Title
A probabilistic approach to tight gas economic evaluation: The future of Argentina
Date Issued
01 January 2017
Access level
metadata only access
Resource Type
conference paper
Author(s)
Publisher(s)
Society of Petroleum Engineers (SPE)
Abstract
Tight gas reservoir has potential to provide a significant contribution to meet the global energy demand. However, they involve technical and economic challenges for the commercialization that need to be addressed with the multidisciplinary integration of Geoscience, Engineering and Economics. Unconventional resource plays and tight gas reservoir, are generally characterized by lower geologic risk but higher commercial risk. For that reason, a precise understanding of the potential range can lead to the commercial success; this weighs on the economic evaluation process. We will focus on local tight gas plays that differ in several aspects, especially in terms of the stage of commercial growth. Due to the large number of uncertainties, deterministic economic modeling provided results with low confidence and was considered as merely a scoping indication of commercial potential. Deterministic and single-point solutions are unable to provide a real check for the input assumptions, which typically leads to overly optimistic results. A better solution still needs to be found. This paper transmits the consistent and systematic process employed in the evaluation of several tight gas plays, all softwares (e.g. Crystal Ball) tested, the vital role of multidisciplinary participation, iterative modeling efforts and conclusions. Thus, the generation of percentiles (P10, P50, and P90) for the economic indicators: NPV, IRR and Payout, through a probabilistic model that takes three scenarios in each input (Capex, Opex, Gas Price and Reserves); can yield to a more precise and sensible in return calculations of investments on an outlook, with the associated risk from a commercial point of view. This case study was developed on a sectorial block of the Lajas Formation of the Neuquen Basin, with six wells in production (vertical wells 2000-2500 m), a GOIS of 129.22 BCF and a current recover factor estimated in 19 %. An optimum number of infill wells will be proposed with the aim to improve the recover factor higher than 35 % with and an incentive price of Gas Plus fixed at 7.5 US$/MMBTU from the National Government. Thus, the learning curve would be reduced and become to an energy source that enable to fulfill the future energy demand to a medium term for Argentina 2020 year, since the development of Vaca Muerta Shale Gas will have a long-term contribution. Positive results are expected, which will be increased with the addition of each infill well of 4.2 % (5.38 BCF) in the EUR with a yield of investment (NPV/Investment) of 39 %.
Volume
0
Language
English
OCDE Knowledge area
Ingeniería del Petróleo, (combustibles, aceites), Energía, Combustibles
Scopus EID
2-s2.0-85040531848
Resource of which it is part
SPE Latin American and Caribbean Petroleum Engineering Conference Proceedings
ISBN of the container
9781510841956
Conference
SPE Latin America and Caribbean Petroleum Engineering Conference 2017 Buenos Aires 17 May 2017 through 19 May 2017
Sources of information:
Directorio de Producción Científica
Scopus