STUDY OF PATERN WATER INJECTION IN LOW PERMEABILITY

RESERVOIR WITH HORIZONTAL WELL

BACHELOR THESIS

Jay Bianco Sembiring Meliala

12216076

Submitted as partial fulfillment of the requirements for the degree of

BACHELOR OF ENGINEERING
in Petroleum Engineering study program

PETROLEUM ENGINEERING STUDY PROGRAM

FACULTY OF MINING AND PETROLEUM ENGINEERING
INSTITUT TEKNOLOGI BANDUNG
2020
STUDY OF PATERN WATER INJECTION IN LOW PERMEABILITY
RESERVOIR WITH HORIZONTAL WELL

BACHELOR THESIS

Jay Bianco Sembiring Meliala

12216076

Submitted as partial fulfillment of the requirements for the degree of

BACHELOR OF ENGINEERING
in Petroleum Engineering study program

Approved by:
Date…………………………

Thesis Adviser,

Ardhi Hakim Lumban Gaol, ST., M.Si., Ph.D.

198706302012121001
STUDY OF PATERN WATER INJECTION IN LOW PERMEABILITY RESERVOIR
WITH HORIZONTAL WELL

Jay Bianco Sembiring Meliala* and Ardhi Hakim Lumban Gaol, ST., M.Si., Ph.D.**

Copyright 2020, Institut Teknologi Bandung

Abstract
This study discusses methods to develop low resistivity, low contrast (LRLC) formation in Indonesia. LRLC
formations were found throughout Talang Akar formation but were initially interpreted as non-productive
formations. This study focuses on the development of LRLC zones, through the use of horizontal well, 5-spot
well patern and water injection, these zones could be developed economically.

Reservoir simulation is conducted on field X within 20 years of production period to forecast how effective
horizontal well and water injection to improve the oil recovery factor in a low permeability reservoir. Thus,
sensitivity studies were created to find the optimum recovery factor by varying operational parameter (i.e., water
injection rates). The author varies the water injection rate from 500 bbl/d to 3000 bbl/d. Those numbers are chosen
because the initial total production oil rate is 2000 bbl/d.

After the reservoir simulation has been done in CMG, the base case without water injection results cumulative
oil production for 20 years is 993.67 MSTB (Recovery Factor = 46%) for one pattern. For the best technical is
with 2000 bbl/d water injection rate which produces 1322.07 MSTB (Recovery Factor = 61.24%). The most
profitable scenario is also acquired when the water injection rate is 2000 bbl/d. This scenario could give the Net
Present Value at a 10 percent discount rate of $ 18,309,909.71 and IRR of 54%.

Keywords: Low Resistivity , Low Contrast, Horizontal Well, 5-Spot Well Patern and Water Injection

Sari
Penelitian ini membahas metode untuk mengembangkan formasi yang berkarakteristik low resistivity, low
contrast (LRLC) di Indonesia. Formasi LRLC ditemukan di seluruh formasi Talang Akar tetapi awalnya
ditafsirkan sebagai formasi non-produktif. Studi ini berfokus pada pengembangan zona LRLC, melalui
penggunaan sumur horizontal, pola sumur 5 titik dan injeksi air, agar zona ini dapat dikembangkan secara
ekonomis.

Simulasi reservoir dilakukan pada lapangan X selama 20 tahun, untuk memperkirakan seberapa efektif injeksi air
pada sumur horizontal untuk meningkatkan faktor perolehan minyak dalam reservoir dengan permeabilitas
rendah. Dengan demikian, studi sensitivitas diciptakan untuk menemukan Recovery Factor yang optimal dengan
memvariasikan parameter operasional (yaitu, laju injeksi air). Penulis memvariasikan laju injeksi air dari 500bbl/d
hingga 3000bbl/d. Angka-angka itu dipilih karena laju total produksi minyak awal adalah 2000bbl/d.

