Colombia Ecopetrol Fields Round 2020

Summary

In September 2020, the Ecopetrol group offered its stake in certain assets in the prolific basins of Los Llanos, Valle Superior del Magdalena and Valle Medio del Magdalena.

This document shows the application of the production forecast model in order to estimate the remaining value of the portfolio assets for fields includes in Colombia Ecopetrol Fields Round 2020.

The result shows a ranking in terms of net present value and proven developed reserves for each field included in Ecopetrol’s offer.

Introduction

The production forecast model allows estimating the remaining reserves of an oil field based on its production history.

The system makes the best fit of the production history and the generated model allows forecasting the future behavior of the field.

The volumes estimated by the system are considered as proven developed reserves.

Proved Developed Reserves are those Proved Reserves that can be expected to be recovered through existing wells and facilities and by existing operating methods.

The system performs the economic evaluation of the estimated volumes by calculating the net present value of the field.

The use of uniform parameters in the model makes it possible to evaluate the fields included in Ecopetrol’s offer with similar criteria. This was done with the purpose of having uniform criteria for ranking all fields, obviously a future use of the system allows applying different criteria for each field.

The data used in this report was obtained from the Ecopetrol website.

The results of the application of the model to the Colombia 2020 Round are shown below.

Ecopetrol Asset Details

Ecopetrol published details of the assets included in the round, the following table shows the data.

Ecopetrol Asset Details

Assets	OOIP	RF	Production	API	Operator
Upia	145	37	536	21-30	Hocol
Rancho Hermoso	135	25	938	18-36	Canacol
La Punta	39	41	1225	35-36	Hocol
Andalucia	57	20	86	33	Hocol
Totare	11	8	70	21	Hocol
Toy	11	10	119	18	Hocol
San Luis	61	2	0	36	Ecopetrol
Tenerife	27	2	0	20	Ecopetrol
Lebrija	10	8	0	27	Ecopetrol
Units description:
OOIP: Original oil in place in millions oil barrels RF: % Recovery factor @ 2019 Production: barrel oil per days @ April-2020 API: API degree Operator

Fields Evaluation

The evaluation of each field includes three aspects:

• Production forecast
  
• Economic evaluation
  
• Field summary

Although uniform criteria are used for the evaluation of all fields, it is possible to apply specific values for each field, such as, for example, cut-off of minimum production; price of oil taking into consideration the API oil, among others.

The system requires in addition to the production of the field, a variable defined as forecast production time (FPT) to carry out the forecast.

On the other hand, the system determines the field daily production rate at FPT period, which is closely related to the economic limit of the field.

Field: Rancho Hermoso

Production Forecast

The following figures show the results of the system.

• Q: Cumulative oil production, units: mb (thousand oil barrels)
• Qf: Forecast cumulative oil production, units: mb (thousand oil barrels)
• q: Daily oil production, units: bpd (barrels per days)
• qf: Forecast Daily oil production, units: bpd (barrels per days)

Economic Evaluation

The economic evaluation calculates the net present value (NPV) from the production profile estimated by the production forecast model.

The following table shows the parameters used for the economic evaluation and the results obtained by the production forecast model.

Economic Evaluation Parameters & Results

Fields	Parameters	Units	Values
ranchohermoso	Oil Price	USD/b	46.5
ranchohermoso	Opex (Fix)	USD/months	522.2
ranchohermoso	Opex (Variable)	USD/b	11.1
ranchohermoso	Royalty	%	8.0
ranchohermoso	Tax	%	39.5
ranchohermoso	Discount Rate	%	15.0
ranchohermoso	Proved developed reserves (Model forecast)	mb	1459.0
ranchohermoso	NPV before tax	mmUSD	40.6
ranchohermoso	NPV after tax	mmUSD	24.5
ranchohermoso	Forecast production time (FPT)	Years	5.0
ranchohermoso	Field daily production rate at FPT	bpd	615.0
Units description:
USD/b: US dollar per oil barrels USD/months: US dollar per months % : Percentage mb: Thousands oil barrels mmUSD: Millions US dollars Years: Years bpd: Barrels oil per days FPT: Forecast production time (years)

Field Summary

The following figure shows the results of the production forecast model.

