Acquisition Appraisal

Posted by

In this case study, the impact of Serafim FUTURE on the process of evaluating an acquisition target is demonstrated. Serafim FUTURE was used to quickly and effectively assess the reserves, the value of existing producing assets and the value of developing the prospects. Risks and different development scenarios were also taken into account thanks to the versatility of Serafim FUTURE.


Our client, an international oil and gas company with over 120,000bpd production, was interested in acquiring an E&P company with operations in Western Africa. The target firm owned concessions that included producing, undeveloped and prospect fields. The available data consisted of exploration reports and historic production records. The combination of short time-frames and unavailability of relevant data called for using alternatives to detailed simulator models.

The Challenge

The aim of our client was to generate P10, P50 and P90 production forecasts that would be used as input to the economic analysis of the acquisition.

However, the nature of the information available to our client is such that they needed to use a combination of methods and data sources. For instance, decline curve analysis (DCA) could be used to generate forecasts for producing fields while simulator generated “well type” profiles could be used for undeveloped fields.

Moreover, the economic value of an asset is related, on one hand, to the constraints of shared production facilities (such as pipelines, FPSOs, platforms etc.) and on the timing of the development of new projects on the other. Consequently, it was necessary for our client to link the subsurface performance with the characteristics of the surface facilities, rig numbers and well schedules.

The Alternative

Hence, the challenge consisted in achieving the combinations of profiles, carrying out the necessary calculations, generating the three economic reserves categories (P10, P50 and P90) and building several field development scenarios for rig number and well schedule optimisation within the limited allocated time and using an auditable method.

The most widely used tool for such tasks would be a generic spreadsheet programme. However, these have the following limitations:

  • They are error prone, and the bigger the spreadsheet the higher the probability for errors to occur.
  • They are not convenient for managing multiple profiles properly, especially when different scenarios need to be built.
  • It is difficult to apply shared facilities constraints.
  • Optimising and planning rig numbers and well schedules can be very complicated tasks for a spreadsheet.

Our client, who have taken the lead in the use and further development of Serafim FUTURE, have integrated the use of Future in their business process and as a result were aware of the benefits it can yield in such situations.


The leading Reservoir Engineer started by creating a surface network that honours the actual and potential future configurations.

A full field model can be created quickly either using the user interface, updating the database or linking to the software programatically.

Facilities constraints at the network nodes were modelled and applied.

For each category of reserves (P10, P50 and P90) a model of the reservoirs was created and wells assigned to each reservoir.

For producing fields, historic production data was imported and interactive decline curve analysis was carried out (within Serafim FUTURE) generating future production profiles. Forecasting of associated gas production used the free-gas:liquid ratio method.
Where undeveloped fields are included, “type well” production profiles, generated using reservoir simulation sector models, were imported and assigned to the appropriate wells and reservoirs. One type well was generated for each category of reserves. Prospects were modelled using a similar “type well” approach.


Rig numbers and well schedules were modelled by specifying a number of work sequences (timings of wells coming into production). For each category of reserves and work sequence a production optimisation (a run in Future terms) was run.

The results

Thanks to the flexibility of the software and the fast run times, it was possible to copy and change run settings to generate profiles for different surface facilities and work sequences. It was also possible to compare the profiles graphically in order to assess the impact of the changes..

As a result, P10, P50 and P90 production profiles were generated with different rig schedule, facility capacity and pipeline timing.

Results were reported per field and for the whole project.

The use of Serafim FUTURE allowed our client to quickly assess the potential of the acquisition and proceed with it. Shortly after the purchase, a large drilling programme was commissioned, boosting our client’s portfolio substantially.

Our client’s perception

  • Future gives the chance to combine surface networks with field performance.
  • It offers great flexibility for reporting.
  • Fast run times, which give the possibility to analyse several different scenarios in order to analyse optimum conditions.
  • It is an easy tool to use, it offers the ability the right degree of details the user wants (field, manifold, well or completion levels).
  • Future offers the flexibility to combine inputs from Excel files, simulator runs, built in DCA etc. to build forecasts.

