Group of prospects
Evaluation of a prospect is not limited to the prospect proper, i.e. the site preparation, wells, installations for the field, flowlines to a gathering point, but also the larger infrastructure. But such infrastructure, e.g, a pipeline to an onshore terminal, is often shared by more fields. In that case the question is "What part of the infratructure should be assigned to a particular prospect". This is of particular importance in the exploration phase, where an economic cutoff has to be estimated.
Therefore group of prospects requires a two-stage evaluation. Several prospects will use the same infrastructure for the evacuation of the oil. A prospect in the group should not be penalized by the cost of the infrastructure, i.e. a long pipeline. So the evaluation goes in the following steps:
- Assume that the infrastructure is in place. Then evaluate the (local) cutoffs for the individual prospects.
- Add the ECs to an overall EC. Each prospect has of course its own cutoff that has to be used when adding prospects. Such local cutoffs avoiod the unreasaonble possibility to create a whale from many sardines. The total reserves of several prospects will usually allow more infrastructure costs. Then apply the infrastructure costs to find the group cutoff and evaluate the EC of the total, as if it was one large prospect.
