Optimization of Equity Redeterminations Through Fit-for-Purpose Evaluation Procedures
- Paul F. Worthington (Gaffney, Cline & Associates)
- Document ID
- Society of Petroleum Engineers
- SPE Economics & Management
- Publication Date
- October 2011
- Document Type
- Journal Paper
- 226 - 234
- 2011. Society of Petroleum Engineers
- 4.1.2 Separation and Treating, 1.6 Drilling Operations, 5.1.7 Seismic Processing and Interpretation, 5.1.1 Exploration, Development, Structural Geology, 4.1.5 Processing Equipment, 5.7.2 Recovery Factors, 5.4.2 Gas Injection Methods, 1.2.3 Rock properties, 1.6.9 Coring, Fishing, 5.5.8 History Matching, 5.5 Reservoir Simulation, 4.3.4 Scale, 5.2.1 Phase Behavior and PVT Measurements, 5.2 Reservoir Fluid Dynamics, 5.6.3 Deterministic Methods, 5.1.5 Geologic Modeling, 5.6.1 Open hole/cased hole log analysis, 5.1 Reservoir Characterisation, 5.1.8 Seismic Modelling, 5.8.8 Gas-condensate reservoirs, 1.7.5 Well Control
- equity redetermination, unitization, evaluation procedures
- 3 in the last 30 days
- 577 since 2007
- Show more detail
- View rights & permissions
|SPE Member Price:||USD 10.00|
|SPE Non-Member Price:||USD 30.00|
Equity redetermination is most commonly encountered where a straddling field is developed as a discrete entity through a process of unitization. It is enacted through evaluation procedures that prescribe the technical methodology for requantifying different license shares, or tract participations, in a field unit as more data become available. The formulation of these procedures usually takes place at unitization--it is based on appraisal data--and, therefore, it is guided by simplified perceptions of reservoir character. For this reason, many such technical procedures have been found to be lacking when they are applied later at the equity redetermination stage. These shortcomings can take the form of ambiguous wording, misleading definitions, technically inappropriate specifications, contradictory prescription, or simply a lack of sufficient detail to render the intended process meaningful. They have impeded the determination of revised tract participations by triggering interlicense disagreements that might otherwise have been avoided.
With the objective of reducing this unhelpful impact, experience of redetermination situations is used to illustrate the nature and consequences of poorly constructed procedures for the recomputation of tract participations. The analysis is then flipped to generate a framework of key elements of technical procedures together with indications of how they are best implemented. These matters form the basis for a high-level set of protocols for a more efficient and effective redetermination of equity that would avoid the previously encountered shortcomings. The protocols encompass the proper incorporation of data character, a sound technical basis for redetermination, a balance between under- and over-prescription, an auditable deterministic ethos, and adherence to good international petroleum practice. They constitute recommendations for a better approach to the compilation of fit-for-purpose evaluation procedures within those unitization agreements that make provision for a future redetermination of equity. The recommendations are equally applicable to domestic and international unitizations. The principal benefit lies in an enhanced efficiency of the equity-redetermination process, which feeds through to a greater collective asset value.
|File Size||727 KB||Number of Pages||9|
AIPN. 2006. Model Form International Unitization and Unit OperatingAgreement: Exhibit F--Redetermination technical procedures. Houston, Texas:Association of International Petroleum Negotiators (AIPN).
Amaefule, J.O., Altunbay, M., Tiab, D., Kersey, D.G., and Keelan, D.K.1993. Enhanced Reservoir Description: Using Core and Log Data to IdentifyHydraulic (Flow) Units and Predict Permeability in Uncored Intervals/Wells.Paper SPE 26436 presented at the SPE Annual Technical Conference andExhibition, Houston, 3-6 October. http://dx.doi.org/10.2118/26436-MS.
Gural, N. 2010. ExxonMobil Extends Life of Texas field. Forbes, 14January 2010. http://www.forbes.com/2010/01/14/exxonmobil-texas-oil-markets-equities-hawkins-field.html.
King, R.L. and Lee, W.J. 1976. An Engineering Study of the Hawkins(Woodbine) Field. J Pet Technol 28 (2): 123-128.SPE-5528-PA. http://dx.doi.org/10.2118/5528-PA.
Sharples, D.M., Myres, J.C., Morgan, C.L., and Kuzemko, N.C.J. 1994.The Markham Field, A Trans-Median Development. Paper SPE 28839 presented at theEuropean Petroleum Conference, London, 25-27 October. http://dx.doi.org/10.2118/28839-MS.
Worthington, P.F. 2011. Contemporary Challenges in Unitization and EquityRedetermination of Petroleum Accumulations. SPE Econ & Mgmt 3 (1): 10-17. SPE-138890-PA. http://dx.doi.org/10.2118/138890-PA.