Sidetrack and Recompletion Risks in Oil Fields VII Sidetrack and Production Modelling with Time

Abstract

The decision to undertake a sidetrack well for an already producing oil field is not only dependent on the chances of it being successful and not killing the already producing well, or on the residual producible reserves and the costs of sidetrack, but also on the likely worth relative to the net worth without the sidetrack. This paper focuses on the aspect of the timing decision: when or whether it is worthwhile to undertake a sidetrack during the anticipated lifetime of a producing field. Models of oil production with time, selling price, costs and their temporal variations are incorporated into an Excel spreadsheet code in order to demonstrate how timing influences sidetrack worth. Two simple numerical models illustrate how the choice of different production models can alter decision-making. Furthermore, the examples studied also show how sidetrack worth is a function of the fraction of the residual estimated ultimate recoverable reserves (REUR) that can be lifted by the sidetrack.