2 Day Peep Class Slides - 2005

Introduction to Peep
Economics Analysis
Instructor: Ashley Orr
Housekeeping
Bathrooms
Lunch
Breaks
Break rooms
Fire Exits and Procedures
Computers
2004 Schlumberger Information Solutions. All rights reserved.
Introduction
Instructor Background
Business/Finance
Product Analyst in the Calgary Technology Center
Merak European Consulting Group
Peep, Decision Tool Kit (DTK), instruction and implementation
Participant Background
Name
Background
Peep Experience if any?
Personal Goals For Class
Help Options
Press
F1
Client Service Desk

1-866-829-0234 X1812 (X184 for FML)
Email
[email protected]
www.sis.slb.com/client_services
Course Objectives
Day 1
Introduction to the case document and functions
Day 2
Advanced Peep
Objectives Day 1
8:30am 4:00pm
Entering Case Data

Forecasting Cash Flow Based on the Economic Case
Using Scenarios
Preceding Case
Filters
Groups
Hierarchies
Searching for files
Exporting files
Course Objective
Learn Software Inputs

Successfully Complete and Understand Class Exercises
Learn to Apply Peep to your Job
What does Peep stand for?
Petroleum
Economic
Evaluation
Program
Peep Capabilities
Perform Production Forecasts
Project Economics
Perform Risk Analysis
Aid in:
Tactical (S-T)
Strategic Planning (L-T)
Budgeting and Accountability
Peep
Is an International Economic Evaluation, Decline Analysis and

Fiscal Modeling application
Aids in the analysis and calculation of the value of oil and gas
properties
Import Well Data
Forecast the Well Data
Link Well Data to an

Economic Case
Forecast Cash Flow

Based on the
Economic Case
Report on the Outcome
The Peep System

Model Document
Operating Expenses
Capital Definitions
Taxation
Royalties
Cost Recovery
Well Document
Production History
Production Forecasts
Test data
Decline Curves
Currency Document
Conversions
Inflation
Prices Document
Base Markers
Offsets
Reference Prices
Global Parameters
Document
Escalations
Discounting
Common Pricing
Case Document
Project Entries
Time Line
Interests
Reports
End result contains
data you specify,
including graphs
The Well Document
Both a container for historical production

and a vehicle for forecasting future
production and performing decline curve
analysis.
The Case Document
Case documents store entered project

data such as production forecasts,
operating costs and capital expenditures.
Side Tabs
(Depending on which
Peep tab you have open
these side tabs will change.)
Peep Tabs
(this is where the user can enter/modify
information)
Peep Select Window

(This is where you open/create a new case,
well, batch, schedule, consolidation
or any other type of Peep document)
Menu and Tools

(Depending on what you have open
these icons/buttons will be active)
Basic Data Entry For Economic Analysis

Case Creation &
Case Parameters
Production
Volumes
Prices
Interests
Custom:
Additional Rev and
Expenses
Operating
Expenses
Burden:
Ad Valorem &
Severance
Capital
Investments
Income or Federal
Taxes
Result:
Basic Cash Flow
Simplified Financial Calculation
=
=
=
Revenue (Volume * Price)

Operating Costs
Royalties
State Taxes
Operating Income
Capital
BTCF
Taxes Payable (Taxable Income DD&A)
ATCF
Important Dates in Peep

Evaluation Date
Escalation/ Inflation Date
Discount/Real Date
Economic Limit
Maximum Case Length
Basic Cash Flow

Value
Economic Limit
Positive
Cash Flow
(+)
Payout
Time
Negative
Cash Flow
(-)
Capital Investment
0
Evaluation Date
The economic evaluation begins on this date

The evaluation date is used as the default starting date for all
events and columns in your case
Escalation Date
This determines the point at which escalations begin
Discount Date
The discount date is the date to which cash flows are referenced. This
determines the relative time value of money
If cash flow events occur later than the discount date, they are discounted
back to this date.
If cash flow events occur earlier than the discount date, they are escalated
forward to this date.
Economic Limit
This is the date when the highest cumulative before tax cash flow is
reached.
It is a dynamic date dependent on case parameters.
You can override this by entering a large number for the minimum
number of months to evaluate or entering a date for the economic limit.
By default, Peep will only report for the period up to the economic limit.
Important Dates in Peep
Operation - Add
Forecasting Operations
Operation - Add
Adds the current segment to the previous segment.
Operation - Subtract
Subtracts the current segment from the previous segment.
Operation - Overwrite
Overwrites the previous segment with this new segment. For
example, when planning to stimulate a well, you would want to
overwrite the first segment with the new decline after the
stimulation.
Operation - Continuous
Sets the start date for the new segment at the end of the
previous segment. Use this option to enter a forecast for a well
that contains multiple potential producing zones. The first
decline segment is the first production zone; the second
segment is the second up-hole producing zone, and so on.
Operation Overwrite ALL

