Benchmark future inventory and forecast existing well performance
Still relying on acreage math or drawing well locations by hand? Put your pencils down.
Calculating remaining inventory is crucial to assessing the future value of an asset. It can also be time consuming and complex. But it doesn’t have to be.
Valuing assets is important for investors and operators alike, but every shop has their own methodology, their own processes, and no one can validate or scale their approach to calculating inventory.
There are so many important variables to consider that impact a valuation, including, but not limited to, well spacing, completion design, the timing of when they will be brought online, current and forecasted production profiles, and the characteristics of the rock that the wells will be drilled into. So how can this possibly be done quickly without sacrificing technical due diligence?
Introducing a fast, reliable, scalable inventory analysis workflow in PRISM
“We have been trying to value and monitor the undeveloped inventory of our non-op acreage positions. This dataset makes that easy, fast, and up to date.”
-Asset Engineer, Operator
Understand relative risk of future locations with a subsurface model that directly informs inventory in a single platform
An essential first step to valuing the future potential of an asset is to understand the geological risk associated to future well locations. Geological properties can’t be changed, but they can be engineered, so having a view of the subsurface is required to model how the asset could be developed.
Proposed locations are tagged to Enverus geological models that are detailed and rigorously updated. Geological properties, such as porosity, resistivity, water saturation and hydrocarbon pore volume, being tied to the wells allows for fast evaluation of the relative geological risk of future locations, or to easily compare future locations to what has already been drilled. Understanding the geology of future locations can optimize spacing and completion design by matching what has worked best in areas of similar rock quality.
For example, our recent work in the Brazilian pre-salt evaluated the geological risk of planned wells. This risking analysis incorporated structure, salt thickness, basement rock type and CO2 concentration to define an overall relative risk profile for these planned wells. When evaluating assets, this workflow can be used to gauge geological quality of remaining locations and help to develop a tiered and rock quality-based development plan.
Using robust geological models in the Campos and Santos Basins, makes it is possible to assign geological risk to wells in the basin, informing future potential in the play and narrowing potential acquisition targets.
Model forecasted production profiles and run economics in minutes
With an understanding of the quality of the subsurface and associated risk of the asset, you then need to quantify the value of the future locations using decline curves and assume development plans from the engineering factors such as spacing, lateral length and completion intensity.
It is more important than ever to have a scalable and fast way to assess the potential inventory of an opportunity. Operators are being rewarded for access to inventory with the crunch currently facing the market, as high commodity prices have unleashed a torrent of assets into the market as buyers look to capitalize on the current price environment.
For example, in the recently published report analyzing Utica dry gas wells, Enverus analysts found that deeper wells in Marshall County could provide a significant boost to viable locations to operators in the region, who currently get little to no value attributed to the Utica in this region. Analysts first assessed the geological properties of the Point Pleasant in this region versus the core of the play and then, using Enverus Placed Well Analytics, quickly mapped the potential locations of undeveloped acreage. Using the decline profiles from the few producing wells in the area with similar completion and spacing designs with the Enverus forecasting algorithm in just a few clicks generated a 30-year type curve, to assess the EUR, PV-10 breakeven, NPV and IRR of the asset, given different cost scenarios, that translate into extremely economic returns at current commodity prices.
Enverus Well Placement data shows undeveloped acreage in Marshall County. Inventory analysis and well data is readily available through Direct Access.
Prioritizing your time on the right assets by rapidly benchmarking opportunities, determining key drivers of productivity and running economic models should be fast, customizable and provide you with the confidence to de-risk capital investments.
Learn more about how Enverus can help you throughout the asset lifecycle, starting by quickly and accurately screen opportunities by assessing the future upside potential of an asset.
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