1. 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