Overwrite all previous segments (entire production forecast)
with the new segment.
Initial Decline
Eff
Effective decline is the actual realized percent decline in one year and
is used when the historical rate of decline is known.
Nom
Nominal is the fractional rate at which producing capacity is falling and
is measured in units of 1/Time. It is the value used in equations and is
best used to manually confirm results.
Inst
Instantaneous is the tangential decline taken at an exact moment and
extended throughout the year.
Scenarios
Scenarios are used to model sensitivities eg: (high, base, low,
farmout, dry hole) for variables in your Peep case.
Example:
You want to compare the value of a case
under different variable scenarios (high/base/low/
/dryhole/farmout).
Scenarios and Risking

Scenarios can be added for:
Production (by product type)

Interests
Operating Costs
Custom Variables
Burden
Capital
Tax
Prices (done differently than the others)
Objectives Day 1
Entering Case Data
Using Scenarios
Preceding Case
Filters
Groups
Hierarchies
Searching for files
Exporting files
Well Development
@ E.L. of last well
Jan 2003
Objectives Day 1
Entering Case Data
Using Scenarios
Preceding Case
Filters
Groups
Hierarchies
Searching for files
Exporting files
Filtering and Grouping

Enable you to group cases or wells that share a
characteristic.
Being able to group and filter becomes critical when dealing
with a large number of wells or cases.

Four steps to setting up filters:
Setting up the User Parameters
Defining Dictionary Values
Defining the Filter
Defining the Groups

User parameters are extra data fields that are added to the
database. They are mainly used for filtering cases and wells
within the database.
Example:
Add a parameter called Engineer to classify
each Peep case according to the engineer
who created it.

Dictionaries are pre-populated values that are displayed in lists
as parameter options.
Example:
Create a dictionary list of all the fields in which
your company has production. This list then
populates the Field parameter.

Filters can be created to decrease the number of documents
that are viewed in a list.
Example:
You can create filters that show only those cases
or wells that are in a certain field.

Grouping is another way to organize the case or well lists in the
database. Grouping creates a hierarchy in your case or well list.
Example:
You can create a group folder showing cases
with State = Texas cases and ROR >= 12%.
Objectives Day 1
Entering Case Data
Using Scenarios
Preceding Case
Filters
Groups
Hierarchies
Searching for files
Exporting files
Hierarchies
Hierarchies are another way of organizing case and well
documents in the database. They can be based on the entire
database or from a filtered list.
Example:
You want to divide the Texas Properties group
to show each of the individual counties and the
major phase
Objectives Day 1
Entering Case Data
Using Scenarios
Preceding Case
Filters
Groups
Hierarchies
Searching for files
Exporting files
Searching for files

The Search window allows you to search your entire Peep
database and return a Results list containing only those
documents that meet the search criteria.
Example:
You want to search your database for all the
cases you created and create a dynamic group
for those cases.
Objectives Day 1
Entering Case Data
Using Scenarios
Preceding Case
Filters
Groups
Hierarchies
Searching for files
Exporting files
Objectives Day 2
8:30am 3:00pm
Review of Day 1
Importing Files
Scheduling
Consolidation
Batching
Rollup Reports
Objectives Day 2
Review of Day 1
Importing Files
Scheduling
Consolidation
Batching
Rollup Reports
Scheduler
Use the scheduler document to:
Reset the evaluation date on cases that have been
deferred to another budget.
Model a possible field development cycle (Dates).
Model a possible well-bore development (E.L).
Consolidate the risked results of the field
development cycle using consolidation factors
to model the probability of success.
Field Development
N
May, 2004
Jan, 2004
Jan, 2003
@ E.L. last well + 2 months
July, 2003 July, 2003
Objectives Day 2
Review of Day 2
Importing Files
Scheduling
Consolidation
Batching
Rollup Reports
Consolidations
Consolidations allow you to add cases toge

