Equity Determinations

Netherland, Sewell & Associates, Inc. (NSAI) has conducted reserves certifications, technical studies, economic evaluations, and advisory work for both onshore and offshore fields throughout the world. We use an integrated technical evaluation approach encompassing reservoir engineering, geological, geophysical, petrophysical, and operational engineering disciplines. The unmatched resources, experience, and reputation of NSAI make us uniquely qualified to resolve equity disputes. Equity work typically consists of an entirely independent evaluation of original oil- and gas-in-place and recoverable reserves from within and across lease boundaries to determine equity ownership of current and produced volumes. Our preliminary reports, rebuttal documents, and final reports typically consist of extensive text and exhibits describing our methodologies, technical procedures, interpretations, and resolutions.

Our clients expect quality and integrity. We demand it.

NSAI has significant equity redetermination experience throughout the world. We have also provided equity-related advisory services to multiple clients, including assisting a consortium of companies in drafting unitization laws and equity determination procedures for consideration by the government of Bolivia. More recently, we have advised our United States-based clients during the early stages of an equity determination on the large Zama Discovery in the Bay of Campeche, offshore Mexico. In the Browse Basin, offshore Australia, we reviewed field data and reservoir models and assisted our client in drafting equity determination procedures on the basis of volumetric estimation of ultimate recovery.

We pride ourselves on the both the experience of our staff and their longevity with the firm. Most of the key senior staff involved with each of the equity/unitization projects listed below are still with NSAI and available to assist future clients. To talk to one of our experts regarding an Equity Determination, call either Scott Frost or Phil Hodgson in our Dallas office at 214-969-5401. We can also be contacted by email at info@nsai-petro.com for more information.

Listed below are a few projects to illustrate our experience:

• Reviewed the unit operating agreement (UOA) and equity determination procedures for Jubilee Field, offshore Ghana. We advised our client by identifying the omissions, ambiguities, and possible alternative interpretations in the equity procedure documents. We further advised our client on possible pitfalls in its preparation of its equity case and its defense documents in the event disagreed items were submitted for third-party expert resolution.
• Performed third-party expert resolution of referred matters of disagreement for the second equity redetermination of Snorre Field on behalf of a consortium of 8 companies. Snorre Field is located offshore Norway on the western margin of the North Viking Graben and produces undersaturated oil from Upper Triassic to Lower Jurassic aged fluvial sandstones. The field is a complex of tilted fault blocks truncated angularly below the Base Cretaceous Unconformity. Our analysis included a completely independent seismic interpretation, multiple models and sensitivities to depth conversion, stratigraphic interpretation, construction of an independent 3-D reservoir model, and multiple, independent adjustments/refinements of the reservoir simulation models.
• Performed third-party resolution of the second equity redetermination for Markham Field, North Sea, on behalf of a consortium of 10 companies, the Kingdom of the Netherlands, and the United Kingdom of Great Britain and Northern Ireland. Matters referred for expert resolution included fault interpretations, seismic time-to-depth conversions, reservoir mapping, formation evaluation, deviated well corrections, and resolving distributions of oil-water contacts. Our analysis included seismic interpretation, seismic ray tracing and structural analysis, depth conversion, stratigraphic modeling, and reservoir mapping. Assessed the regional and field level stratigraphy, depositional and tectonic history, and petrophysical characteristics of the Rotliegendes and Silverpit Formations.
• Performed equity finalization studies for the Department of Energy and Chevron U.S.A. Production Company on all zones (4 separate equity determinations) in the Naval Petroleum Reserve No. 1 (Elk Hills Field), Kern County, California. Elk Hills Field comprises over 3,000 wells in 4 major intervals that include 64 producing horizons. Depositional environments range from distal and proximal turbidites to fluvial deltaic clastic reservoirs. The database of well logs and production history ranged in age from early 1900s to recent time. The analysis included independent interpretation of structure, stratigraphy, and petrophysics. Reservoir drainage models included reservoir simulation and production history matching.
• Served as third-party expert for equity resolution of the Maui Field recoverable gas reserves located offshore New Zealand. This work was conducted on behalf of the gas seller and gas buyer consortiums. Analysis included alternative interpretations to the shallow marine Eocene-aged reservoir layers, 3-D seismic interpretation of faults and horizons, multi-layer seismic ray tracing and depth conversions, petrophysical modeling, probabilistic reservoir property modeling, investigation of capital costs associated with drilling and completion opportunities, and generating an economic model incorporating estimates of recovery efficiency, product flowstreams, project timing, capital and operating costs, product pricing, and contract terms.