The E&P industry typically sees a 20 percent downgrade in recoverable reserves when the first updates are computed for a project after startup. This then translates into delayed plateaus or more capital investment in some cases, or worse―a reserves downgrade that erodes the economics. Often, the reasons for this performance are traced back to poor quality appraisal data or rushed appraisal resulting in inadequate data. However, companies often ignore the time and budgetary pressures that business puts on appraisal teams leading to such outcomes.
Therefore, in response to an overwhelming request from our clients, IPA developed the Appraisal Program Assessment tool. These assessments can be conducted prior to any capital investment to assess the level and quality of reservoir appraisal at a stage when reservoir uncertainties dominate project feasibility. Using IPA’s proprietary statistical tool and given the amount and quality of appraisal completed to date, we can predict the probability that the project will experience a more than 20 percent downgrade in recoverable reserves. This information is then used as a basis to address the following questions:
Depending on the exact stage the project is at, the analysis also helps to screen and evaluate various development concepts, including both facilities and wells. The analysis, based on the complexity of the reservoir and field characteristics, is designed to assist the subsurface and/or asset team in optimizing the appraisal strategy through: