Directive 065: Resources Applications for Oil and Gas Reservoirs ...
Directive 065: Resources Applications for Oil and Gas Reservoirs ...
Directive 065: Resources Applications for Oil and Gas Reservoirs ...
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Requirements<br />
b) a statement of the proposed delivery<br />
point, together with a discussion of the<br />
reasons why you propose the location,<br />
c) analyses of the economics of the<br />
proposed delivery point <strong>and</strong> alternate<br />
delivery points, <strong>and</strong><br />
Comments<br />
For each case, the economic analysis should<br />
include a detailed itemization of all costs<br />
(excluding sunk costs), <strong>for</strong>ecasts of production<br />
<strong>and</strong> revenue streams, <strong>and</strong> tabulations of<br />
be<strong>for</strong>e-tax rate of return, payback, <strong>and</strong> present<br />
value analyses.<br />
d) a discussion of the development <strong>and</strong><br />
probable future development in the area.<br />
13) If you are requesting, pursuant to Section<br />
51(4)(b) of the OGCA, that the ERCB, to<br />
give effect to the common purchaser<br />
declaration, direct the proportion of the<br />
common purchaser’s acquisitions of gas from<br />
the pool that it shall purchase from each<br />
producer or owner offering gas <strong>for</strong> sale,<br />
a) a discussion <strong>and</strong> documentation<br />
indicating what negotiations were carried<br />
out in regard to distributing production<br />
among wells in the pool <strong>and</strong> where the<br />
impasse lies, <strong>and</strong><br />
b) a discussion of your proposal as to how<br />
the ERCB should distribute production<br />
from the pool, including a tabulation of<br />
the percentage of total production that<br />
each well or group of wells should be<br />
allowed to produce, together with details<br />
of how the proposed scheme was<br />
obtained.<br />
The ERCB’s usual practice is to allocate<br />
production among wells in a pool on a<br />
percentage basis, rather than setting any<br />
specific rate or volume. The proportion of<br />
production allocated to each well is commonly<br />
based on the following <strong>for</strong>mula:<br />
Percentage of pool production <strong>for</strong> specific well<br />
= 100 x (wellbore net pay x porosity x gas<br />
saturation x area of spacing unit or validated<br />
area <strong>for</strong> specific well)/(sum of wellbore net pay<br />
x porosity x gas saturation x area of spacing<br />
units or validated areas <strong>for</strong> all wells).<br />
<strong>Directive</strong> 032 <strong>and</strong> Decision 91-8 offer<br />
discussions of the ERCB’s commonly used<br />
allocation <strong>for</strong>mula <strong>and</strong> the validated area<br />
concept. The ERCB has not commonly used<br />
mapping as a means to determine hydrocarbon<br />
pore volume in a spacing unit because in many<br />
cases such mapping is interpretive. The ERCB<br />
has not normally factored the deliverability of<br />
a well into an allocation <strong>for</strong>mula to avoid<br />
disputes on what constitutes appropriate testing<br />
of wells. You may propose an allocation<br />
<strong>for</strong>mula other than the commonly used one;<br />
however, you should include detailed<br />
justification as to why the ERCB should<br />
deviate from its usual practice in determining<br />
an allocation <strong>for</strong>mula.<br />
In some cases it may be useful to set minimum<br />
rates, with a percentage allocation above the<br />
minimum rate. If a well falls below the<br />
minimum rate, other wells are restricted only<br />
to their minimum rates <strong>and</strong> not below.<br />
ERCB <strong>Directive</strong> <strong>065</strong>: <strong>Resources</strong> <strong>Applications</strong> / Common Purchaser (October 2011) • 1-11