Upstream oil and gas is a very capital intensive business. Shareholders look for profitability and growth against a backdrop of declining production and decreasing new play sizes. Optimal project selection is necessary to maximize the potential of any portfolio or business plan. The main goal of a Business Plan is to select a portfolio of projects (drilling, exploration, etc.) that maximizes value (and minimizes risk) and satisfies all constrains faced by management (drilling rig availability, facilities capacity, capital availability, human resource availability, etc.)

These problems can be expressed in the form of a set of linear or non/linear equations such that global optimum values can be determined using Linear Programming or Genetic Algorithms. In this paper we will show how these techniques can be used to solve optimization problems utilizing a combination of both techniques and the use of software designed for that purpose.

In our case study, we were able to define and implement a plan that increased expected production, reduced capital requirements by 20%, kept the activity within the capacity of the drilling rigs and facilities available and clearly prioritized the proven undevelop reserves within a maximum of 5 years for planned development. The total time invested on designing the plan was less than 5 days and the execution became clear to all the parts involved via a tool to share the information. The plan as designed was executed in 2011 flawlessly.

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