Field Development Phasing
When considering development strategies, choosing the appropriate phasing is often a top-level focus decision. A phased development with an extended appraisal period and minimal spending is a common way to mitigate risk. Unfortunately, it often also leads to value destruction. Having a robust stochastic project model is key to evaluate the risk-reward trade off that always will exist.
The PetroVR Solution
PetroVR offers many features to help investigate the impact of development phasing. A methodology to determine the value of an extended vs. short exploration and appraisal program is described in this website Solution: Assessing the Value of Additional Appraisal Activities. During the development drilling phase, the major physical limitations defining development pace are the number of rigs deployed and facility capacity. If facility capacity is the driver, PetroVR has features to automatically defer drilling to honor capacity or automatically add capacity.
Rig availability is easily manipulated with the rig scheduling features available in PetroVR.
With a full stochastic PetroVR project model in place, the features discussed above provide the user with the capability to evaluate decision trade-offs. We recommend that the PetroVR Scenario Tool be used for easy comparison of stochastic results for competing strategies.
Figure 1: Graphical Output from the Scenario Tool
Figure 1 shows a graphical output from the Scenario Tool. It is a typical cumulative probability curve (“S-curve”) for Net Present Value for an accelerated vs. a staged development. You can see that the acceleration strategy (purple curve) has more upside, but also more downside value compared to a staged development strategy (blue curve). These kinds of curves provide valuable insights for a decision executive by clearly showing the risk vs. reward tradeoff.
PetroVR is a full cycle asset exploration and development simulation system for the Oil and Gas Industry.
It enables petroleum engineers and planners to understand the risks and rewards of various technical development options while considering the impact of multiple resource constraints. PetroVR provides E&P companies with a simple and intuitive way to visualize, understand and communicate the trade-offs related to major asset level decisions.