Planning and budgeting for 2008 is underway for many companies, and one task that can take a fair amount of effort is setting up your drilling plans. Historically this type of planning has been done in spreadsheets outside the economics programs, and involved a lot of manual work to keep it up-to-date.

Because of its unique approach to planning, WellSpring can help you assemble and optimize your drilling schedule either well-by-well or with a fully parameterized model to automate your drilling program.

The feature article for this newsletter focuses on WellSpring's ability to build drilling plans.

I encourage you to review these features and try the example projects for yourself - we have heard on multiple occasions that WellSpring's drilling automation methods have saved days of work in building and iterating through the planning process.

Sincerely,


Neil Buckley, President of Enersight Corp.

WellSpring's Alberta model now includes the new fiscal terms announced by the government that will take effect in January of 2009.

WellSpring will keep you up-to-date on the latest changes to Alberta's fiscal regime so that you can understand the impact they will have on your business.

The government details for the new royalty framework are available on the Alberta Energy website.

The Network tab in WellSpring is the primary interface for laying out your production networks and provides access to all of the data inputs screens. Now you can quickly review results for any asset in your project without leaving the visual interface of the Network tab.


On the right side of the Network tab is the Right-Click reporting selection. Your full complement of reports is available, including graphical displays such as production declines.
Just select the report you want and right-click on the icon of the asset you want to report against. The report or graph will appear beside the asset and remain until you click somewhere else on the network display area.

Note that the settings for the right-click report are based on the display settings in the Network tab (gross/working interest, monthly/annual) rather than the settings on the Report tab.

The calculation log provides a wealth of information regarding system messages and events that occurred during the calculation of your WellSpring project. When you are trying to understand the results from WellSpring, one of your first steps should be to check the Calc Log.

Here are some of the events that will be registered in the calculation log for each scenario in your project.

• Run-time Settings, such as fiscal model, evaluation date, economic limit settings, down time settings, and base price scenario
• Performance indicators, such as calculation time and time step iterations
• Error messages for errors impacting calculations, such as incomplete fiscal model settings or nodal analysis models without a solution
• Warning messages to make the user aware of potentional sources of error, such as gas compositions above 100% or a discount date that is different from the project start date
• Calculation events, such as economic limits and working interest reversions
• AutoPlan events, such as automatic drilling of wells or expansion of facility capacity

To open the calculation log, click on the triangle icon in the toolbar.

If the Calc Log triangle is red instead of yellow, it means an error occurred in the last calculation run.

Make sure you check the Calc Log to find and eliminate the source of error before analyzing the results of your project.

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News and Announcements

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WellSpring offers many unique capabilities to make you more productive when planning your drilling programs.

WellSpring makes it easier to:

• identify which wells to drill and when to drill
• determine how many rigs to mobilize to complete your drill plan
• incorporate rig availability considerations, such as seasonal closures
• pace a drilling program so as to keep the plant full

WellSpring enhances your ability to manage your drilling schedules, whether it's dragging and dropping wells on a timeline or setting parameters to automate the scheduling of your wells.

This allows very rapid generation of a drilling program, and can make revisions to the plan easy and fast.

The Drilling tab provides detailed scheduling for rigs and wells and can be used to set up automated drilling programs.

You specify when rigs are available, the number of rigs and the day rates for the rig.

You can account for seasonal conditions, such as winter-access or hurricane season, by establishing what periods in the year are eligible for drilling.

You set the order of wells to be drilled, or use a type well as a template for the auto-generated new drills. Rig utilization is based on the number of days for rig movement and drilling time.

From these parameters WellSpring generates a drilling program that matches all the criteria and creates the well assets for the new drills at the appropriate times.

The AutoPlan tab provides methods to automate drilling to keep facilities at capacity, or to expand capacity at a facility to stay ahead of rising production rates.

The Expand Facilities method automates the expansion of a facility's capacity based on capacity utilization triggers.

When production rates exceed capacity utilization triggers, WellSpring will automatically spend capital to expand the capacity of the facility. The expansion parameters define how long the expansion takes, what it costs, and what the incremental capacities will be.

The stepped production graph below shows production flowing through a constrained facility that had two expansions automatically occur as new wells came onstream.

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