Better Investment Planning of Gas-Producing Operations By Computer Simulation

Abstract

Depending on the degree of selectivity possible and the degree of variation in the character of the reserves, an optimum solution to planning investments for multiple-reservoir gas operations can be very complex. A gas sales simulation computer program has been developed to assist in making investment decisions leading to maximum profits. The simulation permits an integrated case study calculation of the reservoir depletion process, well deliverability, gas liquid recovery and economics for a predetermined plan of operation. The factors simulated, data requirements and program logic are described in this article and applications to various field problems are discussed. The case study simulation technique has been used successfully in operations and investment planning for gas sales from a producing complex. It is considered to be a valuable tool both for detailing short-term investments and for forecasting long-range investment requirements and deliverability.

Introduction

From the standpoint of operations planning, a gas-producing property will be complex when a large number of investment alternatives exist. For most properties, the basic alternative will be between well development and amount of compression. There are unique situations, however, where several reservoirs will underlie a single-interest lease or unitized tract (only one operator and only one royalty owner), and equitable lease participation is not a factor in the producing operations. The investment alternatives for this type of property are far greater than usual since selection may be exercised in the depletion of individual reservoirs. The program to be discussed was developed for operations and investment planning for a complex property where all reservoirs have only one operator and one royalty owner. It is recognized that before this type of program can be generally applied, it is mandatory that the problem of equitable lease participation be solved. Because the reserves in a typical complex property may have wide variations in reservoir size, well deliverability, gas value and development cost, a judicious selection and timing of investments is necessary for maximum profits. However, an optimum solution to investment planning can be very difficult. The calculation of an optimum can be made using linear programming techniques if the sale involves only a very few reservoirs. For a large number of reservoirs, the excessive number of equations required for linear programming makes this calculation technique (and thus true optimization) impractical. This article describes a computer program which has been used to evaluate investment decisions by simulating complex gas-producing operations. Basically, the program computes the 20-year deliverability and economics for a complex system according to data which have been supplied to it. In other words, it permits a case study approach to evaluating a predetermined plan of operation. From an evaluation of several potentially attractive plans, a near-optimum solution can be selected.

Simulation Structure

The gas producing process simulated is illustrated schematically in Fig. 1. It may be described as the calculation of simultaneous gas flow from a group of reservoirs, interconnected at field separation stations and through gathering system network, to a single delivery point.

JPT

P. 157^