You are an exploration team in charge of a new petroleum province.

Multidisciplinary challenge: Enhance your overall understanding of petroleum exploration and field development.

Create a Return on Investment

You start with $200 million Create value

Net value of the oil and gas discovered MINUS all costs involved

Credibility points awardedSensible decisions and correct answersCPs are a measure of ability and credibilityConsidered when bidding for blocksUsed when applying for funds

Where and how to find hydrocarbons Corporate Social Responsibility Licensing rounds Farm-in and Partnerships –

negotiations Drilling rigs Sub-contractors Environmental issues Economically viable volumes Team work, Critical decision making

Oil

Gas

www.oilsim.com

www.oilsim.com

Columns e.g C1 to C112

Row

s e

.g. R

1 t

o R

14

4

Block

Blocks are divided into 64 smaller cellse g. R52C110

Challenge: Find three sedimentary basins

Procedure: Buy and study magnetic and gravimetric

surveys Submit the coordinates for each centre Column and row number for each basin

centre

Gravimetric surveys indicate changes in the gravitational pull of the Earth in different areas of the sub-surface.

Lower gravitational fields indicates likelihood of low density rocks –Sedimentary rocks, porous and hopefully containing hydrocarbons

Survey shop

Gravimetric survey of North-west area

Magnetic surveys show anomalies in in the expected magnetic field of the Earth in particular areas.

Sedimentary rocks in the basins have a lower concentration of magnetic materials and lower magnetic field than the surrounding crystalline rocks.

Magnetic survey:North-west quadrant

All four quadrant surveys in map context

Locate edges of the continous basin structure

Locate the diagonals and thus basin centre

Example:Top basin on

both maps Calculate the

midpoint between the gravimetric and magnetic centres found

= C55 and R105

C50

R100

C60

R110

3 centres – one Centre midpoint for each basin

Example: C55, R105 Solve before deadline. All

submissions are evaluated after the deadline (and not before).

You may get 0-100 CPs. All three centres must be located to get full knowledge points.

Message in Inbox:

Shows results Answers

submitted CPs awarded

The government has decided to put the blocks in one of the basins on offer.

Challenge Determine 3 best blocks

to bid for Initiate Corporate Social

Responsibility projects Commit to Exploration

drilling programme

Licensing area

Any restrictions involved? - Spawning grounds

What are we looking for? - Prospects Where do we find prospects?

In basins, where hydrocarbons have been 1) are produced and 2) trapped

How do I find them? - Geoscientific analysis Common Risk Segment maps, 2D seismic

1. SOURCE ROCKwhere organic material is put under sufficient pressure

2. MIGRATION ROCKwhere hydrocarbons are driven through

3. CAP ROCKImpermeable rock that stops migration of hydrocarbons 4.

PROSPECT

(c) OLFAnticline trap

Fault trap

Stratigraphic trap

Salt dome trap

Geological “pockets”, that might contain hydrocarbons.

Red areasYou will not be awarded blocks that contain any red spots (spawning grounds)Blue areasBlocks in area may be awarded

Layer 3 Eocene1500m below the seabed

Layer 2 Paleocene2500m below the seabed

Layer 1 Cretaceous3500m below the seabed

CRS. Common Risk Segment surveys tell you about the probability of a structure in the block/cell containing oil or gas

Surface

Traps can be found with seismic surveys and sound waves bouncing off structures

2D seismic survey is a vertical cross section of the geological layers along either a column or a row

                                                                                                                                  

                                     

Unprocessed Processed

Interpreted Red is top of the sealing rock

Green is top of the reservoir rock

What type of data do you want?

Columns or Rows Unprocessed or processed

data Interpreted or not

Only buy maximum of 1 block of data at a time to speed up processing

It takes time to process your request Created to order Moves to surveys once processed

Red circles – navigate through the 2D seismic

Yellow square – Row 1 from Column 1-56

Leakage?

Leakage?

Column

Row

Prospect, ReservoirBasin,Source

Corporate Social Responsibility Affects a company’s reputation and their

credibility Increase Credibility by initiating CSR

projects CSR points considered when bidding for a

block Commit to work programme, as part of

licensing programme State how many exploration wells you

promise to drill. Bids are evaluated based on work

programme and team credibility

CSR summary

Sport sponsorship Geoscience Institute Bribery Orphanage Business development Wind mill University exchange

programme Safety training center Fact finding mission Procurement training

Park Environmental

assessment Primary school

computers Wave energy plant Advertisements Social welfare study TV documentary Airline frequency Business simulation Support singer

• Max Round spend: $30M on CSR projects

• Each project:Financial cost and CPs

• Projects in grey: not enough cash

or CPs to do• Outcome:

Positive/negative CPs earnt on completion

Teams can increase their competitive position by initiating CSR projects

Completed projects

Credibility Point page

Choose 3 blocks with good prospects Commit to a number of exploration wells Bids evaluated using the following

formula:Each well is worth 100 Credibility PointsBidding points = CP + 100 * No. of wells

committed If 2 teams choose the same block and

same no. Of wells – the team with the highest CPs will be awarded the block

Government awards one block per team

Select number of exploration wells that are to be drilled

1-4 wells Team’s first choice block =

block with most committed wells

Penalties: Bid disregarded if overcommit

no of exploration wells Minus 10 credibility points for

each bid where the number of committed wells is higher than the number of prospects

Leakage?

