The Life Cycle of an Unconventional Gas Opportunity: Quantifying Risk Versus Reward
Melvyn Giles1, Marcel M. deJong1, Daniel Nevin*2, P. Jeffrey Brown2
1Shell International E&P, Incorporated; 2Decision Strategies, Inc, *Speaker
The early phases of exploitation of an Unconventional Gas opportunity differ significantly from that for a conventional play. Typically, the phases that precede full scale development are:
- Exploration, to test the play concept and gain early insights into play extent
- Appraisal, to establish existence of sufficient overall volumetric scope and to get early indications of per-well recovery and optimal completion practices
- Pilot – determine if consistent economic per-well yields can be achieved.
This talk will discuss a probabilistic, decision-focused methodology that can be used to:
- determine appropriate volume/rate thresholds for each phase
- estimate the probability of exit at each decision gate (along with the risked capital exposure up to that point),
- calculate the chance of proceeding post-pilot as well as the chance of a full project, full cycle economic return, and the minimum average yield needed to assure an economic venture, and
- gain insights into optimal pilot size.
AAPG Search and Discovery Article #90098©2009 AAPG Education Department, Houston, Texas 9-11 September 2009