Setelah simulasi reservoir dilakukan dalam CMG, skenario dasar denagn laju injeksi air 0 bbl/d menghasilkan
produksi minyak kumulatif selama 20 tahun adalah 993,67 MSTB (RF = 46%) untuk satu pola. Untuk skenario
teknis terbaik adalah dengan laju injeksi air 2000 bbl/d yang menghasilkan 1322,07 MSTB (RF = 61.24%) untuk
satu pola. Skenario yang paling menguntungkan juga diperoleh ketika laju injeksi air sebesar 2000 bbl/d. Skenario
ini dapat memberikan $ 18.309.909,71 Net Present Value pada discount rate 10 persen dan IRR 53.66%.

Kata kunci: …..

*) Student of Petroleum Engineering Study Program, Institut Teknologi Bandung, 2016 batch
**) Thesis Adviser in Petroleum Engineering Study Program, Institut Teknologi Bandung

1

1. INTRODUCTION
1.1 Regional Geology
The South Sumatra Basin is part of the lower arc basin
of Sumatra's regional tectonics, which covers 117,000
km2, mainly onshore. In this South Sumatra basin, the
Tertiary sediments were deposited in the transgression
cycle, Middle Eocene-Middle Miocene age in the form
of land / continental sediment, river / fluviatile and
shallow sea. The Tertiary sediments are out of tune
above the Pre-Tertiary basement (Adiwidjaja and
Coster, 1973). This basin is one of the tertiary back-arc
basins which produce oil and natural gas Figure 1.
1.2 Tectonic Framework
The South Sumatra Basin is bounded by the Tinggi or
arc of Lampung and Palembang which separates the
South Sumatra Basin from the Sunda Basin in the
West-Java Sea. The Central and South Sumatra basins
are separated by the Tigapuluh mountains. The western
boundary is Bukit Barisan which is Plio-Plistocene.
The general direction of the structure in this basin is
West-Northwest, East-Southeast and North-South
Figure 2. According to Bishop et al. (2001) The South
Sumatra Basin can be divided into 4 (four) Sub-basins
namely: Jambi Sub-basin, North Palembang Sub-
Basin, Central Palembang Sub-Basin and South
Palembang Sub-Basin Figure 3.
The South Sumatra Basin is formed by three main
tectonic phases:
1. Extension during Late Paleocene to Early Miocene,
forming a north-pointing graben filled with Eocene to
Early Miocene deposits
2. Normal fault from Early Miocene to Early Pliocene.
3. Compression involving bedrock, basin inversion,
and reversal of normal faults in the Pliocene that forms
anticline, is the main trap in this area Figure 2.
West-Northwest and East-Southeast and North-South
faults activate deposition in the South Sumatra basin,
some of which have experienced reversals from the
Miocene to the Plio-Pleistocene, as well as the
inversion basin (Pulunggono et. Al., 1992). Subduction
systems off the coast of Sumatra to South Java, starting
with the Late Oligocene, form the current tectonic
elements. Graben and the major faults in the North
Sumatra Basin are oriented North-Northwest to South-
Southeast.
1.3 Regional Stratigraphy
The lithostratigraphy of this area consists of, Pre-
Tertiary Basement, Kikim Tufs, Lemat Formation with
Anggota Benakat at the bottom, Talang Akar
Formation, Pendopo Formation, Baturaja Formation,
Gumai Formation, Air Benakat Formation, Muara
Enim Formation, Palembang Formation, and
Quaternary Sedimentation Figure 4.
2
1.4 Description of Talang Akar Formation
1.4.1 Petroleum System of Talang Akar Formation
The Talang Akar Formation is believed to be the main
source of commercial hydrocarbons in the South
Sumatra Basin. The Talang Akar Formation which was
drilled at the edge of the graben structure only became
a poor quality gas-prone source rock, while shale and
paralis coal layers were of good quality and thicker
host rock such as those found in the Central and South
Palembang Sub-Basin. The upper TOC value of Talang
Akar varies from 3.0 to 50.0 with a Hydrogen Index
(HI) between 150-310 mgHC / g, in the Palembang
Sub-Basin there are shales with 5% TOC and HI 110-
400 mgHC / g, while coal has a HI 400- 470 mgHC / g.
1.4.2 Reservoir Rocks of Talang Akar Formation
The lower part of the Talang Akar Formation consists
of channel fill sandstones, crevasse splay and point bars
from the fluvio-deltaic formation environment in the
north and plain delta, delta front, river mouth bar, and
marine barrier bar in the south. Non-marine succession
shows proximal to distal vertical progressions that
cause marine transgressions in the southern part of Raja
(Hutapea, 1981). Sandstone reservoirs are concentrated
in plaited plains and meander channels.
There is a spatial relationship between fluvial facies
that occur in the rift topography and the distance from
the sediment source. The reservoir quality is poor in
alluvial sediments and proximal-distal deltas, with 10-
15% porosity and 1-50 mD permeability. Conversely,
reservoir quality is very good in sediments located far
from the source but deposited in high-energy
environments. Its porosity reaches 15-29% and
permeability is 100-300 mD.
1.5 Objectives
The objectives of this study are :
1. To understand the mechanism of Water Drive
with horizontal well on increasing oil