• Field: Rancho Hermoso
  
• Operator: Canacol, Hocol
  
• Production: 938 bpd - Abr 2020
  
• OOIP: 135 mmbp, FR: 25%
  
• API: 18-36 API

# save ftwv - rancho hermoso model
setwd("~/Documents/R/julio/data/processed")
saveRDS(ftwv, file = "ranchohermoso_model_19nov20")

Field: Santiago (Upia)

Production Forecast

The following figures show the results of the system.

• Q: Cumulative oil production, units: mb (thousand oil barrels)
• Qf: Forecast cumulative oil production, units: mb (thousand oil barrels)
• q: Daily oil production, units: bpd (barrels per days)
• qf: Forecast Daily oil production, units: bpd (barrels per days)

Economic Evaluation

The economic evaluation calculates the net present value (NPV) from the production profile estimated by the production forecast model.

The following table shows the parameters used for the economic evaluation and the results obtained by the production forecast model.

Economic Evaluation Parameters & Results

Fields	Parameters	Units	Values
santiago	Oil Price	USD/b	46.5
santiago	Opex (Fix)	USD/months	522.2
santiago	Opex (Variable)	USD/b	11.1
santiago	Royalty	%	8.0
santiago	Tax	%	39.5
santiago	Discount Rate	%	15.0
santiago	Proved developed reserves (Model forecast)	mb	767.0
santiago	NPV before tax	mmUSD	20.5
santiago	NPV after tax	mmUSD	12.4
santiago	Forecast production time (FPT)	Years	5.0
santiago	Field daily production rate at FPT	bpd	294.0
Units description:
USD/b: US dollar per oil barrels USD/months: US dollar per months % : Percentage mb: Thousands oil barrels mmUSD: Millions US dollars Years: Years bpd: Barrels oil per days FPT: Forecast production time (years)

Field Summary

The following figure shows the results of the production forecast model.

• Field: Santiago (Upia)
  
• Operator: Hocol
  
• Production: 536 bpd - Abr 2020
  
• OOIP: 145 mmbp, FR: 37%
  
• API: 21-30 API

Field: La Punta

Production Forecast

The following figures show the results of the system.

• Q: Cumulative oil production, units: mb (thousand oil barrels)
• Qf: Forecast cumulative oil production, units: mb (thousand oil barrels)
• q: Daily oil production, units: bpd (barrels per days)
• qf: Forecast Daily oil production, units: bpd (barrels per days)

Economic Evaluation

The economic evaluation calculates the net present value (NPV) from the production profile estimated by the production forecast model.

The following table shows the parameters used for the economic evaluation and the results obtained by the production forecast model.

Economic Evaluation Parameters & Results

Fields	Parameters	Units	Values
lapunta	Oil Price	USD/b	46.5
lapunta	Opex (Fix)	USD/months	522.2
lapunta	Opex (Variable)	USD/b	11.1
lapunta	Royalty	%	8.0
lapunta	Tax	%	39.5
lapunta	Discount Rate	%	15.0
lapunta	Proved developed reserves (Model forecast)	mb	506.0
lapunta	NPV before tax	mmUSD	13.2
lapunta	NPV after tax	mmUSD	8.0
lapunta	Forecast production time (FPT)	Years	5.0
lapunta	Field daily production rate at FPT	bpd	252.0
Units description:
USD/b: US dollar per oil barrels USD/months: US dollar per months % : Percentage mb: Thousands oil barrels mmUSD: Millions US dollars Years: Years bpd: Barrels oil per days FPT: Forecast production time (years)

Field Summary

The following figure shows the results of the production forecast model.

• Field: La Punta
  
• Operator: Hocol
  
• Production: 1225 bpd - Abr 2020
  
• OOIP: 39 mmbp, FR: 41%
  
• API: 35-36 API

Field: Santo Domingo

Production Forecast

The following figures show the results of the system.

