Appraisal techniques

This section will consider the role of appraisal in the field life cycle, the main sources uncertainty in the description of the reservoir, and the appraisal techniques used to reduce this uncertainty. The value of the appraisal activity will be compared with its cost to determine whether such activity is justified. 

Reul, R. I., Which Investment Appraisal Technique Should You Use, Chemical Engineering, April 22, 1968, pp. 212-218. 

In order to make the best possible use of valuable financial and other resources, and to minimise the uncertainty involved in making irreversible decisions, appraisal techniques are vitally important. These can be technical, legal, regulatory, commercial or financial in nature, for instance market forecasting and patent protection. Critical path analysis is... 

Appraisal techniques help to balance the elements of technical push and market pull . Despite some of the Jargon used, many of these concepts are quite simple and so these techniques were probably first estabhshed in radimentary forms when the first commercial activities began. 

Financial appraisal techniques are a vitally important aspect of commercial biotechnology, but it is often very difficult to gather authentic data to illustrate the... 

The net present value (NPV) is one of the key terms in the appraisal technique - it refers to the difference between the present values of all costs and that of all revenues ... 

During the operations phase, new hazards are identified by periodic inspections, worksite monitoring, audits, and appraisals. Techniques used to identify hazards during the operations phase include checklists, PET analysis, and safety studies. Accident analysis is also an important method of detecting previously undetected or uncorrected hazards. Accident analysis tools include change analysis, PET analysis, MORT and mini-MORT analysis, and event and causal factors charts. 

Critical Incident Method A performance appraisal technique for either a system or employee. For a system the process of gathering data by asking the users of that system to describe significant incidents, according to some established criteria. For an employee the maintenance of a log documenting both favorable... 

We then consider briefly the alternatives to the cost benefit appraisal technique before moving on to consider how project evaluation techniques can be adapted to deal with the increasingly common situation in which the private sector is expected to assume some risk and to contribute to the financing of the project. 

It is not intended to re-enter the debate on the merits or otherwise of the CrossRail scheme here, but to point up the importance of modifying the conventional appraisal techniques to take into account the mix of interests involved in PFI-style projects. The value of the approach lies in enabling the various parties to make clear their assumptions and, in particular, the effect of adopting the different perspectives of the private and public sectors. 

The range of uncertainty in the UR may be too large to commit to a particular development plan, and field appraisal may be required to reduce the uncertainty and allow a more suitable development plan to be formed. Unless the range of uncertainty is quantified using statistical techniques and representations, the need for appraisal cannot be determined. Statistical methods are used to express ranges of values of STOMP, GIIP, UR, and reserves. 

It is worth noting that if field development using horizontal wells is under consideration, then horizontal appraisal wells will help to gather representative data and determine the benefits of this technique, which is further discussed in Section 9.3. 

The prediction of the size and permeability of the aquifer is usually difficult, since there is typically little data collected in the water column exploration and appraisal wells are usually targeted at locating oil. Hence the prediction of aquifer response often remains a major uncertainty during reservoir development planning. In order to see the reaction of an aquifer, it is necessary to produce from the oil column, and measure the response in terms of reservoir pressure and fluid contact movement use is made of the material balance technique to determine the contribution to pressure support made by the aquifer. Typically 5% of the STOMP must be produced to measure the response this may take a number of years. 

Analytical models using classical reservoir engineering techniques such as material balance, aquifer modelling and displacement calculations can be used in combination with field and laboratory data to estimate recovery factors for specific situations. These methods are most applicable when there is limited data, time and resources, and would be sufficient for most exploration and early appraisal decisions. However, when the development planning stage is reached, it is becoming common practice to build a reservoir simulation model, which allows more sensitivities to be considered in a shorter time frame. The typical sorts of questions addressed by reservoir simulations are listed in Section 8.5. 

There will be some uncertainty as to the well initials, since the exploration and appraisal wells may not have been completed optimally, and their locations may not be representative of the whole of the field. A range of well initials should therefore be used to generate a range of number of wells required. The individual well performance will depend upon the fluid flow near the wellbore, the type of well (vertical, deviated or horizontal), the completion type and any artificial lift techniques used. These factors will be considered in this section. 

Petroleum economics provides the tools with which to quantify and assess the financial risks involved in field exploration, appraisal and development, and allows a consistent approach with which alternative investments can be compared. The techniques are applied to advise management on the attractiveness of such investment opportunities, to assist in selecting the best options, and to determine how to maximise the value of existing assets. 

Each observation in any branch of scientific investigation is inaccurate to some degree. Often the accurate value for the concentration of some particular constituent in the analyte cannot be determined. However, it is reasonable to assume the accurate value exists, and it is important to estimate the limits between which this value lies. It must be understood that the statistical approach is concerned with the appraisal of experimental design and data. Statistical techniques can neither detect nor evaluate constant errors (bias) the detection and elimination of inaccuracy are analytical problems. Nevertheless, statistical techniques can assist considerably in determining whether or not inaccuracies exist and in indicating when procedural modifications have reduced them. 

Expenditure on corrosion prevention is an investment and appropriate accountancy techniques should be used to assess the true cost of any scheme. The main methods used to appraise investment projects are payback, annual rate of return and discounted cash flow (DCF). The last mentioned is the most appropriate technique since it is based on the principle that money has a time value. This means that a given sum of money available now is worth more than an equivalent sum at some future data, the difference in value depending on the rate of interest earned (discount rate) and the time interval. A full description of DCF is beyond the scope of this section, but this method of accounting can make a periodic maintenance scheme more attractive than if the time value of money were not considered. The concept is illustrated in general terms by considering a sum of money P invested at an... 

The EDA technique cannot be explained in more detail because each situation needs to be individually appraised. Even experienced explorers now and then jump to apparently novel conclusions, only to discover that they are the victims of some trivial or spurious correlation. 

Fulton JE Jr (1987) Modern dermabrasion techniques a personal appraisal. J Dermatol Surg Oncol 13 780-789... 

Classical methods for the investigation of complex formation equilibria in solution (UV/Vis spectrometry, thermochemical and electrochemical techniques) are still in use (for an appraisal of these and other methods see, e.g., ref. 22). Examples for the determination of the ratio of metal to ligand in an Hg-protein complex by UV spectrometry are given in ref. 23, for the study of distributions of complex species of Cd in equilibria by combined UV spectrometry and potentio-metry in ref. 24 and by potentiometry alone in ref. 25, and for the combination of calorimetry and potentiometry to obtain thermodynamic data in ref. 26. 

Intubation techniques have been used extensively to appraise the absorption rate in the stomach, duodenum, jejunum, ileum, and colon (23). These methods can be adapted to provide direct evaluation of the dissolution rate in different segments of the GI tract. 

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