recovery in Low Resistivity, Low Contrast
Reservoir for the X field case in Talang Akar
Formation.
2. To find the best technical scenario through
sensitivity study in reservoir simulation for
the X field case.
3. To analyze the most profitable scenario
between Production Sharing Contract Cost
Recovery and Gross Split for the X field case
2. BASIC THEORY
2.1 Horizontal Well
Production/injection well pattern and well spacing and
alignment with regards to inherent stresses in the
reservoir are important optimization parameters. It has
been observed that smaller well spacing provides better
development results when using horizontal well
patterns (Zhao et al., 2011) Figure 5.
Because for injectors, wellbore orientation with respect
to the rock stress direction has more significant impact
on a field development than producer wells, if a
horizontal production well will be considered for
conversion into a horizontal injection well, it is
recommended to check the rock stress direction for the
reservoir (Bodnar et at., 1997). In the presence of
natural fractures, the horizontal wells should be lined
parallel to the fracture locations to mobilize more oil
(Westermark et al., 2005).
Well pattern is another criteria determines
waterflooding performance with horizontal wells
(Popa and Turta, 2002; Zakirov et al., 2012). Some
numerically tested well patterns given in Figure 6
showed that line drive well pattern provides good
results for waterflooding through horizontal wells.
The orientation of high-permeability layers will also
impact the performance of horizontal injectors.
Because in large-scale waterflooding and pressure
maintenance projects these high permeable layers
result early water breakthrough due to channeling
which consequently causes poor sweep efficiency. The
barriers placed in fractures and the implementation of
inflow control devices within the horizontal well can
be created good solutions for those cases (Sierra et al.,
2011; Banerjee and Hascakir, 2015).
Depending on the reservoir properties as well as the
complexity and intelligence of the completion, water
may not be uniformly injected along the entire wellbore
and, hence; pressure support may not be provided as
desired. The friction will cause pressure loss along the
horizontal section of a well and loss will be amplified
with longer wells and can lead to a non-uniform
pressure distribution along the wellbore, which them
results in an uneven flow of fluids injected into the
surrounding reservoir and potentially, poor sweep
efficiency. To address this non-ideal distribution, an
inverted production-injection well pattern where fluid
from both wells is flowing in the same direction is
proposed (Popa and Clipea, 1998) Figure 7.
Two main configurations are available with regards to
parallel horizontal production and injection well
pairing: toe to toe and toe to heel. The pressure losses
in the heel of the producers are less than the pressure at
the toe, however, vice versa for injectors (Banerjee and
Hascakir, 2017). When a producer/injector pair is
arranged in a toe to toe pattern, early water
breakthrough may happen due to higher value of the
pressure differential from the heel to heel area than toe
to toe area. However, toe to heel pattern creates steadier
the differential pressure for the same locations which
3
can delay the water break through time and increase the
sweep (Zhao et al., 2011).
2.2 Waterflood
A method of secondary recovery in which water is
injected into the reservoir formation to displace
residual oil. The water from injection wells physically
sweeps the displaced oil to adjacent production wells.
Potential problems associated with waterflood
techniques include inefficient recovery due to
variable permeability, or similar conditions affecting
fluid transport within the reservoir, and early
water breakthrough that may cause production and
surface processing problems.
After a waterflood development plan has been decided,
optimized, and implemented, the next step is to
evaluate the performance of the water injection
program. Several methods are available for evaluating
the success of an implemented horizontal waterflood
scheme, including reservoir surveillance techniques,
software or equipment that has actually has been used
in fields to monitor and evaluate success, and
comparison of pre-development/implementation
simulation predictions with actual field results.
The main surveillance methods can be listed as (1)
static pressure testing from vertical observation wells
to evaluate the injection performance and predict
geological constraints like faults; (2) Production
Logging Test (PLT) of horizontal producers and
injectors, which are used to identify high permeability
zones and productivity along the production wells; (3)
tracer tracking, which allows for mapping of the
injected water pattern; (4) well logging (spontaneous
potential and resistivity) of the waterflooded zone to
study water bank movement and water breakthrough