• Q: Cumulative oil production, units: mb (thousand oil barrels)
• Qf: Forecast cumulative oil production, units: mb (thousand oil barrels)
• q: Daily oil production, units: bpd (barrels per days) (barrels per days)
• qf: Forecast Daily oil production, units: bpd (barrels per days)

Economic Evaluation

The economic evaluation calculates the net present value (NPV) from the production profile estimated by the production forecast model.

The following table shows the parameters used for the economic evaluation and the results obtained by the production forecast model.

Economic Evaluation Parameters & Results

Fields	Parameters	Units	Values
santodomingo	Oil Price	USD/b	46.5
santodomingo	Opex (Fix)	USD/months	522.2
santodomingo	Opex (Variable)	USD/b	11.1
santodomingo	Royalty	%	8.0
santodomingo	Tax	%	39.5
santodomingo	Discount Rate	%	15.0
santodomingo	Proved developed reserves (Model forecast)	mb	676.0
santodomingo	NPV before tax	mmUSD	16.5
santodomingo	NPV after tax	mmUSD	10.0
santodomingo	Forecast production time (FPT)	Years	5.0
santodomingo	Field daily production rate at FPT	bpd	182.0
Units description:
USD/b: US dollar per oil barrels USD/months: US dollar per months % : Percentage mb: Thousands oil barrels mmUSD: Millions US dollars Years: Years bpd: Barrels oil per days FPT: Forecast production time (years)

Field Summary

The following figure shows the results of the production forecast model.

• Field: Totare
  
• Operator: Hocol
  
• Production: 1225 bpd - Abr 2020
  
• OOIP: 39 mmbp, FR: 41%
  
• API: 35-36 API

Field: Totare

Production Forecast

The following figures show the results of the system.

• Q: Cumulative oil production, units: mb (thousand oil barrels)
• Qf: Forecast cumulative oil production, units: mb (thousand oil barrels)
• q: Daily oil production, units: bpd (barrels per days)
• qf: Forecast Daily oil production, units: bpd (barrels per days)

Economic Evaluation

The economic evaluation calculates the net present value (NPV) from the production profile estimated by the production forecast model.

The following table shows the parameters used for the economic evaluation and the results obtained by the production forecast model.

Economic Evaluation Parameters & Results

Fields	Parameters	Units	Values
totare	Oil Price	USD/b	46.5
totare	Opex (Fix)	USD/months	522.2
totare	Opex (Variable)	USD/b	11.1
totare	Royalty	%	8.0
totare	Tax	%	39.5
totare	Discount Rate	%	15.0
totare	Proved developed reserves (Model forecast)	mb	54.0
totare	NPV before tax	mmUSD	1.4
totare	NPV after tax	mmUSD	0.8
totare	Forecast production time (FPT)	Years	5.0
totare	Field daily production rate at FPT	bpd	24.0
Units description:
USD/b: US dollar per oil barrels USD/months: US dollar per months % : Percentage mb: Thousands oil barrels mmUSD: Millions US dollars Years: Years bpd: Barrels oil per days FPT: Forecast production time (years)

Field Summary

The following figure shows the results of the production forecast model.

• Field: Totare
  
• Operator: Hocol
  
• Production: 70 bpd - Abr 2020
  
• OOIP: 11 mmbp, FR: 8%
  
• API: 21 API

Field: Andalucia Sur

Production Forecast

The following figures show the results of the system.

• Q: Cumulative oil production, units: mb (thousand oil barrels)
• Qf: Forecast cumulative oil production, units: mb (thousand oil barrels)
• q: Daily oil production, units: bpd (barrels per days)
• qf: Forecast Daily oil production, units: bpd (barrels per days)

Economic Evaluation

The economic evaluation calculates the net present value (NPV) from the production profile estimated by the production forecast model.

The following table shows the parameters used for the economic evaluation and the results obtained by the production forecast model.

