Sarah TamilarasanCarrizo Oil & Gas

Maximizing Profits Through Facilities

Analyzing Methods For Optimizing Integration Between Production & Facilities To Design Facilities Capable Of Handling Different Drilling Schedules & Artificial Lift Strategies Whilst Maximizing Profitability

Why is it important?

BOPD of Shale wells

Drill schedules, acreage position

Sustain economics oil prices < $80/bbl

How can we do this?

Execute Cost /

Schedule driven

Facilities

Target 99% uptime

Facilities driven by Acreage, Drill/Frac

strategy, IP rates

Facilities driven by Acreage, Drill/Frac strategy, IP rates

Acreage position/Lease Obligations

Facility 12,000 bbls/day

Drill over 3-5 years. 100+ wells

10,600 acres

470 acres

Facility 2,500 bbls/day

Drill over 2 years. 8 wells

Drill/Frac Schedule

• Typically 1-3 wells, Max 2000 bbls/day• Consider adding trains based on

frequency of rig

Lease holding or Pilot wells

• Depends on size of acreage, typically 5,000-10,000 bbls/day

• Acreage position might not be continuous

Acreage development

• Facility size should be driven by IP rates• IP rates for 2, 3 or 8 wells vary

considerably. 1000-4000 bbls/day

Wells on a pad?

Operator Friendly Facilities

• Can it be supported by the Operations team efficiently?

• Have equipment that might be bypassed?

Engineering Design

• Easy to trouble shoot and diagnose operational issues. Get buy in from Operations during design phase

Trouble shoot

• Example: Consider (2) 48” separators to process 4000 bbls/day vs (4) 36” separators

• Example: Dual dumps, 2” vs 3” dumps

Maximize Utility

0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.05000

OilOil2

Month

Barr

els o

f oil

per M

onth

Undersized FacilityLoss of approx. $180,000 per Facility

• Undersized facilities curtail production, retention time

• Oversized – increases possibility of gas entering tanks

FacilitiesUndersized?Oversized?

Advantages of 25% additional capacity

•Well produce at rates higher than expected

Well Production exceeds

projections

•Accommodates slug flow•Slugs level out with the dual separatorsWell flow

•With Production declines, additional wells can be accommodated with existing facilities

Accommodates changes in

drilling/completions

System Pressure Management

100-120 psi

4-8 oz

70-80 psi>100 psi

55-60 psi

Execute Cost/Schedule driven Facilities

Company A Carrizo Company B0

500000

1000000

1500000

2000000

2500000

3000000

3500000

ConstructionMaterialsDesign

Spent 50% < Company A

Get an advantage on cost

Buy in from onsite team, vendors • Materials 30%

lower than industry

Research/Implement cost effective design • Wireless I&E 150k

vs. 700k savings over 78%

Increase productivity• Construction –

600k vs 2M-3M, 80% savings

Tips to control Costs/Schedule

Forecast materials 6-10 months in advance

Minimize/eliminate changes in the field by combining design/Hazop reviews. Rework can lead up to additional 2M in labor

Practice SIMOPS - i.e. Flow lines/Facilities in place prior to Frac

ROW requests to Land 45-60 days in advance

Target 99% uptime

Reduce Downtime

•Production declines, compressors might need to be downsized to keep wells online•Consider routing additional wells to existing facilities to maintain retention time

Evaluate Facilities 3-6

months

•Periodic pigging will keep the flow lines/gas line in operation•Build in redundancy•Scheduled testing pnuematic systems, I&E equipment

Implement Maintenance

program

•Get feedback from field operations•Make required design changes to resolve reoccurring operational issues•Roll out custom solutions

Prioritize Operational

issues

Questions?