time which reduce water injection rate or increase oil
production rate; (5) production logging; (6) drilling
monitor wells; (7) cement evaluation; (8) monitoring
injection wells; and (9) reservoir simulation to
diagnose water breakthrough mechanisms to determine
the cause of breakthroughs which can then steer
towards remediation methods (Zhang et al., 2007; Zhao
et al., 2011; Sierra et al., 2011; Bodnar et al., 1997).
After water injection is started, several parameters
should be monitored to track the performance of
waterflooding process. Oil and water production rates
should continuously be recorded, injection profile tests
should be conducted in the horizontal injection wells,
fracture orientations should be monitored by logs, and
water injection rates should be optimized based on the
parameters mentioned above (Westerrmark et al.,
2005).
To make an economic evaluation of a waterflood
design, it is necessary to estimate fluid injection and
production rates and to make a projection of oil
production or recovery (Willhite, 1986).
3. METHODOLOGY
The aim of this study is to determine the best water
injection scenario, not only operational design is
required, but also the economic aspect. A series of
sensitivity studies are conducted to know the optimum
scenario. The highest net revenue scenario is stated as
the most optimum condition for water injection in X
field.
First thing to do is literature study, which conducted to
understand theories of water injection methods,
horizontal well and low contrast reservoir, what data
are essential, and how to simulate it using a reservoir
model simulation, also how to analyze it using a simple
economic method.
The reservoir model is constructed in CMG. This is
expected to illustrate the reservoir conditions in the X
field. The reservoir model is constructed with
synthesized geometry, grid sizes, and injection pattern
to compromise the purpose of this study. The reservoir
fluid and rock properties are characterized and
generated to the calculation provided by the simulator.
Next, sensitivity studies are done for each technical
parameter for water injection to identify the impact of
an operational injection scenario on oil recovery and
production performance of the reservoir model.
Sensitivity analysis in this study focuses on the water
injection rate.
After reviewing the operational aspects, an economic
analysis will be conducted, it starts with defining the
economic scenario for each case. Afterward, the
construction of the cost estimation for each scenario is
done.
4. CASE STUDY
4.1 General Field Description
The 40 acres pattern in X field is located in South
Sumatra. Beneath this field there is a primary
producing zone called Talang Akar formation. Talang
Akar Formation oil accumulates mainly in the North
and in line on the East side of the basin, with a potential
gas content in the center of the basin. Critical factors of
this play are the presence or effectiveness of the
reservoir (high-quality sandstones are concentrated
along the eastern boundary of the basin near sediment
input, with poor reservoirs containing high volcanic
plastic to the west, and thin sandstones in the middle of
the basin) and sources (lack of parent rock in the the
southwest part limits the spread of play in this
4
direction). The reservoir quality is poor in alluvial
sediments and proximal-distal deltas, with 10-15%
porosity and 1-50 mD permeability hence we can call
this field as a low permeability reservoir.
4.2 Reservoir Model Construction and
Initialization
A reservoir model is constructed with certain field
adapted data to be simulated for 20 years with CMG.
The reservoir model is a single porosity model with 26
x 26 x 11 cartesian grid dimension with a reverse 5-
spot injection pattern. Where the single injection well
(INJ-WELL) is located in the middle and the 4
producing wells (Well-1, Well-2, Well-3 and Well-4)
are located at each corner of the reservoir, respectively.
The static reservoir model can be seen in Figure 8 and
Figure 9.
The reservoir model area is 40 acres with 50 ft
thickness, 2500 psia reservoir pressure, kv/kh = 0.1 and
10% of porosity. The top of the reservoir takes place at
depth 6000ft. The rock-fluid properties are constructed
directly using CMG simulator. The reservoir model is
homogeneous with unified rock and fluids properties.
The relative permeability curves can be seen in Figure
10 and Figure 11.
5. Result and Discussion
5.1 Technical Evaluation
Since water injection can increase the efficiency of
macroscopic sweeping, a sensitivity study is made on
the water injection rate of 0, 500, 1000, 2000, 3000
bbl/d which aim to analyze the increase of Recovery
Factor and the reservoir pressure maintenance. The
water injection is started from the first year of
production, the injection and production well
perforated in depth of 6025ft. The results are shown in
Figure 12, Figure 13 and Figure 14. The oil recovery
factors for water injection rates of 0, 500, 1000, 2000,