Economic Evaluation Parameters & Results

Fields	Parameters	Units	Values
andaluciasur	Oil Price	USD/b	46.5
andaluciasur	Opex (Fix)	USD/months	522.2
andaluciasur	Opex (Variable)	USD/b	11.1
andaluciasur	Royalty	%	8.0
andaluciasur	Tax	%	39.5
andaluciasur	Discount Rate	%	15.0
andaluciasur	Proved developed reserves (Model forecast)	mb	75.0
andaluciasur	NPV before tax	mmUSD	2.2
andaluciasur	NPV after tax	mmUSD	1.4
andaluciasur	Forecast production time (FPT)	Years	5.0
andaluciasur	Field daily production rate at FPT	bpd	37.0
Units description:
USD/b: US dollar per oil barrels USD/months: US dollar per months % : Percentage mb: Thousands oil barrels mmUSD: Millions US dollars Years: Years bpd: Barrels oil per days FPT: Forecast production time (years)

Field Summary

The following figure shows the results of the production forecast model.

• Field: Andalucia Sur
  
• Operator: Hocol
  
• Production: 86 bpd - Abr 2020
  
• OOIP: 57 mmbp, FR: 20%
  
• API: 33 API

Field: San Luis - Colorado

Production Forecast

The following figures show the results of the system.

• Q: Cumulative oil production, units: mb (thousand oil barrels)
• Qf: Forecast cumulative oil production, units: mb (thousand oil barrels)
• q: Daily oil production, units: bpd (barrels per days)
• qf: Forecast Daily oil production, units: bpd (barrels per days)

Economic Evaluation

The economic evaluation calculates the net present value (NPV) from the production profile estimated by the production forecast model.

The following table shows the parameters used for the economic evaluation and the results obtained by the production forecast model.

Economic Evaluation Parameters & Results

Fields	Parameters	Units	Values
sanluiscolorado	Oil Price	USD/b	46.5
sanluiscolorado	Opex (Fix)	USD/months	522.2
sanluiscolorado	Opex (Variable)	USD/b	11.1
sanluiscolorado	Royalty	%	8.0
sanluiscolorado	Tax	%	39.5
sanluiscolorado	Discount Rate	%	15.0
sanluiscolorado	Proved developed reserves (Model forecast)	mb	82.0
sanluiscolorado	NPV before tax	mmUSD	2.0
sanluiscolorado	NPV after tax	mmUSD	1.2
sanluiscolorado	Forecast production time (FPT)	Years	5.0
sanluiscolorado	Field daily production rate at FPT	bpd	38.0
Units description:
USD/b: US dollar per oil barrels USD/months: US dollar per months % : Percentage mb: Thousands oil barrels mmUSD: Millions US dollars Years: Years bpd: Barrels oil per days FPT: Forecast production time (years)

Field Summary

The following figure shows the results of the production forecast model.

• Field: San Luis - Colorado
• Operator: Ecopetrol
  
• Production: 0 bpd - Abr 2020
  
• OOIP: 61 mmbp, FR: 2%
  
• API: 36 API

Field: Ortega (Toy)

Production Forecast

The following figures show the results of the system.

• Q: Cumulative oil production, units: mb (thousand oil barrels)
• Qf: Forecast cumulative oil production, units: mb (thousand oil barrels)
• q: Daily oil production, units: bpd (barrels per days)
• qf: Forecast Daily oil production, units: bpd (barrels per days)

Economic Evaluation

The economic evaluation calculates the net present value (NPV) from the production profile estimated by the production forecast model.

The following table shows the parameters used for the economic evaluation and the results obtained by the production forecast model.

Economic Evaluation Parameters & Results

Fields	Parameters	Units	Values
ortega	Oil Price	USD/b	46.5
ortega	Opex (Fix)	USD/months	522.2
ortega	Opex (Variable)	USD/b	11.1
ortega	Royalty	%	8.0
ortega	Tax	%	39.5
ortega	Discount Rate	%	15.0
ortega	Proved developed reserves (Model forecast)	mb	302.0
ortega	NPV before tax	mmUSD	8.5
ortega	NPV after tax	mmUSD	5.1
ortega	Forecast production time (FPT)	Years	5.0
ortega	Field daily production rate at FPT	bpd	139.0
Units description:
USD/b: US dollar per oil barrels USD/months: US dollar per months % : Percentage mb: Thousands oil barrels mmUSD: Millions US dollars Years: Years bpd: Barrels oil per days FPT: Forecast production time (years)

Field Summary

The following figure shows the results of the production forecast model.

