Effective
Economic Modeling and Portfolio Selection of Unconventional Resource Plays via
Statistical Type Wells
Gouveia, Jim1, Mark
McLane2, Gary Citron3 (1) Rose & Associates, Calgary,
AB (2) Rose & Associates, Midland, TX (3) Rose & Associates, LLP,
Houston, TX
Many firms are pursuing Unconventional
Resource plays worldwide as a low risk vehicle for growth. Unfortunately, not
all active resource plays have met the expectations of this low risk model.
Pick the wrong play and no matter how flawlessly you execute, you will provide limited
returns. Select the right Unconventional Resource play and you will have happy
shareholders.
Some plays are very price dependent while
others are both price and technology dependent. We provide a brief overview of
the North American industry's use of statistically-based production curve types
to assess potential ventures. We then focus on an alternative methodology for
the selection of future Unconventional Resource plays critical to the long-term
success of many companies. The methodology is similar to, yet unique from
traditional basin analysis and features:
(1) Definition of materiality relative
your company; (2) Type wells to generate EURs,
production profiles, costs and land requirements to meet materiality; and (3)
Use of pilot programs to represent segments of the play and sequence
investments.
Consistent and systematic adoption of
this methodology should greatly enhance the selection of future profitable
Unconventional Resource plays.
AAPG Search and Discover Article #90063©2007 AAPG Annual Convention, Long Beach, California