3000 bbl/d are 46.03%, 52.76%, 54.88%, 61.12%,
58.01% respectively.
The simulation result shows water injection can
increase the recovery factor of oil. This happens
because water give pressure support or act as a pressure
maintenance to the reservoir. The highest recovery
factor is made by the 2000 bbl/d of water injection.
However the 3000 bbl/d of water injection doesn’t
result a higher recovery factor than the 2000 bbl/d
because the water breakthrough time of the 3000 bbl/d
of water injection rate is faster than the 2000 bbl/d. The
results are shown in Figure 15.
5.2 Economical Evaluation
In this case the author uses Product Sharing Contract Sembiring Meliala for the never ending prayer,
Cost Recovery and Gross Split for the economical affection, and support.
evaluation. PSC Cost Recovery was going to be
3. Ardhi Hakim Lumban Gaol, ST., M.Si., Ph.D., as
compared to Gross Split to see the most profitable
the author’s supervisor who have given never
scenario. Cost Recovery and Gross Split scheme and
ending support, patience, encouragement, and
assumptions are shown in Figure 16 and Table 1,
valuable guidance to the author.
Table 2 and Table 3. The capital and operational
expenditure assumption for this economic calculation 4. Bereans Prayer Group, for always giving me
is listed in Table 4. Economic aspects are being prayer, support, and encouraging me to finish this
reviewed are Net Present Value (NPV), Internal Rate Bachelor Thesis.
of Return (IRR) and Pay Out Time (POT). The result
5. The author’s friends in HMTM
is shown in Table 5 and Table 6.
“PATRA” ITB, for always showing some love,
bringing joy and happiness during author’s study
Based on Table 5 and Table 6, the most profitable process in Petroleum Engineering Department
result is shown by gross split calculation, because all of ITB.
the economic aspects in gross split that the author
wants to compare are better than cost recovery. Hence, 9. REFERENCES
scenario case 3 with gross split calculation will be Bodnar, D. A., Clifford, P. J., Isby, J. S., Lane, A. C.,
chosen to be executed in this project since it gives the Loveland, R., Seymour, L. I., Walz, G. S. 1997. First
best NPV and IRR. The tabulation from the most Horizontal Water Injectors in Prudhoe Bay Field,
profitable scenario will be attached in Appendix A. Alaska. Society of Petroleum Engineers. doi :
10.2118/35588-PA
6. Conclusion
Cordero, F.J., Corpoven, S.A. 1992. Modelling
1. Water flooding significantly improves oil recovery
Horizontal Wells in a Water Drive Reservoir :
by using water to maintain the reservoir pressure Guafita Norte Field, South Western Venezuela.
and provides macroscopic sweeping. Second Latin American Petroleum Engineering
2. Horizontal well is very suitable for low Conference, II LAPEC, Available at:
permeability reservoir where the permeability http://www.onepetro.org/conference-paper/SPE-
anisotropy index (Iani = (kv/kh)0.5) is less than or 23662-MS
equal to 1.. This is shown by the base case D. Zhou, T. Jiang, J. Feng, W. Bian, Y. Liu. 2009.
recovery factor reach a high recovery factor of Research of Water Flooded Performance and
46.03%. Pattern in Horizontal Well With Bottom-Water Drive
3. From case 3 result it can be concluded that the use Reservoir. Petroleum Society’s 5th Canadian
of optimum operational parameters with 2000 International Petroleum Conference (55 th Annual
Technical Meeting). Available at:
bbl/d water injection will generate the most
https://www.onepetro.org/conference-
economic and profitable case. paper/PETSOC-2004-093
Hascakir, B., Pettengell, K., 2017. Horizontal Water
7. RECOMMENDATION
Injection to Sustain Production in a Low Oil Price
To improve this study, some recommendations should
Environment. SPE Annual Technical Conference
be considered:
Exhibition. Available at:
1. Attempt a full-field scale pattern on X field with http://www.onepetro.org/conference-paper/SPE-
whole active layer and injection pattern to grasp 187197-MS
the effect of waterflooding on a real scale.
Holis, Z., Prayogi, A., Purawaman, I., Damayanti, S.,
2. This study will be more accurate if the given data
Nugroho, D., Kamaluddin, M.K. 2016. The
are more detailed. Such as SCAL and RCAL data,
Petrophysic Role of Low Resistivity Pay Zone of
petrophysics data, and recent horizontal well and
Talang Akar Formation, South Sumatra Basin,
waterflooding operational and capital cost data.
Indonesia. SPE Conference Paper. doi:
10.2118/182448-MS
8. ACKNOWLEDGMENT
The author would like to show his acknowledgement Popa, C. G., & Turta, A. T. 2002. Waterflooding by
to: Horizontal Injectors and Producers. Society of
Petroleum Engineers. doi : 10.2118/78989-MS
1. The Almighty God, for always giving me
healthiness and guidance during this process. Raghavan, R., Ozkan, E. 1990. Performance of
Horizontal Wells Subject to Bottomwater Drive. SPE
2. The author’s beloved parents, Israil Sembiring Journal Paper. Available at:
Meliala and Noffy Meliala, Sister, Jisha Bianca
Sembiring Meliala, and Brother, Jadrien Biancliff

