Probabilistic Estimates of Deepwater Offshore Field Abandonment Cost

25-May-16

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Why probabilistic?

What is known?

What is not known?

What can change (uncertainty)?

How can probabilistic estimates improve?

How to deal with uncertainty? – Probability!!!

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2014 Estimate

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4 pipelines, 3 EHU, 2 drill centers, jumpers

1 subsea well TA, leave wellhead

5 subsea wells to PA leaving wellhead

1 subsea well to PA removing wellhead

2014 Estimate -> Update to 2016

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2014 Probabilistic Estimate 4 pipelines, 3 EHU, 2 drill centers, jumpers

1 subsea well TA, leave wellhead

5 subsea wells to PA leaving wellhead

1 subsea well to PA removing wellhead

P10 P50 P90

Subsea Field - Duration Variance$ 4,388,667 $ 5,054,011 $ 6,046,677

Well PA - Remove Wellhead - Duration Varied$ 21,108,555 $ 24,355,233 $ 29,186,019

5 Well PA - Leave Wellhead - Duration Varied$ 97,815,183 $ 113,850,544 $ 137,635,157

Well TA to PA - Duration Varied$ 14,143,240 $ 17,749,254 $ 22,954,455

Total $ 137,455,645 $ 161,009,042 $ 195,822,308

Probabilistic – Cumulative Distribution Function

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P10 P50 P90

Well PA - Remove Wellhead - Duration Varied $ 21,108,555 $ 24,355,233 $ 29,186,019

What is known? Subsea field:

4 pipelines, 3 EHU, 2 drill centers, jumpers

1 subsea well TA, leave wellhead 5 subsea wells to PA leaving wellhead 1 subsea well to PA removing wellhead

Define actions Identify steps and durations for each

step Refine durations with minimum, most

likely, maximum Define requirements & limitations of

actions• Run rates, trip times, time to surface,

tool up, tool down, flush time, cut, etc…• Define limitations due to company or

vendor requirements

Start to build the model

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Min Time (Hrs) Max Estimated Cost

13.6 16.0 19.2 $561,578

4.3 5.1 6.1 $177,833

5.1 6.0 7.2 $210,592

0.0 0.0 0.0 $0

0.0 0.0 0.0 $0

0.0 0.0 0.0 $0

0.0 0.0 0.0 $0

0.0 0.0 0.0 $0

12.8 15.0 26.3 RU riser, attach to well head, pull tree cap $501,480

4.3 5.0 6.5 $167,160

6.8 8.0 10.4$283,056

6.0 7.0 9.1 $234,024

8.5 10.0 17.5 Perform injectivity test, POOH CT, RIH CT with cement head $334,320

3.4 4.0 5.2 $152,228

Work Breakdown StructureDock Loadout and unload is Shared btw # of wells

Diagnostics

RU test and chart annulars

Contingency to squeeze annulars if injection established

Mobilize and Demobilize is Shared btw # of wells

Sea Trials (Ballast)

Arrange Equipment on Deck

RU cementing equipment, mix, pump, & squeeze perforations

RU pump on tubing, establish injection, squeeze perfs

RU SL for dummy run,Run dummy run to perf depth

RU e-line, RIH perf assy to perf to establish communication to each

zone

RU CT, RIH to perf depth

Identify unknowns – that have impact

Problems with wells – additional steps

Potential – re-squeeze, additional plug, additional trip to recover hardware

Define chance and impact – add to model

Problems with operations – extended duration

Extend flushing, additional WOC time

Redefine max duration if can

Define chance and impact – add to model

Expected issues – required contingencies

Back up, stand by eqt

Add duration and spread

What is not known?

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Oil price

Resource rates

Resource availability

Weather

Additional costs

What can change? Uncertainty

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Hope

Use distribution of rates

Define window of operations – revise above

Apply weather percentage

Apply % or cont.

Impact of modifying the model to vary rates

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Estimate with fixed 2014 Rates - Duration Varied

Estimate with Rates & Duration

Varied

Components P50 P50

Subsea Field $ 5,054,011 $ 4,455,757

Well PA - Remove Wellhead $ 24,355,233 $ 18,639,829

5 Well PA - Leave Wellhead $ 113,850,544 $ 87,216,826

Well TA to PA $ 17,749,254 $ 13,528,814

TOTAL $ 161,009,042 $ 123,841,226

Impact of modifying the model to vary rates

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Impact of modifying the model to vary rates

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2014 rates

Range of rates

Impact of modifying the model to vary rates

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2014 rates

Range of rates

Impact of modifying the model to vary rates

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2014 rates

Range of rates

How to make a better crystal ball…

Job data:

Field specific data – percentage problem wells, percentage squeeze success, durations of tasks (min/most likely/max)

WOC durations - effectiveness

Range of rates vs date of operation

Impact of previous problems – cost & duration

Better information = more accurate estimate

More data – larger pool

How can probabilistic estimates improve?

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Will use of resins be more cost effective vs risk of a repeat squeeze?

Will use of Riserless intervention be more cost effective?

Probabilistic analysis can better define the costs for comparison

Can probabilistic estimates determine a methodology?

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Questions?

Probabilistic analysis for the future…

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