Environmentally sensitive areas – blocks to avoid

Common Risk Segment surveys – areas of higher probability of prospects

2D seismic – blocks with most structures

Final tip - Check water depth - shallow water blocks

Message sent to all Results and CPs

One license per team

The headquarters of your company has evaluated the license that you were awarded.

Although the possibility of finding oil is fair, the costs involved are large. Thus the headquarters want you to spread the risk.

Challenge: You shall farm-out minimum 20% from your license – and farm-in as much as you can in other good licenses.

Acquire 3D Seismic interpretations for the block you operate, and study the results from the licensing round

Farm-out: Get others to invest 20% or more in your license – you can send them surveys

Farm-in: Send offers to other teams to buy shares in their viable licenses. Submit an offer for each viable license, with amount offered and share wanted in whole %.

Shows the subsurface structure in a cube.

Layer 1 Cretaceous

Layer 2 Paleocene

Layer 3 Eocene

Prospects are no guarantee of oil or gas

Spread the risk: e.g Investing in other blocks divides the risks amongst all partners, much more preferable than keeping 100% of one field and all the risk.

Increase probability of profit: investment in only 1 field which could be a dry prospect is possible, whereas the likelihood of investing in 5 fields which are all dry is unlikely.

Either accept the amount or % the license owner requests, or amend the amounts to your own offerAdd a message to the sellerPress “Send offer”Minimum of $100000 per %

When a team receives a Farm-In offer to appears under Financing. This is where a team can receive finance or money for a % of their own blocks

license OWNER decides whether to ACCEPT or REJECT the offer

Partnerships established every time a license owner accepts an offer.

Overview: On the main page, you can see all licenses. 1) licenses you operate, 2) licenses you have invested in, and other

licenses.

All your farm-in offers to other teams are shown under “Investing” on the right-hand side of the homepage . This is where a team offers investments to other teams for a % of their blocks

Partners pay a proportional share of all future costs

Partners receive a proportional share of the net proceeds from oil and gas

The operator team makes all decisions regarding drilling

Teams can farm-out up to 70% of licence

Operators must keep 30% of licence

•Before choosing a rig, you need to check your water depth Find this at the bottom of the BLOCK page

Choose the right rigs for your water depths Jack-up rigs for shallow waters

Semi-submersible rigs for middle waters

Drillships for the deepest waters

Rig cost = drilling days * day rate

Few: limited number of rigs available.

If you get one: start using it within 20 minutes.

If you don’t: wait in a queue, if another team is using the rig.

Price can change: rig day rates are dynamic.

Upto 9 Star quality-

Good: normally costs more

Bad: cheaper, but reliability

is low, so you risk extra drilling time and extra costs

EIA: enviromental impact analysis shows where not to drill.

Place your mouse where to drill

Certain problems can occur if Service Provider Selection is poor quality

Other penalties can occur if you drill in areas indicated as problematic in the Environmental Impact Assessment

As in real life, problems can occur randomly and these are also applied with fines levied accordingly.

Layer 1 Cretaceous

Layer 2 Paleocene

Layer 3 Eocene

Earn extra CPs by calculating the estimated drilling cost

Oil Spill control/Gas Blow out

Proven volume (MBOE) counts Test may increase proven volume Remember to tick the boxes!

Only if you discover a field – find Oil or Gas

You decide whether you want more information about that field

More information by doing a production test (and other tests)

Tests costs: Tests take 10 days per field. Tests have the same day-rate as the drilling if you use the same providers.

25% of 8 MBOE @ $50

12% $39.9M

Expected costs ifyou developed thefield (capex) andproducedthe oil (opex)

If total expenses arehigher than the salesvalue, the value of thelicense is zero

From Probable volume to proven reserves

Exploration well: 0 to 1572 MBOE (after drilling) 11 to 1266 MBOE (after testing)

First appraisal well: 25 to 1033 MBOE (after drilling) 34 to 910 MBOE (after testing)

Second appraisal well: 65 to 850 MBOE (after drilling) 101 to 752 MBOE (after testing)

Only proven MBOE counts

Cash : Initial $200million investment

Funds from partnerships

Funds from the bank

Value:Valuation of licences (operators and partners) based on oil and gas found less expected costs if these licences were to be developed

Click on Apply for More Funds Tab. 1 CP for each $100,000 applied for. Answer the questions: All correct gives

cash and you can keep CPs. One wrong gives cash and you keep ½ of your CPs. Two wrong gives ½ cash and you lose all CPs. All wrong, you get no cash and lose all CPs.

Expensive money if less than 10 credibility points: Apply for cash and be fined $5million for each $20million requested.

Narrow uncertainty: Drill appraisal wells to get proven volumes

Drill into other prospects to find more proven volumes.

Farm-in and -out: Get into other good blocks.

Two additional licensing rounds: Repeat the processes.

Money: Apply for more money, if you run out of cash.