Well Production Analysis for 3 wells in the US
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By:
William Joseph Comer
Charles Craig
Rizwan Chaudhry
Presented to:
Shahab Mohaghegh and Associates
October 30, 2003
Executive Summary:
Our firm was hired as a consultant to suggest a well with the best projected production, in a 10 year period in the immediate future, out of a narrowed selection of 3 wells from a list of 94 wells located throughout the United States. After conducting proper research and analyzing the data presented to us by respected sources of past production of the 3 wells, we, as a firm, concluded that Flowers, Vernon 8-80, which is located on Latitude line 35.839 and Longitude line -100.616, would generate the most profit. Included are all the procedures we followed to reach our conclusion. In essence we selected 3 wells based on a comparable amount of both natural gas and crude oil.
Terminology/Intro:
bbls -> Blue Barrels (standard measurement for standard oil)
MCF -> Thousand Cubic Feet of gas (standard measurement for gas)
-All values are set in present monetary value unless otherwise stated or noted.
Methodology:
q = qi (1+Dibt) -(1/b) -> Hyperbolic Decline Formula Used to estimate the future productivity of the wells based on current knowledge of previous production.
Formula explained further:
q = flow rate @ time "t"
qi = initial flow rate
Di = initial decline ( slope of tangent line at qi )
b = hyperbolic exponent ( stabilizes as x -> ∞ )
P = F
(1 + i ) n -> This formula was used to determine approximate future value of profit earned.
Formula explained further:
P = present monetary value
F = future monetary value
i = interest rate
n = number of times the interest rate is compounded (usually
based on years)...