5
 https://www.onepetro.org/journal-paper/SPE-
18559-PA
Suta, I. N., Xiaoguang, Lu. 2005. Complex
Stratigraphic and Structural Evolution of Jabung
Sub-basin and its Hydrocarbon Accumulation; Case
Study from Talang Akar Reservoir South Sumatra
Basing, Indonesia. IPTC Conference Paper. doi:
10.2118/10094-MS
Taber, J. J., & Seright, R. S. 1992. Horizontal Injection
and Production Wells for EOR or Waterflooding.
Society of Petroleum Engineers. doi:
10.2118/23952-MS
Westermark, R. V., Dauben, D., Robinowitz, S., &
Weyland, H. V. 2004. Enhanced Oil Recovery with
Horizontal Waterflooding, Osage County,
Oklahoma. Society of Petroleum Engineers. doi:
10.2118/89373-MS
Willhite, G. Paul. Waterflooding. Society of Petroleum
Engineers, 1986.

6
List of Figures

Figure 1. the location and regional tectonic arrangement of the South Sumatra Basin

Figure 2. Regional Geological Structure of the South Sumatra Basin (Artono and Tamtomo, 2000 AAPG Bali)

7
 Figure 3. Division of South Sumatra Sub-Basin (Bishop et al., 2001)

Figure 4. Regional Stratigraphy of South Sumatera Basin (Argakoesoemah & Kamal, 2004)

Figure 5. Daily oil production prediction for different well spacing cases (Zhao et al., 2011)

8
 Figure 6. Eight water injection pattern schemes investigated for the Russkoye field (Zakirov et al., 2012)

Figure 7. The fluid flow direction in horizontal wells (a) opposite flow direction with direct pattern and (b) same
flow directoin with inverted (Popa and Clipea, 1998)

Figure 8. 2-D view of the reservoir model

9
 Figure 9. 3-D view of the reservoir model

Figure 10. Oil-water relative permeability curve

10
 Figure 11. Gas-water relative permeability curve

Figure 12. Comparison of oil recovery factor on different water injection rate

11
 Figure 13. Comparison of Cummulative oil production on different water injection rate

Reservoir Pressure vs Time

3000
Reservoir Pressure (Psia)

2900
2800
2700 0bbl/day
2600 500bbl/day
2500 1000bbl/day
2400
2000bbl/day
2300
2200 3000bblday
0 1000 2000 3000 4000 5000 6000 7000
Time (days)

