69
3.31
2.31
0.661

PV @ RATE
0.101
-9.99
5.03
3.67
2.65
1.367

PV-A
PV-B

0.14

0.16

0.12

0.14

0.16

A SMALL RESERVOIR HAS BEEN PRODUCING THROUGH 3 WELLS WITH ESP FOR A LONG TIME. THE PRO
DECLINING EXPONENTIALLY WITH A DECLINE FACTOR = 0.10 /YEAR THE CHIEF RESERVOIR ENGINEER
PROJECT WHICH INVOLVES THE DRILLING OF 3 NEW WELLS EQUIPPED WITH ESP WHICH WILL COST 23
FOLLOWING DATA IS PRESENTED:
TOTAL REMAINING RESERVES
WILL BE
RATE IN 01/01/2005
WILL BE 3000 B/D INSTEAD OF 1500 B
EXPONENTIAL IN BOTH CASES
WILL BE 4.00 MM$/YEAR INSTEAD OF 2.5 MM$/YEAR
VARIABLE OPEX
UNCHANGED @ 3 $/B
OIL PRICE
THE MANAGMENT ASKS YOU TO RUN A TECHNO/ECONOMIC ANALYS
ACCELERATED PROJECT OR NOT.
INCREASE OR DECREASE ?

SOLUT
REMAINING RESERVES FOR CASE (1) =
REMAINING RESERVES FOR CASE (2) =
DECLINE FACTOR FOR CASE (2)

(1500*365)/0.1
5475000*(1.1)
(3000*365)/6022500

CASE (1)
END OF
YEAR
start
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17

Qo (B/D)
1500
1357.256
1228.096
1111.227
1005.48
909.796
823.2175
744.878
673.9934
609.8545
551.8192
499.3066
451.7913
408.7977
369.8954
334.6952
302.8448
274.0253

CASE (1)
NP (STB)

Qo (B/D)

NP (STB)

521015.136253
471433.990645
426571.11487
385977.506187
349246.890118
316011.654312
285939.169357
258728.459716
234107.191462
211828.946666
191670.757167
173430.873028
156926.743358
141993.189281
128480.750768
116254.190792
105191.141832

3000
2501.259209
2085.432543536
1738.735784756
1449.676297879
1208.67206338
1007.734043063
840.2013518114
700.5204562108
584.0610807301
486.9627189315
406.0066617224
338.5093005161
282.233168416
235.3127705286
196.19274476
163.57630319
136.3822449093

1001223.13915584
834772.865692442
695994.439245486
580287.500191832
483816.484574117
403383.479168989
336322.214009952
280409.678327876
233792.4300701
194925.156235768
162519.44736682
135501.088122611
112974.448165396
94192.7929517927
78533.530264031
65477.5719293933
54592.1265904494

18
19
20
21
22
23
24

247.9483
224.3529
203.0029
183.6846
166.2047
150.3883
136.0769

95180.8811755
86123.2227693
77927.5145235
70511.7310354
63801.6526513
57730.1226514
52236.3751228

113.7091153412
94.8053239648
79.0442298764
65.9033692989
54.9471364543
45.8123436882
38.1961821786

45516.3531244168
37949.3991375129
31640.4280229058
26380.3039896638
21994.6594301212
18338.1148161357
15289.4595198523

ECONOMIC EVALUATION ASSUMING OIL PRICE 45 $/B

CASE (1)
END OF
YEAR
start
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24

NP (STB)
521,015.14
471,433.99
426,571.11
385,977.51
349,246.89
316,011.65
285,939.17
258,728.46
234,107.19
211,828.95
191,670.76
173,430.87
156,926.74
141,993.19
128,480.75
116,254.19
105,191.14
95,180.88
86,123.22
77,927.51
70,511.73
63,801.65
57,730.12
52,236.38
4,868,353

CAPEX ($)
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0

OPEX ($)
4,063,045.41
3,914,301.97
3,779,713.34
3,657,932.52
3,547,740.67
3,448,034.96
3,357,817.51
3,276,185.38
3,202,321.57
3,135,486.84
3,075,012.27
3,020,292.62
2,970,780.23
2,925,979.57
2,885,442.25
2,848,762.57
2,815,573.43
2,785,542.64
2,758,369.67
2,733,782.54
2,711,535.19
2,691,404.96
2,673,190.37
2,656,709.13
69,605,058

GR ($)
23,445,681.13
21,214,529.58
19,195,700.17
17,368,987.78
15,716,110.06
14,220,524.44
12,867,262.62
11,642,780.69
10,534,823.62
9,532,302.60
8,625,184.07
7,804,389.29
7,061,703.45
6,389,693.52
5,781,633.78
5,231,438.59
4,733,601.38
4,283,139.65
3,875,545.02
3,506,738.15
3,173,027.90
2,871,074.37
2,597,855.52
2,350,636.88
219,075,872

