Oil & Gas Economics: Decline Curves, Netbacks & Well NPV

What you'll build

What you will be able to do

Each lab ends with a concrete result that you build yourself and the checker confirms, cell by cell.

• Convert one month of oil, gas and NGL volumes for six wells into barrels of oil equivalent, daily rates and the liquids share.
• Forecast 24 months of oil rate for a new horizontal well with Arps' exponential and hyperbolic equations and chart how differently they decline.
• Turn daily rates into monthly barrels, add them up, and estimate the well's ultimate recovery (EUR) to an economic limit.
• Build the netback per BOE for four wells with different product mixes, royalty rates and costs, and compare their margins.
• Build a monthly cash flow for one new well, discount it at 10 % a year month by month and find its NPV10.
• Test a grid of oil prices, find the first one at which the well earns its 10 % return, calculate the exact breakeven and compare it with the strip.
• Judge how efficiently Ridgeback Energy replaces the barrels it produces: finding & development cost, reserve life and recycle ratio over three years.
• Flex oil price, EUR, capex and opex by ±20 %, measure how much each moves the well's NPV10 and show it as a tornado chart.