Click here to learn how Future can help you with evaluating deals quickly and effectively especially when you lack subsurface data on the target.

Auditable Reserves Reference Database

Posted by

This case study demonstrates how Serafim FUTURE can add substantial value to your reserves management and audit workflows through the successful experience of one of our clients.


A fast growing oil and gas company, with international operations, required a more secure and manageable reserves forecasting and auditing process. The aim was to allow the company’s executives to quickly identify and approve reference forecasts that would be used for reporting, planning and control purposes.

The Challenge

As a fast growing company, the number of assets, asset teams and reservoir engineers boomed in recent years. Production and number of wells also grew rapidly making it harder to track and store reference production forecasts used for calculating the reported economic reserves.

Define a clear workflow and trace how your forecasts were generated.

Moreover, the variety of assets entailed the use of a range of forecasting methods from reservoir simulations to decline curves analyses. The auditing and aggregation of numerous production profiles generated by different means and stored in disparate locations under different formats made it even trickier to build the big picture and to control the process.

Executives at the client firm realised that improvements to their formal reserves calculations would certainly lead to improvements of their bottom line results.

Managing production profiles

Managing production profiles effectively and quickly is a source of competitive advantage for the producing firm. Effectiveness is created by the ability to combine, shift and change numerous production profiles for a large number of entities accurately, timely, securely and using the relevant inputs.

At any stage of the process, engineers need to have a good knowledge of the manipulations and calculations occurring and avoid unforeseen errors.

Spreadsheets, the usual tool utilised to carry out such tasks, fail to provide almost all of the requirements listed above.

Moreover, storage, security and workflow modelling are not supported by a simple spreadsheet model even though each one of them is important to the performance and profile of the firm

The solution

Our client, who have taken the lead in the use and development of Serafim FUTURE, have integrated the use of Future in their business process and as a result were aware of the benefits it can yield in such situations.

Future, both the database utility and the software front end, provide a robust answer to the business challenge that our client faced.◊

Serafim FUTURE

  • provides decline curve analysis for producing wells, including the innovative C-curve method
  • allows gas production forecasting by decline curve, material balance or, for associated gas, by the free-gas:liquid ratio method
  • imports the results of reservoir simulation or external material balance models
  • allows one to work with a range (e.g. high, medium and low cases) of production profiles for each asset.
  • aggregates well forecasts to field and platform level, applying, if necessary, production
  • constraints, without the errors that so often creep into spreadsheets
  • rapidly updates profiles with the results of changes in well start-up dates and drilling sequences
  • stores all inputs and settings, so these can be audited
  • produces reports listing differences in inputs and settings between two cases

Our clients say that Future saves two weeks of work per engineer and per reserves update exercise.

Future allowed the technical generation of the forecasts to be integrated into a standardised workflow, and provided tools for management of the workflow. Read and write permissions were specified per run. Forecasts were created, updated, approved and frozen so that no further changes were possible. Serafim Ltd is currently helping this client to create an even more versatile administrator control system that will allow the permissions and approvals to be specified at several layers - concession/asset/ field etc.

Even though our client set up a corporate Future database on MS SQL Server, the software still allows a great deal of flexibility for users:

  • Personal local databases that is directly accessible via either Future software or utilities such as MS Access.
  • Results and models from one database can be copied to the other.
  • Reference approved or frozen forecasts can be used as the basis for new forecasts – such as for the next reserves cycle.
  • Future is equipped with utilities that allows direct communication with databases, such as Schlumberger OFM (production and well test information) and VOLTS (reserves reporting).


Our client reckons that the use of Serafim FUTURE allowed them to save two weeks of every engineer’s time per year just when using it throughout the reserves reporting exercise. The benefits of workflow management, security and reliability of data have been widely noticed, especially during official audits.

Click here to learn more how we can help you save time, ensure consistency and achieve reliability with you reserves management/audit workflows.