CASE (1)
CNCF
POT

149,470,814
NA

ROR
PV(10%)
P/I

NA
88,670,093
NA

A LONG TIME. THE PRODUCTION RATE IS 1500 B/D IN 01/01/2005. THE RATE IS
F RESERVOIR ENGINEER PROPOSED TO THE MANAGEMENT AN ACCELERATION
P WHICH WILL COST 23MM$.
THE

WILL BE INCREASED BY 10%

B/D INSTEAD OF 1500 B/D
DECLINE
FIXED OPEX
ARIABLE OPEX
WILL REMAIN
45 $/B
NO/ECONOMIC ANALYSIS TO HELP THEM DECIDE WHETHER TO GO AHEAD WITH THE
WILL YOUR DECISION CHANGE IF OIL PRICES

SOLUTION
5475000
BBL
6022500
BBL
0.1818181818 /YEAR

CE 45 $/B
NCF ($)

PV (10%)

19,382,635.72
17,300,227.61
15,415,986.82
13,711,055.26
12,168,369.38
10,772,489.48
9,509,445.11
8,366,595.31
7,332,502.04
6,396,815.76
5,550,171.80
4,784,096.67
4,090,923.22
3,463,713.95
2,896,191.53
2,382,676.01
1,918,027.96
1,497,597.01
1,117,175.36
772,955.61
461,492.70
179,669.41
-75334.8486400377
-306072.244841686
149,470,814

17620577.9297
14297708.7662
11582259.0718
9364835.22974
7555600.01799
6080789.47386
4879848.9596
3903078.45845
3109696.65247
2466249.38998
1945301.35732
1524360.63306
1184994.73737
912104.138958
693325.226269
518539.721634
379471.606083
269355.985877
182667.097911
114894.92617
62361.7725026
22071.6637593
-8413.25711383
-31074.1676872
88,670,093

END OF
YEAR
start
1
2
3
4
5
6
7
8
9
10
11
12
13
14.00
15.00
16.00
17.00
18.00
19.00
20.00
21.00
22.00
23.00
24.00

NP (STB)
1,001,223.14
834,772.87
695,994.44
580,287.50
483,816.48
403,383.48
336,322.21
280,409.68
233,792.43
194,925.16
162,519.45
135,501.09
112,974.45
94,192.79
78,533.53
65,477.57
54,592.13
45,516.35
37,949.40
31,640.43
26,380.30
21,994.66
18,338.11
15,289.46
5,455,922

CASE (2)
CNCF
POT

ROR
PV(10%)
P/I

CASE (1)
CAPEX ($)
23,000,000
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0

CASE (2)
154,148,740

OPEX ($)
7,003,669
6,504,319
6,087,983
5,740,863
5,451,449
5,210,150
5,008,967
4,841,229
4,701,377
4,584,775
4,487,558
4,406,503
4,338,923
4,282,578.38
4,235,600.59
4,196,432.72
4,163,776.38
4,136,549.06
4,113,848.20
4,094,921.28
4,079,140.91
4,065,983.98
4,055,014.34
4,045,868.38
68,367,767

GR ($)
45,055,041.26
37,564,778.96
31,319,749.77
26,112,937.51
21,771,741.81
18,152,256.56
15,134,499.63
12,618,435.52
10,520,659.35
8,771,632.03
7,313,375.13
6,097,548.97
5,083,850.17
4,238,675.68
3,534,008.86
2,946,490.74
2,456,645.70
2,048,235.89
1,707,722.96
1,423,819.26
1,187,113.68
989,759.67
825,215.17
688,025.68
245,516,507

NCF ($)

PV (10%)

-23000000
38,051,372
31,060,460
25,231,766
20,372,075
16,320,292
12,942,106
10,125,533
7,777,206
5,819,282
4,186,857
2,825,817
1,691,046
744,927
-43902.6960247
-701591.728911
-1249941.97897
-1707130.6832
-2088313.16877
-2406125.23622
-2671102.02304
-2892027.23243
-3076224.30393
-3229799.17772
-3357842.70017
154,148,740

-23000000
34592156.2223
25669801.9497
18956999.5855
13914401.3442
10133617.52
7305481.50761
5195999.45442
3628124.22489
2467943.66353
1614214.45125
990431.545739
538819.274543
215778.766118
-11560.9520116
-167955.481804
-272023.79267
-337746.704787
-375601.479487
-393420.703052
-397042.295527
-390801.291067
-377901.769548
-360698.022213
-340906.988107
102,223,770

147%
102,223,770
6.70

OIL PROJEC
SELECTE
SPRING 2
BY B

ROJECT EVALUATIO
ECTED PROBLEMS
NG 2010 SOLUTION
BY BATRUNA

ATION
EMS
UTION