• Field: Ortega (Toy)
  
• Operator: Hocol
  
• Production: 119 bpd - Abr 2020
  
• OOIP: 11 mmbp, FR: 10%
  
• API: 18 API

Field: Doña Maria (Lebrija)

Production Forecast

The following figures show the results of the system.

• Q: Cumulative oil production, units: mb (thousand oil barrels)
• Qf: Forecast cumulative oil production, units: mb (thousand oil barrels)
• q: Daily oil production, units: bpd (barrels per days)
• qf: Forecast Daily oil production, units: bpd (barrels per days)

Economic Evaluation

The economic evaluation calculates the net present value (NPV) from the production profile estimated by the production forecast model.

The following table shows the parameters used for the economic evaluation and the results obtained by the production forecast model.

Economic Evaluation Parameters & Results

Fields	Parameters	Units	Values
donamaria	Oil Price	USD/b	46.5
donamaria	Opex (Fix)	USD/months	522.2
donamaria	Opex (Variable)	USD/b	11.1
donamaria	Royalty	%	8.0
donamaria	Tax	%	39.5
donamaria	Discount Rate	%	15.0
donamaria	Proved developed reserves (Model forecast)	mb	29.0
donamaria	NPV before tax	mmUSD	0.7
donamaria	NPV after tax	mmUSD	0.4
donamaria	Forecast production time (FPT)	Years	5.0
donamaria	Field daily production rate at FPT	bpd	11.0
Units description:
USD/b: US dollar per oil barrels USD/months: US dollar per months % : Percentage mb: Thousands oil barrels mmUSD: Millions US dollars Years: Years bpd: Barrels oil per days FPT: Forecast production time (years)

Field Summary

The following figure shows the results of the production forecast model.

• Field: Doña Maria (Lebrija)
  
• Operator: Ecopetrol
  
• Production: 0 bpd - Abr 2020
  
• OOIP: 10 mmbp, FR: 8%
  
• API: 27 API

Fields Ranking

Proved Developed Reserves

The following figure shows the results of the application of the model to estimate the volumes of proven developed reserves in the fields associated with the round.

NPV after tax

The following figure shows the results of the estimation of the net present value of the fields associated with the round.

Field daily production forecast

The following figure shows the results of the estimation of the Field daily production rate at forecast production time of the fields associated with the round.

Fields Summary Evaluation

Summary All Fields

Parameters	Units	andaluciasur	donamaria	lapunta	ortega	ranchohermoso	sanluiscolorado	santiago	santodomingo	totare
Discount Rate	%	15.0	15.0	15.0	15.0	15.0	15.0	15.0	15.0	15.0
Field daily production rate at FPT	bpd	37.0	11.0	252.0	139.0	615.0	38.0	294.0	182.0	24.0
Forecast production time (FPT)	Years	5.0	5.0	5.0	5.0	5.0	5.0	5.0	5.0	5.0
NPV after tax	mmUSD	1.4	0.4	8.0	5.1	24.5	1.2	12.4	10.0	0.8
NPV before tax	mmUSD	2.2	0.7	13.2	8.5	40.6	2.0	20.5	16.5	1.4
Oil Price	USD/b	46.5	46.5	46.5	46.5	46.5	46.5	46.5	46.5	46.5
Opex (Fix)	USD/months	522.2	522.2	522.2	522.2	522.2	522.2	522.2	522.2	522.2
Opex (Variable)	USD/b	11.1	11.1	11.1	11.1	11.1	11.1	11.1	11.1	11.1
Proved developed reserves (Model forecast)	mb	75.0	29.0	506.0	302.0	1459.0	82.0	767.0	676.0	54.0
Royalty	%	8.0	8.0	8.0	8.0	8.0	8.0	8.0	8.0	8.0
Tax	%	39.5	39.5	39.5	39.5	39.5	39.5	39.5	39.5	39.5
Units description:
USD/bp: US dollar per oil barrels USD/months: US dollar per months % : Percentage mb: Thousands oil barrels mmUSD: Millions US dollars Years: Years bpd: Barrels per days FPT: Forecast production time (years)