IPRISK WELL CASE STUDIES
There are several ways to redevelop a mature field, not the least when it comes to what type of wells should be drilled in order to maximise NPV
Options A and B have approximately the same expected NPV, and substantially haigher than option C.
Option A has higher upside than option B, but also a marginally higher risk, in large due to the higher drilling cost.
A risk taker would go for option A, while if you are risk averse, you will go for pption B.
What is the best way to develop this small field, drill a single well into the main target only, or add a second branch at a later stage to also drain the smaller target.
Production profiles for the two possibilities have been obtained from reservoir simulation
When comparing the two solutions, it becomes evident that the one-branch option is the preferred solution.
The two-branch option has a higher upside, but has also higher risk and lower expected NPV
The more complicated a well is, the more important it is to have a good understanding and grip on uncertainties and risks.
The resulting NPV curve clearly demonstrates the huge uncertainty span when drilling a deep well in the Gulf of Mexico.
Although there is a significant downside, resulting mainly from the fact that the well might be dry, the expected (Mean) NPV
Is positive, so on this basis this well should be drilled.
The Time-depth plot clearly shows how uncertainty is increasing with time.
Sometimes it is necessary to have detailed knowledge about fluid contacts, e.g. to be able to land a horizontal producer at the desired depth.
But what is then the total cost, when also including all additional uncertainties and risks?
And is it worth the extra up-front cost to obtain an assumed increased recovery of 10 %?
There is a substantial uncertainty span in the results. But the extra cost to drill a pilot hole is justified by the additional reserves due to an optimised location of the horisontal well. The down-side is the same, but the there is a higher up-side when the pilot is included, giving a higher expected NPV.