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.
Tornado diagram. A horizontal bar chart that ranks the project's input variables (oil price, capital cost, initial rate, decline rate, opex, etc.) by the SIZE of their impact on the chosen economic output (typically NPV or IRR), each variable's bar spanning the output value at its low case to its high case, with the widest bar at the top and narrowest at the bottom — giving the chart its tapering, tornado-like shape. It instantly shows which one or two variables actually drive the project's economic risk and which are immaterial, without showing HOW the output responds within each variable's range.
Spider diagram. A single chart with the economic output (e.g., NPV) on the vertical axis and percentage change from the base-case input value on the horizontal axis, with one line drawn per variable showing how the output responds as that variable is flexed up and down around the base case, all lines crossing at the base-case point. Unlike a tornado chart, a spider diagram shows the SHAPE and steepness (slope) of each variable's sensitivity — a steep line means the output is highly sensitive to that variable near the base case, and a curved (non-linear) line reveals threshold or diminishing-return effects a tornado chart cannot show.
