Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

I need help with this question Please construct an excel spreadsheet similar to the one we did in lecture to provide a look at the

I need help with this question

image text in transcribed
Please construct an excel spreadsheet similar to the one we did in lecture to provide a look at the economics of a well. Expand your spreadsheet to allow room for gas production as well as oil. Average oil rate for the first year = 300 Bbl/day Oil decline rate = 30 %/year GOR = 200 Scf/Bbl Gas decline rate is the same as the oil. Well Cost = $10,000,000 Initial Oil Price = $65]be Oil Price escalation = 1 %/year Initial gas price = $2.50/M5cf Gas price escalation = 3 %/year Operations Cost = $15]be Operations cost escalation = 6%lyear Using your spreadsheet, when will this well payout? What is the return on this investment? This is calculated by dividing the total net revenue by the well cost, thus providing the return in S profit per 5 invested. What would the return on investment be if a $1,000,000 workover were done in year seven as an extra capital cost? Based on your two investment spreadsheets, is the work over expense a good idea, or would it have been more profitable to allow the well to cease production after year six

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Global Development And The Environment Perspectives On Sustainability

Authors: Joel Darmstadter

1st Edition

1317335686, 9781317335689

More Books

Students also viewed these Economics questions

Question

2. Listen to family members, and solve problems with them.

Answered: 1 week ago

Question

Mortality rate

Answered: 1 week ago

Question

Armed conflicts.

Answered: 1 week ago