24-Pet-B3 Petroleum Geology · May 2016
Nivaar worked solution (AI-drafted; not reviewed by a licensed engineer)
National Exams, May 2016 — 98-Pet-B3, Oil and Gas Evaluation and Economics (3 hours, closed book, approved non-programmable calculator only). The exam's own cover page is titled "Oil and Gas Evaluation and Economics" and every question is property valuation / reserves & production economics / DCF-NPV screening content — no geology anywhere.
Reference texts: Thompson & Wright, Oil Property Evaluation; Canadian Oil and Gas Evaluation Handbook (COGEH), Vol. 1 (Society of Petroleum Evaluation Engineers, Calgary Chapter); National Instrument 51-101, Standards of Disclosure for Oil and Gas Activities (Canadian Securities Administrators); SPE/WPC/AAPG/SPEE Petroleum Resources Management System (PRMS); Economides & Nolte, Reservoir Stimulation; Ahmed, Reservoir Engineering Handbook.
The exam's own instructions ask for only 7 of the 10 short-answer questions and note the Cash-Flow/Future-Value tables are graded by column; for "choose N of M" exams, every item below is answered in full as a study resource. Questions 1–10 correspond to the exam's printed Short-Answer items 1–10; Questions 11–20 correspond to the printed Multiple-Choice items 1–10; Question 21 is the Future Value table; Question 22 is the Cash Flow table.
Question text not reproduced: the examination questions are © Engineers and Geoscientists BC. Open the official past paper (linked at the top of this page) to read the question, then follow the worked solution below.
The two countries most affected by freehold (privately-owned) mineral rights are the United States and Canada. In most of the rest of the world, subsurface mineral rights belong to the state (Crown or national government) by default, so freehold leasing is a comparatively minor category elsewhere.
The two differ substantially in how common freehold ownership is. In the United States, freehold (fee-simple) mineral ownership is the norm on privately-held land — the surface owner usually also owns the minerals below (unless previously severed), so an operator leasing a play must typically negotiate leases with many individual private mineral owners, and mineral title can be fragmented across dozens of heirs on a single section. In Canada, the Crown (provincial government) retains the great majority of mineral rights; freehold mineral title exists mainly in older-settled parts of Alberta and Saskatchewan that trace back to 19th-century railway and colonization land grants (e.g., CPR and Hudson's Bay Company grants), so most Canadian leasing is Crown land leased through provincial competitive land-sale auctions rather than freehold negotiation with private owners.