Figure 14. Comparison of reservoir pressure on different water injection rate

Figure 15. Comparison of water production rate on different water injection rate

12
 Figure 16. Cost Recovery and Gross Split scheme (Peraturan Menteri ESDM No.8/2017 & No.52/2017)

List of Tables

Table 1. Gross Split Percentage

Gross Split
Component Parameter Contractor Split
Field Status: POD I 5.00%
Field Location: Onshore 0.00%
Reservoir Depth (Meter): 2000 0.00%
Infrastructure: New Frontier Onshore 4.00%
Reservoir Type: Sandstone 0.00%
CO2 Content: 0.29% 0.00%
H2S (ppm): 0 0.00%
SG (API): 40.5 0.00%
TKDN: 0.6 3.00%
Production Stage: sekunder 6.00%
18.00%
Oil Price (USD/bbl): 40 11.25%
Gas Price (USD/bbl): - 17.50%
Cumulative Production (MMBOE): 0 10.00%
Oil Gas
Base Split Contractor 43.00% 48.00%
Base Split Government 57.00% 52.00%
Final Split Contractor 72.25% 83.50%
Final Split Government 27.75% 16.50%

13
 Table 2. Cost Recovery Split Percentage

Cost Recovery Oil Gas

FTP 20% 20%
Government Split Before Tax 73.2% 46.4%
Contractor Split Before Tax 26.8% 53.6%

Table 3. PSC Cost Recovery and Gross Split Assumption

General Oil Gas

Price 40 USD/bbl - USD/MMBTU
*Gas Price = 0 because Gas is not being Sold
Operating Cost 10 USD/bbl - USD/MMBTU
GHV 1 MMBTU/MSCF
Depreciation Declining Balance
DMO Vol 25% 0%
DMO Fee 15% 0%
Tax 44%
Discount Rate 10%

Table 4. Capital and Operational Expenditure Assumptions

Horizontal Well Cost $ 1,000.00 /ft depth

Injected Water Price $ 0.50 /bbl/d
Pipeline $ 500,000.00
Pump $ 20,000.00
Water Injection Treatment Plant $ 100,000.00 /1000bbld injection
Surface Facilities $ 1,640,000.00

Table 5. Cost Recovery Calculation Result

Total Investment Contractor NPV @0% Contractor NPV @10% IRR Pay Out Time
Scenarios
(MUSD) (USD) (USD) (%) (years)
Base Case 29,825 5,364 - 233 9.49 2.76
Case 1 : 500bbl/d of water injection 29,965 8,430 1,866 14.02 1.79
Case 2 : 1000bbl/d of water injection 30,065 8,181 2,327 15.43 1.81
Case 3 : 2000bbl/d of water injection 30,265 6,413 1,819 15.62 1.45
Case 4 : 3000bbl/d of water injection 30,465 4,944 785 12.18 1.48

Table 6. Gross Split Calculation Result

Total Investment Contractor NPV @0% Contractor NPV @10% IRR Pay Out Time
Scenarios
(MUSD) (USD) (USD) (%) (years)
Base Case 29,825 17,474 6,104 18.63 2.59
Case 1 : 500bbl/d of water injection 29,965 28,927 12,930 27.32 1.93
Case 2 : 1000bbl/d of water injection 30,065 29,280 16,128 36.14 1.54
Case 3 : 2000bbl/d of water injection 30,265 26,937 18,310 53.66 0.91
Case 4 : 3000bbl/d of water injection 30,465 20,939 14,796 48.14 0.86

