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    Tutorial Lobster Field (Acceleration Project) Questions (LFQ)

    Uploaded by

    Lawrence Mbah
    The Lobster Field is currently producing 11,800 barrels of oil per day from an onshore reservoir. The operator is considering work-overs of the producing wells to improve short-term productivity but at the expense of longer-term production. The $10 million work-overs could be completed in 2005 and increase production rates, reducing the field life by one year but saving $2 million in fixed operating costs that year. Variable operating costs are about $1 per barrel. The current and accelerated production profiles through 2016 are presented in a table, showing higher early production under the accelerated profile at the expense of later production. The operator requests advice on whether to proceed with the planned investment.

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    Tutorial Lobster Field (Acceleration Project) Questions (LFQ)

    Uploaded by

    Lawrence Mbah
    89 views1 page
    The Lobster Field is currently producing 11,800 barrels of oil per day from an onshore reservoir. The operator is considering work-overs of the producing wells to improve short-term productivity but at the expense of longer-term production. The $10 million work-overs could be completed in 2005 and increase production rates, reducing the field life by one year but saving $2 million in fixed operating costs that year. Variable operating costs are about $1 per barrel. The current and accelerated production profiles through 2016 are presented in a table, showing higher early production under the accelerated profile at the expense of later production. The operator requests advice on whether to proceed with the planned investment.

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    Tutorial 4 - Lobster Field

    Original Title

    Tutorial 4 - Lobster Field

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    The Lobster Field is currently producing 11,800 barrels of oil per day from an onshore reservoir. The operator is considering work-overs of the producing wells to improve short-term productivity but at the expense of longer-term production. The $10 million work-overs could be completed in 2005 and increase production rates, reducing the field life by one year but saving $2 million in fixed operating costs that year. Variable operating costs are about $1 per barrel. The current and accelerated production profiles through 2016 are presented in a table, showing higher early production under the accelerated profile at the expense of later production. The operator requests advice on whether to proceed with the planned investment.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    89 views1 page

    Tutorial Lobster Field (Acceleration Project) Questions (LFQ)

    Uploaded by

    Lawrence Mbah
    The Lobster Field is currently producing 11,800 barrels of oil per day from an onshore reservoir. The operator is considering work-overs of the producing wells to improve short-term productivity but at the expense of longer-term production. The $10 million work-overs could be completed in 2005 and increase production rates, reducing the field life by one year but saving $2 million in fixed operating costs that year. Variable operating costs are about $1 per barrel. The current and accelerated production profiles through 2016 are presented in a table, showing higher early production under the accelerated profile at the expense of later production. The operator requests advice on whether to proceed with the planned investment.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
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    Tutorial Lobster Field

    [Acceleration Project]
    Questions [lfq]

    The Lobster Field is a small, onshore reservoir. The Field is currently producing 11,800 barrels
    of oil per day. The Operator is considering whether to work-over the producing wells in order
    to improve the performance of the field. The major impact of the work would be to improve
    productivity in the short term, but at the expense of production in the longer term. Some
    improvement in overall recovery is also expected.

    The work-overs would cost $10 million and could be completed during 2005. As a result of the
    accelerated production, the field lifeis expected to be reduced by one year, with a saving of $2
    million in fixed Opex in that year. . Variable Opex, related to production amounts to about $1
    per barrel. These costs are in $2004 terms.

    The current planned and accelerated production profiles are presented in Table lfq (1) below.

    Table lfq (1):- Lobster Field Production

    Year Current Profile Accelerated Profile

    2005 11800 11800


    2006 10000 10400
    2007 8510 9310
    2008 7220 8220
    2009 6150 7150
    2010 5200 5800
    2011 4440 4640
    2012 3760 3560
    2013 3200 2900
    2014 2740 2340
    2015 2340 1840
    2016 2000 0

    You are required to advise the Operator whether to proceed with the planned investment .

    Current policy of the Company is to assume an oil price of $20 dollars per barrel, constant in real
    terms over the life of the project. In this case, taxation and inflation effects are to be ignored.

    30/10/14

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