and report the total outcome.
There are three basic types of consolidatio

Aggregation
Consolidation (Recalculate Taxes)
Consolidate Data Entered in the Case
Consolidations
The consolidation document allows you to add cases together and treat the results
as a single case.
Three types of consolidation:
Aggregation: The cases are run individually to the end and then added together
to form the results.
Consolidation (recalculate taxes): The cases are run individually to the end of the
Before Tax tab. They are then added together. Depreciation is re-calculated and
then the whole Tax tab is calculated once with the summed values.
Consolidate Inputs: The cases inputs i.e. Production, Prices, Opcosts, Capital
and Custom columns are added together before running the consolidation. The
summed values are then run as a single case.
Consolidation Methods
Consolidation Methods
Aggregation
Production
Opcost
Capital
Custom
Burden
Tax
Reports
Production
Opcost
Capital
Custom
Burden
Tax
Reports
Consolidation
Ring Fence
Production
Opcost
Capital
Custom
Burden?
Tax?
Reports
Production
Opcost
Capital
Custom
Burden
Tax
Reports
Input Consolidation
Consolidations
Consolidations allow you to add cases together and treat the
results as a single case.
Use the consolidation document to:
Add many cases together to total results
Subtract one case from another (incrementals)
Add fractions of cases together for risked totals
Reset tax parameters and recalc depletion
Perform risk analysis on the sum of a group of cases
Recalculate book tax on the sum of a group of cases
Consolidations
Aggregation
Case 1 @ ATCF
Case 2 @ ATCF
+ Case n @ ATCF
Sum @ ATCF
Consolidations
Recalculate Taxes
Case 1 @ BTCF
Case 2 @ BTCF
+ Case n @ BTCF
Sum @ BTCF
+ New Depreciation
+ New Tax
Consolidations
Data Entered in the Case
Case 1
Prod
Price
Opcost
Capital
Case 2
Prod
Price
Opcost
Capital
Case 3
Prod
Price
Opcost
Capital
Total
Total
Prod
Total
Price
Total
Opcost
Total
Capital
Tax &
Depr
Beware of results after calculation or saving to a case as Pricing and Interest will change
based on volume and other factors.
Single
Case
Consolidations
Fields + Fields + Fields + Fields + Fi
Contracts + Contracts + Contracts

Country + Country + Country
Company Wide Report
Objectives Day 2
Review of Day 2
Importing Files
Scheduling
Consolidation
Batching
Rollup Reports
Batches
Batching cases is useful when you want to apply
changes to a group of cases.
Example:
If your price forecast changes and you have to
apply it to a group of cases, you run the cases
in a batch. The changes will be applied to all
the selected cases, and the cases will be
automatically re-calculated.
Batches
Batches can be used to:
Add consolidations, schedules and ring fences to your batch list

Apply sensitivities to batch calculations
Move/Shift Data (move evaluation date)
Add EOR factors
Change prices/markers
Add risk, purchase price and loan calculations to batch lists
Run several individual case reports at once
Batches
Peep can multiply each of the following
Variables by a factor:
Revenue (or Prices)

Operating Costs
Capital Expenditures
Production Volumes
These factors are used to create sensitivities that are applied

to cases with a sensitivity declaration.
Batches
Peep contains risk, purchase price and loan calculations
that can be added to any batch list evaluation.
Using batch lists to:
Change risk calculations to multiple cases at once.

Apply purchase price options to multiple cases.
Apply loan calculation options to multiple cases.
Use the Override with calc parms option to override the pre-existing
purchase price and risk calculations.
What is the difference between using the Batching

Function and the Consolidation function?
Batching allows you to make changes to individual cases and report
an outcome on each case. 1000 inputs yields 1000 outputs
Consolidating allows you to add the inputs of each case together
and sum the cases together. 1000 inputs yields 1 output
Script Files
Script files are used to make changes to cases and wells that
are not otherwise possible with existing PEEP functions.
Example:
You want to change Opcost Oil $/Bbl to
$3.00/Bbl for 1000 cases.
Script Files
Rules when writing script files:
Must be written in text format (Notepad) and saved with .CIP
extension.
Script starts with START CASE and ends with END CASE
Case sensitive
See pages 277-285

