The 40 million barrels is a 2P value [Proven + Probable] called a P50 value. There is a 50% chance that 40 million barrel oil will be recoverable given a range of assumptions including intepreted rock volumes, porosity, permeability and extraction methodology. All the variables are processed through a Monte Carlo simulation and out pops the P10, P50 and P90 values.
An important value is the P10 or Proven value in this case 10 million barrels.
A proviso is that all these values are based on the extraction route which according to the Macquarie report involves drilling 6 wells into the NE field.
There are some issues in the initial operation of the field in particular P8 which picked up water on Day 1 of production. You may recall this was a difficult well to complete in the horizontal section.
AED hve done an excellent job in completing a complex offshore field development and you cannot blame management for the way the reservoir performs in production.
The impact of these issues in field operation to date on the P50 estimations are not available.
I do have a serious criticism of AED. I could not understand why P10 was drilled in the SE as a single production well in thin sands. It made much more commercial sense to drill a third production well in NE to protect the revenue stream which at even 20,000bopd was worth $700 million per year.
Such revenue would financially derisk the whole project.
Greed is a bad master.
AED Price at posting:
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