Alpha Prospect Assessment Results Oil Gas Oil-Equivalent Million Barrels Oil Billion Cubic Ft Gas Million Oil Equivalent Barrels 0 MOEB 0 GCF 0 MBO Scenario 4 Low Gas Saturation 288 MOEB 288 MBO Scenario 3 Oil Only 86 MOEB 515 GCF Scenario 2 Gas Only 178 MOEB 97 GCF 162 MBO Scenario 1 Oil & Gas 6 GCF = 1 MBO Assuming 100 MOEB is needed to make prospect economic Uneconomic Uneconomic Slide 29 In the exercise, you worked an estimate for Alpha for the oil-only case We can do the same for the other 3 scenarios – scenario 4 is quite easy Oil and gas have different units and different values – we would like to adjust the gas to “oil-like” values A common conversion is that 6 GCF of gas is equivalent in value to 1 MBO The 4th column is labeled MOEB – million oil equivalent barrels For example, line 2 reports 515 GCF of gas We divide 515 by 6 to get units equivalent to oil – so we get 86 MOEB Obviously scenario 4 (low gas saturation) is not going to make us any money Can we make money if one of the other scenarios is true? To answer this, we need to estimate the cost of producing HCs at Alpha AND the value of the oil and/or gas Geoscientist and engineers work up a rough estimate of the cost to produce these fields They team up with business analysts to decide an economic threshold. Let’s assume for Alpha we need a minimum of 100 MOEBs for this area to make money Given this economic threshold, scenarios 1 and 3 could be economic; a gas-only case would not Of coarse there is still the possibility that there are NO hydrocarbons at all! Courtesy of ExxonMobil L14 – Prospect Analysis