Objectives Day 2
Review of Day 2
Importing Files
Scheduling
Consolidation
Batching
Rollup Reports
Rollup Reports
A Rollup Report summarizes the results of multiple documents, which can
include cases, consolidations, and schedules, in a one line
document format. Rollup Reports can include parameters and
indicators from result sets.
Before you begin to create a Rollup Report you must first
define the following items:
User Parameters
Dictionaries
Result Sets
In addition, you will have to calculate all the documents in order to

save the result sets to the database.
Thank you for attending
Please take a few moments to fill out the evaluations
Interest Tab Explained
Interest Tab
WI
NRI
Note that application of WI also depends on ho

the variable is defined in the model AND in
the report
Applies to unrelated product opcost (Fixed, Overhead)

Applies to Oil Revenue and Oil Opcost ($/BBL or $/W/Mo)
Applies to Gas Revenue and Gas Opcost ($/mcf or $/W/Mo)
Applies to all byproduct related opcosts
Applies to all other income related opcosts.
Applies to Capital types with Capital Interest selected
(see Capital Detail Tab)
Applies to Capital types with Exploration Capital selected
(see Capital Detail Tab)
Applies to capital investments beginning with Facil
Applies to capital investments beginning with G&A
Applies to any items on the Burden tab.
An additional interest that could be paid or recd.

The NRI is taken out of Peeps profit
(NRI Revenue State Taxes Opcosts)
and is deducted from cash flow.
Similar to ORR Paid Out. It is paid out of
Operating Income.
Portion of revenue less all

royalty interest paid
To calculate the cases Economic Limit using another

Parties WI or NRI position select Use separate economic
Limit interest and then select Show economic limit interest
Opcost Tab Explained
Opcost Tab
Overhead Percent
Use the Opcost (Operating Costs) tab to enter any

Operating costs to account for day-to-day expenses an
Other income and expenses.
There are essentially four types of operating costs:
1.
2.
3.
4.
Percent (overhead)
Fixed Time ($M/time period)
Per volume
Per well

Overhead (OH)
The overhead calculation applies to only those operatin

costs and capital types that are defined in the Peep mo
to be eligible for overhead.
Ovhd on Opcost Overhead as a percent of operating
Ovhd on Capital Overhead as a percent of capital

Overhead (OH)
Overhead is a way of specifying some costs that are

not directly related to operations. A clear example wo
be the headoffices costs. It is quite standard to
approximate these costs as percentages of some of th
real costs or investments. Peep has built in functionali
to implement this calculation style easily.
How Peep calculates the Ovhd percent depends how
the specific variables are setup in the model.
Total Overhead = Opcost Variable * %Ovhd
Calc Parms
Purchase Price
Purchase Price Calculation
Purchase Price Calculation (cont)
Calc Parms Tab Explained
Risk Calc

Risk Calc
Type in the net risked capital (dry hole cost).
Type date of the cost. If left at default date it will
be the evaluation date of the document.
Type the tax rate to use on the exposed capital to
determine the after tax cost of capital. Note this
only affects the after tax risk calculations.
Type the PoS. Note this will display an additional
line on your risk report aside from the default %
that already appears.
Loan Detail

Loan Detail
The loans calculation allow you to pay off a loan using

the cash flow from a case or consolidation. Both the
cases/consolidations results and loan payment results
are effected. The Loan Calc will impact AT results only.
Peep will not allow a negative ATCF and will increase
the loan balance by the amount necessary to prevent
the CF from being negative.
Loan Detail
Enter the balance of the loan at Eval Date.
Enter the percentage of the AT revenue that will
contribute to paying back the loan.
Enter the monthly interest percent.
Check the Calculate each run box.

Loan Detail
The ATCF for the case

or consolidation are reduced
by the amount paid on the loan.
The NPV is then recalculated

Loan Detail
Working Capital

Working Capital
You can adjust the cash flows in a case on the differenc

between the date you receive an asset or service and t
date you send a check to pay for it. Cash flows can be
adjusted for the following:
The date of production and the date you receive pay
The date of production and the date you pay the lea
holder or
royalty owner.
The date you receive an asset and the date you sen
a check to pay for it.
Working Capital
For example, you might install a compressor on a given d

but not actually receive an invoice and send a check to pa
for the invoice until after the compressor is in operation.
Peep allows you to enter the date you receive the
compressor in the Peep case (when entering capital), and
enter an adjustment period on the payment of the compr
When calculating the cash flows for the case, Peep shifts
date of the capital expenditure.

Working Capital
Note this function has its limitations and should be used with the understanding that it was designed for
a specific clients needs. For example the shift functionality will shift all capital in the case.
Capital Tab Explained
Remaining Life

Remaining Life
The Remaining Life dialog box is used to
specify the
Remaining life of your well or to change the
reserve balance used to determine the unit of
production (UOP) depletion amount.
Note: The Remaining Life option does not work
unless you have the Use useful life if less option
selected for the Straight Line depreciation pool
definition in the Model. You can select the option
to use a half year rule.

