Where unitization takes place early in a pool's life, it is considered critical that the pool's life, it is considered critical that the evaluations determining participating equity be carried out quickly and accurately. Comprehensive studies of the interrelationships of all of the known variables, or commonly called unitization parameters, for a large number of land tracts with wide variance of their parameters has in the past been unwieldy and parameters has in the past been unwieldy and impractical. In order to assess accurately the impact of these unitization parameters, a computer program was developed to calculate future performance and tract value. The example used in this illustration happens to be for a unit project in the Province of Alberta, but the principle and procedures can be adapted to any project where contributory values of the tracts involved need to be assessed.
The program includes the following features:
pool allowable forecast as a time function,
distribution of pool allowables on an acreage basis, together with redistribution of individual tract's incapability to the remaining capable wells,
crude oil price as a function of time,
present worth at several discount rates,
individual tract's reserves and allowable acreage,
individual tract's initial producing capacity, start of decline, type of decline (constant percentage, harmonic or hyperbolic) and abandonment rate,
operating costs and expenditure scheduling,
complete print-out of tractperformance over 50 years, and
each company's participating equity at each discount rate.
The adaptability of the program has been demonstrated by the virtual fieldwide unitization of the Nipisi Gilwood pool in Alberta. Here 20 of the 21 operators with both wholly owned and joint interest in various parts of the pool, and under a system which grants equal allowables to all productive acreage, were able to agree despite the following variances in their major tract parameters:
tract reserves - 100 percent,
tract producing capacity - 10,000 percent and percent and
well spacing - 700 percent.
It is no longer necessary then to rely on previously established unitization weighting previously established unitization weighting patterns of various parameters to establish patterns of various parameters to establish unit equities.