Heavy Oil Economics

[PatMcG]

Anyone who has worked in Heavy Oil probably sympathizes with me here.

I am a junior engineer at my company, and one of my tasks is to track the economic performance of engineering enhancement projects. For light/conventional oil and gas production it is s simple enough task. I compare predicted costs and incremental production to what actually happens after the work is complete.

However, when I get into the heavy oil fields, it isn't as simple at all. There are virtually no declines for heavy oil production on a rate vs time/ rate vs cum. graph... all I end up seeing is a jump in rate whenever a workover is done (pump size increases, etc) steady production for a while and then a virtual suicide until the next workover.

So my problem is that I can't predict incremental reserves for my economic forecasts.

Which brings me to another daunting thought. Almost every well I look at in my heavy fields reqires some sort of enchancement project every few months. Clearly, I cannot evaluate the success of a project on an annual basis, nor can I evaluate the success of a well on a project to project basis.

Any thoughts or suggestions on my plights?

~Patrick McG.

 

[PatMcG]

Maybe I should be a little more clear with my request.

What sort of expectations should I be placing on my heavy oil operations? It is just the nature of the beast that these wells are worked over every few months, so clearly it is not a failing project if it sees increased production.

Any thoughts?

~P. McG

 

[nonAPI]

PatMcG,

I do not do economic forecasts on a regular basis nor do I have the "credentials" to do them. I have had to try and make forecasts on "hard to forecast" projects before. My suggestion would be to base the prediction on past performance of a group of similar or near by wells. Check out the past production/workover histories and see if you can find a strong enough trend to base assumptions on. My bet is you will have no problem finding a strong trend.

SPE standards for reserves estimation allows it. Sometimes it's all you have. Sometimes it's the best predictor.

Cliff