SPE Members

Abstract

The use of microcomputers in the petroleum industry is growing rapidly; and word processors, spreadsheets, data bases and engineering programs are the most popular types of software being used. This paper presents the results obtained using a combination of commercial software and engineering application programs developed at West Virginia University. Two major types of this combined application are described in case studies. The first case uses a spreadsheet as both a storage area for well data and as a method for information analysis and presentation. Advantages gained include ease of operation, cost reduction and time savings. The second case combines an engineering program with a Monte Carlo simulation technique to evaluate reserves. The procedure is readily performed with a microcomputer and allows rigorous statistical performed with a microcomputer and allows rigorous statistical testing of results obtained using the limited data commonly available. Computer usage of the types discussed could lead to faster and cheaper reserves analysis and thereby to more effective development and recovery of our petroleum resources.

Introduction

The use of microcomputers in the petroleum industry is growing rapidly. Word processors, spreadsheets, data bases and engineering programs are the most popular commercial software being used. However, these application programs have their limited uses. The joint uses of these programs will extend the capability of their applications. The objective of this paper is to illustrate the joint applications of commercial paper is to illustrate the joint applications of commercial and self-developed software programs in petroleum engineering applications.

DATA BASE AND SPREADSHEET APPLICATIONS

In this paper, the authors chose an oil and gas property evaluation problem as the illustration for data base and spreadsheet applications.

Case Study A: Tax Analysis Model

An investment decision analysis tax model has been written in the spreadsheet for a well. In this particular model, the investment costs consist of tangible, intangible and operating expenses; a total of 20 different cost items are considered (Table 1). A data base file is used for cost data collection. In the output files, different categories of items are listed: gross oil and gas production, investment costs (tangible and intangible), federal production, investment costs (tangible and intangible), federal income tax, advalorem tax and severance tax, revenue and working interests, the discounted factor (Table 2). It is evident that an excessive number of calculations in this model make spreadsheet applications the most favorable technique to use. The spreadsheet makes sensitivity analysis (the effect of a change in an input parameter on the overall well profitability) quick and efficient. parameter on the overall well profitability) quick and efficient. If you want to see the rate-of-return on the final income cash flow for this well, you only need to change the rate. The rest of the calculations are refigured in a matter of seconds. The final income cash before tax and after tax are shown in the final spreadsheet in Tables 3 and 4. This spreadsheet not only saves you a lot of trouble of erasing and figuring the calculations, it also serves as a data base for the investment analysis. In this particular example, sensitivity analysis on rate-of-return can be particular example, sensitivity analysis on rate-of-return can be performed quite easily. A list of the cash flow on different rates performed quite easily. A list of the cash flow on different rates is shown in Figure 1.

This particular tax model has been completed with Appleworks' spreadsheet. The model has also been transferred quite easily in the Lotus 1-2-3 spreadsheet.

P. 169

This content is only available via PDF.
You can access this article if you purchase or spend a download.