Economic Feasibility Study for Resume Oil Operation and Production

This study presents an assessment of the economic feasibility of resuming of oil production in

Tasour & Godah fields of Block 32 Hawarime, Yemen, following a prolonged production shut-in

period of approximately ten years. The study builds upon the technical analysis of reservoir

dynamics during the shut-in period, adding an economic analysis that considers expected costs

and revenues under current conditions.

A cash flow analysis was conducted over a 4-year period, based on a set of defined technical

and economic assumptions, including a constant oil price of $70/barrel, a discount rate of 10%,

initial capital expenditure (CAPEX) for rehabilitation of $9 million, operating expenditure (OPEX)

of $22/barrel, and a production rate starting at 1500 BOPD declining at 15% annually.

The economic results indicate strong project viability under these assumptions:

• Net Present Value (NPV) @ 10%: $67.2 Million USD

• Internal Rate of Return (IRR): 277%

• Discounted Payback Period: 0.35 years (approximately 4.2 months)

These indicators suggest the project is highly profitable and capable of recouping its initial

costs very quickly. However, it must be emphasized that these results depend on the estimated

assumptions used, particularly regarding the production profile and costs, and the analysis did

not account for taxes, royalties, or complex Production Sharing Agreement (PSA) terms due to

the lack of current details. Sensitivity analysis and updating assumptions with more accurate

data, when available, are recommended before making a final investment decision