Prospect Evaluation/Financial Planning
Models
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The
two models described here help the Planning
Department at Natural Gas Corporation
of California (NGC) evaluate various
economic and financial decisions. The
Prospect Evaluation model can also be
used by engineers in estimating the
reserves in a field. In general, the
two models help in analyzing the following: |
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- Tthe economics
of prospecting for oil and gas reserves,
producing out the current wells,
etc.
- Tthe fi.nancial
impact of various decisions based
on detailed information on individual
wells,
future projections on fi.nding reserves,
loans from diff.erent source, etc.
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The
models have been developed on the IBM
PC/XT and are designed to be “user-friendly”
and easy to use. (They are entirely
menu driven and have screen- editing
capability). For example, it typically
takes between 5 and 15 minutes to explain
the entire data entry portion of the
model. Learning how to correctly use
the model requires somewhat more time,
since the user needs to have some understanding
of the economic and fi.nancial aspects
of Oil and Gas companies.
The computer models allow the user
to access a database of information
by wells on farmouts, subleases, overrides,
etc. The models have extensive report
generation capabilities and report
before and after tax economics, revenue
requirement statements, capitalization
statements, etc. All the above capabilities
support the extensive analytical capabilities
of the models.
In addition, the models are extremely
fast. The Prospect Evaluation Model
can analyze a well in less than 2
seconds on a PC (which is seven to
eight times faster than the current
fastest commercially available packages
on the market).
Some of the questions that
the Economic/Financial models can
answer are:
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