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Economics of PWRI: Proposal

$. Economics of PWRI: Proposal. Outline of proposal. Enable ourselves to provide “level zero” cost estimates of different water handling / disposal options to Operating Units Based on this estimate impact on NPV Objective: Help operators “guide their thoughts”

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Economics of PWRI: Proposal

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  1. $ Economics of PWRI: Proposal

  2. Outline of proposal • Enable ourselves to provide “level zero” cost estimates of different water handling / disposal options to Operating Units • Based on this estimate impact on NPV • Objective: Help operators “guide their thoughts” • No decisions made on the basis of this - you need level 4 for this • Build a number of cost databases for different generic environments, e.g. on-/offshore Europe, USA, GoM, Middle East • We should be able to estimate UTC

  3. Elements of proposal (1) CAPEX • Drilling & completion costs incl. cost breakdown (time-depth costs, completion equipment, contingencies, etc.) • Facilities costs (pumps, cleaning equipment, extra deck space required, control equipment, contingencies, etc.)

  4. Elements of proposal (2) OPEX • A ‘good’ Opex estimate should be activity-based (i.e. not generic percentages of Capex and production) Activity-types: • Well services / -maintenance: PLT’s, fall-off survey’s, re-perf, re-stim, wellhead maintenance, corrosion monitoring, etc. • Routine workovers: e.g. tubing change-out • Production costs: Operator manpower, power consumption, chemicals, routine measurements, pipeline tariffs, etc. • Maintenance costs • Overhead and related costs (direct allocated; mark-ups)

  5. Elements of proposal (3) ECONOMICS • Provide simple spreadsheet to do ‘quick-look’ economic evaluation Extra input required: • Depreciation regime • Tax / royalty percentages • Possible state participation • …..

  6. Proposed way forward • Agree on a limited set of ‘typical’ operational environments • Data gathering amongst sponsors, contractors, and third parties (e.g. major service companies) • Build simple spreadsheet with relevant Capex items + ‘typical’ costs • Build Opex spreadsheets + MSAccess databases for the set of ‘typical’ operational environments • Re-work economics spreadsheet into a more generic form

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