Project Economics Help

FratBro23
Category:
Economics
Price: $125 USD

Question description

I need help on this HW assignment. I need good work on this please. It shouldn't be too hard for someone who knows their stuff. The data is given at the end

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Important economic parameters as follows:

·  20 years until the end of the lease

·  All CAPEX investments for primary depletion have achieved payout

·  Oil Price WTI Differential (quality and transportation) = $11.90 / bbl

·  CAPEX for Waterflood Implementation:

o  Research and Experimental Costs = $1,000,000

o  Facility and Equipment = $20,000,000

o  Miscellaneous Costs = $5,000,000

o  Water Injection Well (8) = $12,000,000

·  OPEX:

o  Field/Facility (Fixed costs) = $8,012,114 / year

o  Revenue from gas = gas costs

o  Oil Costs = $0.10 / bbl

o  Gross Fluid Lifting Costs = $0.07 / bleq

o  Water Injection/disposal Costs = $0.001 / bbl

o  Production Well Costs = $58,000 / well / year

o  Injection Well Costs = $18,000 / well / year

o  Well Power Costs = $25,000 / well / year

·  Other Data:  Make assumptions as necessary

1.   Show the full field oil production profile  

a.  Show the historical data, the primary production forecast and the incremental oil production forecast from water injection

2.  Conduct the project economics to determine the size of the project

a.  Conduct project economics (NPV10, ROR, payout) on the primary depletion case

b.  Conduct project economics (NPV10, ROR, payout) on the incremental waterflood production

c.  Conduct project economics (NPV10, ROR, payout) on the total project (PD+WF) production

d.  Make observations to a, b, c and the impact discounting has on NPV

e.  Explain why economics for the waterflood project should be conducted separately from the primary depletion case

3.   Divide the project between the government and the oil company as if the field were in Weld County, Colorado

a.  Assume the oil company is the surface and mineral owner

b.  Show on a pie chart how the NPV10 for the primary depletion case is divided between the government and oil company

c.  Show on a pie chart how the NPV10 for the waterflood case is divided between the government and oil company

d.  Show on a pie chart how the NPV10 for the total field (PD+WF) is divided between the government and oil company

e.  Make observations as necessary

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Liquid Production
Time 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20
Year 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036
Incremental Oil, bbl 0 4,385,279 8,332,031 10,086,142 10,700,081 10,700,081 9,910,731 8,770,559 7,454,975 6,139,391 4,823,807 3,332,812 2,192,640 1,403,289 964,761 526,234 175,411 0 0 0 0
Incremental Water, bbl 0 97,551 192,911 231,278 257,419 257,419 1,046,769 2,186,941 3,502,525 4,818,109 6,133,693 7,624,688 8,764,860 9,554,211 9,992,739 10,431,266 10,782,089 10,957,500 10,957,500 10,957,500 10,957,500
Incremental Gas, cf 0 1,315,583,780 2,499,609,183 3,025,842,695 3,210,024,424 3,210,024,424 2,973,219,344 2,631,167,561 2,236,492,427 1,841,817,293 1,447,142,159 999,843,673 657,791,890 420,986,810 289,428,432 157,870,054 52,623,351 0 0 0 0

Tutor Answer

(Top Tutor) Daniel C.
(997)
School: UT Austin
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