The document evaluates the economic viability of a proposed oil well in the Pekisko Formation. It estimates the oil initially in place and recoverable oil based on reservoir analysis. It also estimates the capital costs, operating costs, and royalties. An economic evaluation using the PEEP program calculates metrics like net present value, discount rate of return, payout period, and profitability index under different discount rates. The analysis shows positive economic results, and it is recommended to commence the proposed well project.

1. Oil Well Evaluation
using PEEP
WONJAE JANG, SANG HYUN KIM, AND SYLVAIN GACKOSSO MBONGO
DECEMBER 04, 2013

2. Summary
Evaluating the economic viability of the proposed oil well
Geology &
Reserves
Costs Estimate
Economic
Evaluation
Conclusion &
Recommendation
• Pekisko Formation
• OOIP = 5.8 x 106 Sm3
• PRF = 9%
• ROIP = 0.5 x 106 Sm3
• Royalties
• Capital Costs
• Operating Costs
• Using PEEP Program
• DCF-ROR
• NPV/Payout Period/
P/I Ratio/EV - Undisc. & Disc.
Discount Rate (%) NPV ($1,000) DCF-ROR (%)
Payout Period
(months)
P/I Ratio EV ($1,000)
Undiscounted 10,476
99.7 22.72
5.48 7,640
5 7,763 4.13 5,611
10 5,952 3.22 4,257
15 4,687 2.56 3,313
After Income Tax, 75% Probability of Success. All currency values are in Canadian dollars.
• The profitability indicators shown above proves that the proposed well is economically viable
• We highly recommend commencement of this project