Pool
Select this check box if you want the capital to
be defined as a tax pool (I.e. depreciation will be
calculated, but the capital will not affect before
tax cash flow).
If a sunk cost is entered into Peep (a capital
amount that occurs before the Eval Date of the
case) and the depreciation Pool option is
selected Peep will apply the entire amount to the
Depreciation Pool in the month and year
indicated.
Preceding Case
Preceding Case
Preceding Case
Preceding cases allow you to model behind-the-pipe

evaluations where and up-hole zone is developed after
lower zone has hit its economic limit.
When a company produces from a primary zone (PDP)

reaches its economic limit, the company can then star
producing from the behind-the-pipe or secondary zon
Using preceding cases, a case can be created to evalu

the secondary zone. The start date of this case would
based on the economic limit of the preceding case tha
was created to evaluate the primary zone.
Ring Fence Document Explained
Ring Fence

Uses for Ring Fences:
1. Cost case Allocation
2. GEL consolidations

Cost case allocation:

Select Cost Allocation.

This will enable the Ring
Fence to perform the Cost
Allocation calculation.
Select the Consolidate

Economic Limit (save to
cases). This will case the
GEL back to the input cases

Select Cost Allocation.

This will enable the Ring
Fence to perform the Cost
Allocation calculation.
Select the Consolidate

Economic Limit (save to
cases). This will case the
GEL back to the input cases

Select the cases you want to use in the

allocation. Include the cost case.
Apply the appropriate allocation factor

to each case. Note that the cost case
must have an allocation factor of at least
1 in order to get it to work correctly.

2 Day Peep Class Slides - 2005

Uploaded by

Copyright:

Available Formats

2 Day Peep Class Slides - 2005

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

2 Day Peep Class Slides - 2005

Uploaded by

Copyright:

Available Formats

Introduction to Peep

Instructor: Ashley Orr

2004 Schlumberger Information Solutions. All rights reserved.

2004 Schlumberger Information Solutions. All rights reserved.

Client Service Desk

Entering Case Data

Learn Software Inputs

2004 Schlumberger Information Solutions. All rights reserved.

What does Peep stand for?

2004 Schlumberger Information Solutions. All rights reserved.

2004 Schlumberger Information Solutions. All rights reserved.

Is an International Economic Evaluation, Decline Analysis and

2004 Schlumberger Information Solutions. All rights reserved.

Import Well Data

Forecast the Well Data

Link Well Data to an

Forecast Cash Flow

The Peep System

The Well Document

Both a container for historical production

2004 Schlumberger Information Solutions. All rights reserved.

The Case Document

Case documents store entered project

2004 Schlumberger Information Solutions. All rights reserved.

Peep Select Window

Menu and Tools

Basic Data Entry For Economic Analysis

2004 Schlumberger Information Solutions. All rights reserved.

Simplified Financial Calculation

Revenue (Volume * Price)

2004 Schlumberger Information Solutions. All rights reserved.

Important Dates in Peep

Basic Cash Flow

2004 Schlumberger Information Solutions. All rights reserved.

The economic evaluation begins on this date

2004 Schlumberger Information Solutions. All rights reserved.

This determines the point at which escalations begin

2004 Schlumberger Information Solutions. All rights reserved.

2004 Schlumberger Information Solutions. All rights reserved.

2004 Schlumberger Information Solutions. All rights reserved.

Important Dates in Peep

2004 Schlumberger Information Solutions. All rights reserved.

2004 Schlumberger Information Solutions. All rights reserved.

2004 Schlumberger Information Solutions. All rights reserved.

2004 Schlumberger Information Solutions. All rights reserved.

2004 Schlumberger Information Solutions. All rights reserved.

2004 Schlumberger Information Solutions. All rights reserved.

Operation Overwrite ALL

2004 Schlumberger Information Solutions. All rights reserved.

2004 Schlumberger Information Solutions. All rights reserved.

Scenarios and Risking

Production (by product type)

2004 Schlumberger Information Solutions. All rights reserved.

@ E.L. of last well

Filtering and Grouping

2004 Schlumberger Information Solutions. All rights reserved.

Filtering and Grouping

2004 Schlumberger Information Solutions. All rights reserved.

Filtering and Grouping