Oil And Gas Property Evaluation Harvard Case Solution & Analysis


The company has decided to lease 3 gas wellsfor the period of five years in the future ahead. After the completion of a time period of five years, the company has intents to start working on a new well. In addition to this, the current well has already been used for the extraction of gas, well one and three wereproducing gas since 2013 and well two was producing gas since March 2014. The history of the current wells along with their gas producing years are mentioned in the dissertation while the task is to evaluate production history which would be used to project future production from the new well.

One of the crucial undertakings is to do an economic analysis for the purpose of analyzing the feasibility as well as profitability of the proposed project byusing given forecasted values. In order to determine the feasibility of the project in the forthcoming years, it is vital to use Duong and ARP’s method so that the decline in the curve analysis would be doneeasily on the three wells.

One of two members in the group is responsible for the EA and DCA based ARP Method and remaining one is responsible for Duong’s Method. Each of the two membershave done a curve analysis. In addition to this, the total field composite is used for the purpose of calculating profitability of the project. Furthermore, the profitability and feasibility of the new well is assessed on the basis of net present value, economic analysis and internal rate of return. This would better depict the feasibility of the project.

Oil And Gas Property Evaluation Harvard Case Solution & Analysis


Decline curve analysis is supposed to be the means of forecasting future value of the well production of gas and oil which is based on the existing or current history of the production used in order to evaluate the future value of the well production. The performance of the well can also be determined by using thistechnique.

Theengineerstend to use the flow or production rate of the decline curve of oil and gas production with the hyperbolic, harmonic or exponentialequation. It is a type of regression analysis, when b=0 gives the best match of the given data or history after which, there is an exponential decline. Afterwards, there is a hyperbolic decline curve and later on, harmonic decline curve when b=1.

In order to pursue the decline curve analysis, the group members are given production history and flow rate as well. The history can be viewed in the tabulated chart.

Well 1Well 2Well 3
Dateq (Mscf/day)Gp, MscfDateq (Mscf/day)Gp, MscfDateq (Mscf/day)Gp, Mscf


Decline Curve Analysis ARP’s Method

The first step should be to plot the flow rate of production to the negative bthtime versus power. This would be used in order to create a linear line. The intercept and slope of the linear line would be used further in order to calculate q and Di.................

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