By Tariq Siddiqui
Premise
Subsurface or Reservoir Complexity drives the appraisal. Front-End Loading (FEL) is getting the requisite data early, to manage reservoir uncertainty and complexity that can impact the asset development and impair its value.
Reservoir Front-End Loading (FEL) comprises of getting seismic data, cores, logs, SCAL & CCAL, production test and pressure test data, that are critical to manage the reservoir complexity and uncertainty and must be done right. Following points are important for FEL and successful outcomes.
1. A good appraisal and Reservoir FEL will deliver successful project outcome
2. Successful capital project outcome are the ones that have Realized NPV >= Projected NPV, and they largely depends on front-end loading (FEL)
3. Main drivers for NPV gain/loss in order of importance are; Initial production, Reserves volatility, Cost and Schedule
4. Aggressive schedule driven projects destroy value by downgrading reservoir FEL and appraisal effectiveness
5.Reservoir complexity drives data and appraisal needs and FEL: Reservoir FEL, Wells FEL, and Facilities FEL
6.FEL is early commitment on data gathering to apprise and de-risk the opportunity
6.A good appraisal and reservoir FEL will deliver production promise and successful asset outcome