MSc Petroleum Geoscience

Year of entry: 2025

Course unit details:
Prospect Evaluation and Petroleum Economics

Course unit fact file
Unit code EART60162
Credit rating 15
Unit level FHEQ level 7 – master's degree or fourth year of an integrated master's degree
Teaching period(s) Semester 2
Available as a free choice unit? Yes

Overview

This course is designed to provide the skills required to identify and assess subsurface resources, developing hydrocarbon play types and petroleum systems, assessing storage for carbon capture, or modelling subsurface geothermal resources.  We assess what data is required and how to undertake an evaluation of leads and prospects, evaluate risk and uncertainty, and review the processes that aid decision making in companies.  The course will teach how to rank prospects, calculate reserves (deterministic and Monte Carlo). The second part of the course builds skills in estimating the economic worth of the project, covering CAPEX, OPEX, NPV and also decision making. 

Aims

The unit will be delivered using asynchronous, pre-recorded lectures in preparation for weekly synchronous activities. Synchronous activities will include practice exercises, demonstrations, quizzes and Q&A.   

Learning outcomes

On the successful completion of the course, students will be able to:
ILO 1Defining a petroleum system, reservoir, source, migration
ILO 2Understand the methodologies for description and analysis – mapping, correlation; including analysis of a play fairway  
ILO 3Calculate resource and risk estimates for a subsurface structure using deterministic and probabilistic approaches
ILO 4Assess subsurface risk and uncertainty and understand the management of risk. Be aware of resource, rate, profile, development selection and operational focus
ILO 5Apply economic workflows and methodologies for financial decision making in the energy industry  
ILO 6Prepare a financial model for cash flow and estimate rates of return on a development project
ILO 7Calculate project economics and assess environmental impact and social responsibility issues

Syllabus

Lectures and Practicals:

Session 1: Licences and Workflows. Building understanding of business models.  Drivers to decision making  

Session 2: Basin Style and Petroleum Systems: Assessing basin types and influence on the petroleum system

Session 3: Monte Carlo Resource Analysis: Practical exercises using the REP software to calculate Probabilistic resources

Session 4: Play and GDE Mapping: Building Play and GDE maps, integrating data.

Session 5: Risk and Uncertainty: Bias and Uncertainty in geological data and interpretations

Session 6: Risk and Uncertainty: Assessing risk of play and prospects

Session 7: CRS Mapping: Mapping risk to define sweet spots of lowest risk to drill

Session 8: Introduction to Petroleum Economics: Key terms and definitions, Calculating CAPEX, OPEX, the role of inflation and discounting

Session 9: Project economics: Contract Types, Implications, Oil Price, Rate of return, Money of the Day and Real Terms Money

Session 10: Project economics: Environmental impact, social responsibility, life cycle analysis, impact of costs and oil price,  

Session 11: Project economics: Decision Tree analysis 

Teaching and learning methods

This module will be delivered as 11 sessions with up to 3 hours asynchronous lecture / practical material and pre-read material, prior to weekly 3 hour synchronous teaching, lecture and practicals, focused on problem solving and data analysis, supplemented by workstation practicals, self-study (background reading, quizzes, revision) 

Assessment methods

Method Weight
Other 40%
Written assignment (inc essay) 30%
Report 30%

Feedback methods

Assessment type

% Weighting within unit

Hand out and hand in dates

Length

 

How, when and what feedback is provided

ILO tested

Basin Review40%tbctbcDiscussion of solution in class and posted on BlackboardAll
Monte Carlo Resource Analysis30%tbctbcDiscussion of solution in class and posted on BlackboardAll
Economics examination30%End of Semester 21.5 hoursMarked scriptsAll

Recommended reading

Papers will be provided online each week for further reading.  In addition, the following textbooks are recommended:

 

Petroleum Economics and Risk Analysis: A Practical Guide to E&P Investment Decision-Making, 1st Edition, Volume 71 - January 29, 2021 Elsevier; Author: Mark Cook

Paperback ISBN: 9780128211908.  eBook ISBN: 9780128232064 

Study hours

Scheduled activity hours
Lectures 11
Practical classes & workshops 22
Tutorials 33
Independent study hours
Independent study 84

Teaching staff

Staff member Role
Jonathan Redfern Unit coordinator

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