14
 Oil Cum. Contractor Government DMO Taxable Cumulative Cum. Cont. Cum. Govt. Payout
Year Produced Oil Oil Revenue DMO Fee Opex Intangible Cost Tangible Cost Total Cost Tax Cont. NCF Govt. NCF
Production Take Take Volume Income Compensation NCF NCF Time
BBL USD MMBOE USD USD BBL USD USD USD USD USD USD USD USD USD USD USD USD Years
2020 - - - - - - - - 23,348,000 6,917,000 25,554,523 (30,265,000) (13,316,600) - (30,265,000) - (30,265,000) - 0.9
2021 2,150,226 86,009,049 2.15 70,742,443 15,266,606 442,140 2,652,842 21,867,262 - - 23,369,904 33,842,412 - 1,574,061 32,268,350 31,873,436 2,003,350 31,873,436 -
2022 1,820,561 72,822,440 3.97 59,896,457 12,925,983 374,353 2,246,117 18,570,610 - - 19,593,909 28,597,850 - 12,583,054 16,014,796 38,237,034 18,018,146 70,110,471 -
2023 382,025 15,280,991 4.35 12,568,615 2,712,376 78,554 471,323 4,185,248 - - 4,882,114 5,712,536 - 2,513,516 3,199,020 7,896,722 21,217,167 78,007,193 -
2024 175,653 7,026,120 4.53 5,778,984 1,247,136 36,119 216,712 2,121,530 - - 2,596,096 2,429,420 - 1,068,945 1,360,475 3,544,115 22,577,642 81,551,308 -
2025 119,215 4,768,580 4.65 3,922,157 846,423 24,513 147,081 1,557,145 1,880,325 1,531,554 - 673,884 857,670 2,353,765 23,435,312 83,905,073 -
2026 94,322 3,772,860 4.74 3,103,177 669,683 19,395 116,369 1,308,215 1,998,138 1,135,537 - 499,636 635,901 1,828,744 24,071,213 85,733,817 -
2027 77,666 3,106,660 4.82 2,555,228 551,432 15,970 95,821 1,141,665 1,141,665 870,577 - 383,054 487,523 1,477,472 24,558,736 87,211,289 -
2028 65,587 2,623,460 4.89 2,157,796 465,664 13,486 80,917 1,020,865 1,020,865 678,399 - 298,496 379,904 1,222,691 24,938,639 88,433,981 -

15
2029 56,698 2,267,920 4.94 1,865,364 402,556 11,659 69,951 931,980 931,980 536,994 - 236,277 300,717 1,035,223 25,239,356 89,469,204 -
2030 49,548 1,981,920 4.99 1,630,129 351,791 10,188 61,130 860,480 860,480 423,247 - 186,229 237,018 884,422 25,476,374 90,353,626 -
2031 43,987 1,759,480 5.04 1,447,172 312,308 9,045 54,269 804,870 804,870 334,778 - 147,302 187,476 767,134 25,663,850 91,120,760 -
2032 39,401 1,576,020 5.07 1,296,276 279,744 8,102 48,610 759,005 759,005 261,813 - 115,198 146,615 670,400 25,810,465 91,791,160 -
2033 35,626 1,425,020 5.11 1,172,079 252,941 7,325 43,953 721,255 721,255 201,757 - 88,773 112,984 590,781 25,923,449 92,381,941 -
2034 32,243 1,289,700 5.14 1,060,778 228,922 6,630 39,779 687,425 687,425 147,938 - 65,093 82,845 519,430 26,006,295 92,901,371 -
2035 29,428 1,177,120 5.17 968,181 208,939 6,051 36,307 659,280 659,280 103,163 - 45,392 57,771 460,069 26,064,066 93,361,439 -
Appendix A. Gross Split Calculation Tabulation for Case 3

2036 26,800 1,072,000 5.20 881,720 190,280 5,511 33,065 633,000 633,000 61,355 - 26,996 34,359 404,641 26,098,424 93,766,081 -
2037 23,365 934,600 5.22 768,709 165,892 4,804 28,827 598,650 598,650 6,708 - 2,951 3,756 332,194 26,102,181 94,098,275 -
2038 20,671 826,820 5.24 680,059 146,761 4,250 25,502 571,705 571,705 (36,158) (15,910) - (36,158) 291,273 26,066,022 94,389,548 -
2039 22,496 899,840 5.27 740,118 159,722 4,626 27,754 589,960 589,960 (7,117) (19,041) - (7,117) 316,997 26,058,906 94,706,544 -
2040 22,768 910,740 5.29 749,084 161,656 4,682 28,091 592,685 592,685 (2,782) (20,265) - (2,782) 320,837 26,056,124 95,027,381 -