Q1: Identify the most effective stratergy of a reservoir managerment

Q2: What are the cash flow assumtion with respect to the following

a. Periodic discounting and year end cash flows

b. Periodic discounting and mid year cash flows
c. Continuous discounting and periodic cash flows
d. Countinuous discounting and countinuous cash flows

Q3: The time value of money is due to:

I. Inflation
II. Interest rate
III. Opportunity cost
IV. Risk

Please select below:

a. All of the above

b. None of the above
c. II and IV
d. I and III

Q4: the following time diagrams showsL

200 200 200 200 200

200

0 1 2 3 4 5 6

a. The ordinary annuity

b. Annuity due
c. Deferred annuity
d. None of the above

Q5: Assuming an interest rate of 8% per year, the present value of the annuity in Q4 is

a. $925
b. $999
c. $825
d. $888
(1+ 8 % )6 −1
Pv =200∗
[ ]
8 %∗( 1+8 % )6
=924.57
Q6: Assuming an interest rate of 8% per year the future value of the annuity in Q4 is

a. $ 925
b. $999
c. $1467
d. $1585
( 1+ 8 % )6 −1
F v =200∗ [ 8% ] =1467.185

Q7: What will be the gross annual oil revenue based on 10MBOD at the price of $60/Barrel

a. 200MM$
b. 219MM$
c. 229MM$
d. 239MM$
Gross value=Q (bbl /day)∗365∗price=10∗10 3∗365∗60=219∗106 (USA )
Q8: What will be the annuity fixed operating cost if the total facilities CAPEX of a project is 2506 MM$
and the fixed cost is 4% of the CAPEX.

a. 110.24 MM$
b. 100.24 MM$
c. 105.25 MM$
d. 95.25 MM$
4 %∗2506=100.24
Q9: Suppose $35,000 is borrowed from a bank at an interest rat of 9% per year in exchange for a
promise the loan will be paid off through a series of five equal year-end installment. Calculate the yearly
installment if the first payment is due 1 year from the day money is borrowed.

9 %∗( 1+ 9 % )5
 AV =35000∗ [
( 1+9 % )5−1 ]
=8998.235

Q10: An Oil producer plan to replacce certain equipment at a cost of $150,000 five year from today, if
the interest rate is 9%, how much money must the OIL PRODUCER put asside per year in order to
generate $150,000
 9%
A v =150000∗
[ ( 1+9 % )5−1 ]
=25063.86854

Q11: Suppose an Oil well produces 2,500 BBL/year in the first year of production. The production
declines by 300BBL /year for each following five year. If the market rate of interest is 9%. Calculate the
equivalent uniform annual production rate. If the oil price is $60/bbl, Calculate the present value of the
production.

Annual production rate:

1 6 barrel
A v =2500−300∗
( −
)
9 % ( 1+ 9 % ) −1
6
=1825.0623
year

Av (money)= 1825.0623*60=109503.738

Present value

( 1+ 9 % )6 −1
Pv=109503.74∗
[
9 % ( 1+9 % )6 ]
=491224.854 usd

Q12: An oil well has been drilled and completed. The productive interval has been encountered at a
depth of 7,815 – 7,830 feet. The log analysis showed an average porosity of 17% and an average water
saturation of 25%. The oil formation volume factor is determine in the lab to be 1.215/RB/Dtb.
Experience shows other reservoir of about the same properties drain 80 arcers with a recovery factor of
12%. Compute the OOIP and the ultimate oil recovery.

7758 ( 7830−7815 )∗80∗0.17∗( 1−0.25 )

¿ =976933.3
1.215
Nvl= N*RF = 976933.3∗0.12=117232 stb
Q13: Calculatet the economic limit for the following data:

Po=$60/STB, Pg = $4.5/MScf, Tg= 5%, To = 7.5%

LOE= $6,000/mouth , T= 12%, NRI= 85.5%, GOR= 600scf/stb

100 %∗6000
¿ =222.347 stb/month
85.5 %∗( 60∗( 1−0.075 ) + 4.5 ( 1−0.05 ) )∗600/1000

Q14: It is estimate that a taxpayer has remaining reserves (net to his interest) at the end of his tax year
of 50,000 oil barrels. His production share in the year was 6,000 BBL sold at $30/BBL. His net taxable
income before depletion from the property was $70,000 and the taxpayer’s total taxable income was
$450,000, Compute the appropriate depletion charge for the year. The adjustable bases of the
capitalized leasehold cost are $45,000

The percentage depletion is 15% of the gross income from the qualifying production from oil and gas
property.

Percentage depletion = 0.15(6000*30)= 27000

50% net income limitation = 35000

65% taxable income limitation = 0.65* 450000 = 292500