A number of articles and books have been written about evaluating and assessing the risk and uncertainty associated with oil reserve evaluation and acquisition. Very little has been included in the standard texts regarding evaluating Enhanced Oil Recovery (EGR) projects in particular miscible floods. Due to the size and scope of most tertiary recovery projects, standard evaluation rules and techniques are too general and vague to adequately model these schemes. Therefore, it is incumbent upon the Engineer to familiarize himself with the risks and uncertainties associated with a prospective EOR project

This paper presents a procedure for identifying the risks associated with miscible EOR projects. And moreover, evaluation techniques will be discussed which will assist the analyst in evaluating, qualifying and quantifying the uncertainties associated with EOR.


Acquisitions of oil and gas properties at the moment appear to be a highly favoured method for companies to increase their own reserve base. There have been a great number of acquisitions in the last two years and this trend is likely to continue into the future. In Canada, acquisitions and divestitures include EOR projects, particularly miscible flood schemes. Evaluating these projects is complex. The objectives of an Evaluation Engineer have changed little since the first evaluation was reported in 19281. The basic tool for the evaluator is, and will continue to be, Cash Flow analysis. Determining the parameters involved in setting up a Cash Flow model is based on sound engineering principles and good business judgement. An evaluation needs to answer fundamental questions2:

  1. What will be gained if a venture is successful?

  2. What is being risked and what are the uncertainties?

  3. What is the probability of success?

Answers to these questions are the basis for Cash Flow model and analysis.

Basic components of the Cash Flow model are: production forecast, revenue generated by production, expenses and capital incurred recovering production, royalty, taxes, incentives and the relation of present value techniques (ie discount rate). Each of these components require certain definitive evaluation techniques pel1aining to and associated with miscible flood projects. An analyst must use sophisticated evaluation techniques to determine the fair market value or viability of an EOR project. The intricacy of a miscible flood project magnifies the complexity of an evaluation. Frequently, time and budget constraints placed on an analyst rule out the possibility of a complete simulation study to aid with an evaluation. Thus there has to be considerations that sUPPOI1 the development of an evaluation format which will prudently and adequately represent the performance of a miscible EOR project.

Miscible Flood Methods

Evaluating an active miscible flood involves determination of the miscibility criteria that were originally established for the project. For example, "Is the project first contact (FCM) or multi contact (MCM) miscible?", and "Is the solvent vaporizing or condensing?" In general if a reservoir has high pressure a leaner (lower molecular weight), less expensive solvent might be used to achieve miscibility.

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