PNGE 405: Multidisciplinary Team Project

Department of Petroleum and Natural Gas Engineering

West Virginia University
Dr. Kashy Aminian
Progress Report 3
 Executive Summary

The following report aims to discuss the progress made by Group 15 on the

multidisciplinary team project required by PNGE 405. The purpose of this project is to work as

a team of engineers in order to develop two prospects. The prospects include an oil reservoir

overlain by a coal property. After evaluating both prospects for initial hydrocarbons in place and

required number of wells, it was required that group 15 determine the economic feasibility of

two different scenarios. The first scenario allowed 1 year full access, 1 year limited access (1000

acres), and l additional year of limited access (500 acres) to the oil reservoir and coal bed

methane. The second scenario required that the reservoir be pressure maintenance by the coal

bed methane gas. This scenario allowed for 2.5 years of full access, 2 years of limited access

(1000 acres), and two years of additional limited access (500 acres) for gas recovery only. In

addition, each scenario was performed as stimulated or non-stimulated. Upon the conclusion of

this project, the economic analysis of all four scenarios showed that the most profitable scenario

was a stimulated pressure maintenance reservoir, followed by non-stimulated pressure

maintenance, stimulated, and non-stimulated. The respective net present value of all four

scenarios is as follows: $73,231,389.21, $71,619,851.97, $52,231,653.39, and $43,833,633.96.

All data used to perform the economic analysis can be found in the appendices that follow.
 Appendix A (Christopher Ellington)

The following methodology was utilized in the process of creating excel spreadsheets that
calculated the number of wells for the four different scenarios
Table 1

Table 2

Table 3

The tables includes several variables that were not initially given to us. The equations used to
calculate these variables are as follows:

Est. R is the estimated R value is this value is initially guessed.

Np
N was calculated with the following equation:

Np
=
[ Bo B oi+( R siRs ) Bg ]Bg [ G p 1 Rn + Rn1 N p
N
n

2( N ) n1

] +
G
(B B gi )
N g
N Rn + Rn 1
BoB g R s + ( 2 )Bg

Gp
N was calculated with the following equation:
Gp R R n1
N
=G Pn1+ ( N P N Pn1 ) n
2 ( )
SL was calculated with the following equation:

( NN pn) B o
SL= ( 1S wc ) + S wc
N Boi

o
g was provided to us

kg
ko was calculated with the following equation:

kg
=12000 exp (16S L )
ko

Cal. R was calculated with the following equation:

kg B o o
Cal . R=R s+ ( )( )
ko B g g

N p was calculated with the following equation:

Np
N p= N
N

G p was calculated with the following equation:

Gp
G p= N
N

Delta( N p ) was calculated with the following equation:

delta ( N p ) =N pnN pn1

 o was provided to us

k ro was calculated with the following equation:

k ro =2S L 1

# of wells was chosen to best fit the data provided at that pressure in the tables
J n was calculated with the following equation:

ko B
J n=J i ( )( )( )
k oi
oi oi
o Bo

q was calculated with the following equation:

drawdown
max safe J n
q=

q ave was calculated with the following equation:

q n +q n1
q ave =
2

Delta(t) was calculated with the following equation:

delta ( N p )
delta ( t )=
qave n( of wells )n

t was calculated with the following equation:

t=delta ( t n ) +t n1

These are the results of sample calculations done for a reservoir pressure of 1500 psia.

R values was guessed to be

Np
=
[ Bo B oi+( R siRs ) Bg ]Bg [ G p 1 Rn + Rn1 N p
N
n

2 ( N ) n1

] +
G
(B B gi )
N g
N
BoB g R s + ( R +2R ) B
n n 1
g

Np
=
[ 1.2411.265+ ( 540490 ) .0015 ].0015 [ 2 ]N
( 843+ 540
) G
0
0 + ( .0015.00132 )

N 843+540
1.241.0015490+ ( ) .0015
2

Np
=0.03288
N

Gp
N :

G p GP n1 N P N Pn1 R Rn1
N
=
N
+
N
(N
n
2 )( )
Gp 843540 SCF
N
=0+ ( 0.032880 )
2 (
=22.736
STB )

SL :

( NN pn) B o
SL= ( 1S wc ) + S wc
N Boi

( 10.03288 )1.24110.236
SL= + .236=0.961
1.265

kg
ko :
kg
=16487 exp (15.27S L )
ko

kg
=16487 exp (15.270.961 )=0.0070
ko

Cal. R:

kg Bo o
Cal . R=R s+ ( )( )
ko B g g

1.241 SCF
Cal R=490+ ( 0.0070 ) ( 0.0015 61)=843
STB

Since Rguess is approximately equal to Rcalc our guess was correct

Np :

Np
N p= N
N

N p=0.032881.0657107=350,000 STB

Gp :

Gp
G p= N
N

7
G p=22.7361.067510 =180000000 SCF

Delta( N p ):

delta ( N p ) =N pnN pn1

delta ( N p ) =1,293,675.620=1,293,675.62 STB

 k ro :

k ro =2S L 1

k ro =20.87171=0.7434

Jn :

ko oi Boi
J n=J i ( )( )( )
k oi

o

Bo

J n=1.677 ( 0.7434 1.19 1.265

1 )( 1.22 )( 1.241 )
=1.2539

q:

drawdown
max safe J n
q=

STB
q=3001.2539=376
day

q ave :

q n +q n1
q ave =
2

376+503 STB
q ave = =440
2 day

Delta(t):

delta ( N p )
delta ( t )=
qave n( of wells )n

1293675.62
delta ( t )= =490 days
4406
 t:

t=delta ( t n ) +t n1

t=490+ 0=490 days

The following tables depict the results of all calculations for the scenario of no stimulation or
pressure maintenance.

The following tables depict the results of all calculations for the scenario of stimulation and no
pressure maintenance.
The following tables depict the results of all calculations for the scenario of no stimulation with
pressure maintenance.

The following tables depict the results of all calculations for the scenario of stimulation with
pressure maintenance.
 Gp
Pressure maintenance was performed on the reservoir by inputting a N value into the

spreadsheet that coincided with the produce gas and produced coal bed methane gas.

Appendix B (Abdoulaie Abdoulaye)

Abdoulaie Abdoulaye worked alongside Christopher Ellington in the reservoir analysis.

Abdoulaie also assisted coordinator Ashley Shamitko in final review of the report.
 Appendix C (Sean Dunfee)

Sean Dunfee utilized the following excel spreadsheet in order to calculate the produced gas
and water from the coal bed methane. This information was then used by Dan Neff in the
economic analysis. When the allowable access area of the reservoir was decreased by 2.1 and 2,
the incremental gas production from the coal bed methane was also decreased by 2.1 and 2. In
the case of a pressure maintenance reservoir, the production of coal bed methane gas was not
affected, because the target gas production was reached before the allowable access area was
decreased at 2.5 years.
The following tables show the number of wells, produced gas, and produces water for a non
stimulated coal bed methane reservoir.
The following tables show the number of wells, produced gas, and produces water for a
stimulated coal bed methane reservoir.
Appendix D (Mark Mazza)
Mark Mazza assisted reservoir analysts Abdoulaie Abdoulaye and Christopher Ellington in the

preliminary calculations necessary to calculate the number of wells for the oil reservoir. This

involved checking all calculations, tables, and results.

Appendix E (Daniel Neff)

Daniel Neff completed the following economic analysis on the four scenarios.
The following tables show the results of the economic analysis on Scenario 1: No pressure

maintenance or stimulation.

The following tables show the results of the economic analysis on Scenario 2: No pressure

maintenance with stimulation.

The following tables show the results of the economic analysis on Scenario 3: Pressure
maintenance without stimulation.
The following tables show the results of the economic analysis on Scenario 4: Pressure
maintenance with stimulation.

The following methodology was performed in order to evaluate the economic analysis of each
scenario.
 Cumulative oil, gas, CBM gas, and CBM water were recorded. In the instance of pressure
maintenance, no gas was produced from the oil reservoir until year 4.5-6.5. Also, in the
instance of pressure maintenance, the target cumulative CBM gas production was reached
at 2.5 years, thus, no further CBM gas production or water production was present. In the
non-pressure maintenance reservoir, incremental values of CBM water and gas were
calculated due to the decrease in reservoir area. Finally, in the instance of pressure
maintenance, no oil was produced from year 4.5-6.5, this time period allowed for the
production of gas only.

The number of wells were input. For each scenario, all multi-zone completion wells were
utilized.
All parameters including oil price, gas price, water handling costs, operating costs,
drilling and completion costs, and stimulation costs were calculated for the designated
time period. In the case of pressure maintenance, the economic analysis was performed at
2.5, 4.5, and 6.5 years. The cost increases depicted throughout the spreadsheet indicate
average costs over the time span with the percentage increases.
Gross revenue, operating costs, operating expenses were calculated.

Gross Revenue=Oil Revenue=Gas Revenue

Wells$ 500
OperatingCost = months
month
DrillingCompletion Costs=Wells$ DC +Wells$ CC
Stimulation Costs=Stimulation CostsWells
Water HandlingCosts=W pCost of water handling

Operating Expenses=Operating costs+ DC+Water Handling +Stimulation

Operating income before income tax was calculated.
BFIT =Gross RevenueOperating Expenses
Operating income after income tax was calculated (Net Cash Flow).

NCF=BFIT0.7

Present value was calculated

NCF
PV =
(1+r )n
Net Present Value was calculated.
NPV =NP V n1 + PV n
 Appendix F (Ashley Shamitko)

Ashley Shamitko worked with all group members to assemble the phase three progress report

and write the executive summary. Ashley organized the schedule and group expectations for this

phase. Ashley assisted in the pressure maintenance and economic analysis.