Indonesia due diligence

Overview

An ASX listed company asked RISC to conduct technical due diligence on a producing gas field acquisition opportunity offshore Indonesia.

Challenge

Field production had started 18 months previously and design rates had been achieved. The seller’s view of reserves was based on pre-production estimates.
Close inspection of flowing downhole gauge data however indicated that the amount of gas drained might be significantly smaller.

Approach

RISC’s technical team

• Audited the seller’s reservoir simulation model, which identified several flaws
• Updated the history match of the reservoir simulation model to include latest data
• Predicted the likely range of project outcomes, resulting in a 2P reserves << sellers and their reserves auditor
• Presented the results to the Seller – who broadly agreed.

Outcome

RISC’s predictions were validated by actual field performance as the field was shut-in two years later, after only four years production.

RISC’s advice enabled the ASX company to make decisions with confidence and avoid a poor investment opportunity.

RISC’s services were retained by the seller to audit year end reserves.