Question: 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

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
Get step-by-step solutions from verified subject matter experts
