Bertrand, Author at VERDAZO

December 7, 2015 by Bertrand

Type Curves Part 3: Normalization

Editor’s Note: While VISAGE rebranded to VERDAZO in April 2016, we haven’t changed the VISAGE name in our previous blog posts. We’re proud of our decade of work as VISAGE and that lives on within these blogs. Enjoy. Normalization of data is a means to improve the comparability of wells or groups of wells. Today’s blog will cover three types of normalization: 1) Time Normalization: alignment of time periods (months) relative to a date or event 2) Dimensional Normalization: scaling production values relative to a well design parameter 3) Fractional Normalization: scaling production values relative to the peak rate Each approach serves a distinct purpose and together they can be used to build an informative narrative. 1) Time Normalization There are two common dates used to align time, “First Production Date” and “Peak Rate Date”. Each has its own strengths and weaknesses. First Production Time Normalization Strength: on larger well sets, this communicates the average production profile taking into account variability in time to peak. This is suitable for some comparisons (e.g. operator, vintage). Weakness: the resulting type-well curve may not accurately reflect production decline behavior (as shown in the example below). Peak Rate Date Time Normalization Strength: the type-well...

November 23, 2015 by Bertrand

Type Curves Part 2: Analogue Selection

Editor’s Note: While VISAGE rebranded to VERDAZO in April 2016, we haven’t changed the VISAGE name in our previous blog posts. We’re proud of our decade of work as VISAGE and that lives on within these blogs. Enjoy. The first step in developing your Type Curve is the selection of your analogue wells. Analogue wells should have a similarity on which a comparison may be based and should represent the range of possible outcomes (i.e. don’t just select the best wells). However, by selecting wells with similar characteristics you can reduce the range of uncertainty in your type-well curve. The more common well attribute categories that are considered when selecting analogue wells include: Geology Reservoir Well Design Well Density Operational Design Here are some insights and perspectives on these well attribute categories that should shed some light on the importance of a thoughtful analogue well selection process. Tools like VISAGE can help make this process much faster and easier. Geology and Reservoir While there is data from public data vendors that can contribute to your geological and reservoir understanding, it is largely going to come from studies and the knowledge base built by your internal geologists and geophysicists. Use of maps...

November 16, 2015 by Bertrand

Type Curves Part 1: Definitions and Chart Types

Editor’s Note: While VISAGE rebranded to VERDAZO in April 2016, we haven’t changed the VISAGE name in our previous blog posts. We’re proud of our decade of work as VISAGE and that lives on within these blogs. Enjoy. Type Curves or type-well curves are a foundation of reserves evaluations, development planning, production performance comparisons and completion optimization analysis. The dangers of not understanding the complexities of Type Curves, and failing to communicate how they were designed/developed, can result in large statistical variability, inconsistent information used in development decisions, and unattainable economic plans (especially in the unforgiving times of low commodity prices). This blog series will focus on essential Type Curve considerations and analytic techniques that should be part of their development and use. The complete contents of this multi-week blog series will be presented at the upcoming SPE talk Understanding Type Curve Complexities & Analytic Techniques on Dec. 1st, 2015. Please join us. There are many ways to build Type Curves and they can yield significantly different results. In the example below, the left image shows six versions of a Type Curve for the same data set. The right image shows how different the cumulative revenues are for the first...

June 15, 2015 by Bertrand

How useful are IP30, IP60, IP90 … initial production measures?

Editor’s Note: While VISAGE rebranded to VERDAZO in April 2016, we haven’t changed the VISAGE name in our previous blog posts. We’re proud of our decade of work as VISAGE and that lives on within these blogs. Enjoy. The presence of IP30, IP60, IP90 … has increased in recent years. Is this a trend that has evidence to support its growing use? … or is this a trend that should be accompanied with appropriate caution? Let’s find out! To truly answer this question we need to establish a context for our assessment. This includes: Understanding each production measures’ strengths and weaknesses (we covered this in last week’s blog “What production measure should I use?”) Comparing IP values against other production measures Use “correlation to EUR” as our “measure of usefulness” (from a reserves perspective) Another “measure of usefulness” that we can explore in a future blog is the IP correlation to 60 month cumulative production. This is the biggest money making period for horizontal wells and where payout takes place. Some preliminary analysis suggests that the correlations would be dramatically higher than they are to EUR. But let’s get back to today’s focus… we’ll start with the conclusions, then cover...

June 8, 2015 by Bertrand

What production performance measure should I use?

Editor’s Note: While VISAGE rebranded to VERDAZO in April 2016, we haven’t changed the VISAGE name in our previous blog posts. We’re proud of our decade of work as VISAGE and that lives on within these blogs. Enjoy. Measuring and comparing well production performance is the foundation of production analysis in the oil and gas industry. The challenge is deciding what production performance measure to use and understanding their strengths and weaknesses. To illustrate this, take a look at the following charts which compare the average production profiles of Open Hole completions to Cased completions in a Montney study area. Three different production measures will yield three different conclusions: using Peak Rate, I would conclude that Open is dramatically better than Cased using Cumulative Production after 36 months, I would conclude that Open and Cased are about the same using EUR, I would conclude that Cased is better than Open Why measure production performance? Measure performance against an expectation or plan Compare wells, plays, companies, technologies …. to one another Gain insights into optimal performance design (e.g. proppant loading, frac spacing, horizontal direction …) Use as a proxy for EUR (I’ll cover this in detail in my next blog with a comprehensive correlation analysis on four...

April 25, 2015 by Bertrand

Oil Sands Production Will Attenuate Impact of Reduced Drilling

Editor’s Note: While VISAGE rebranded to VERDAZO in April 2016, we haven’t changed the VISAGE name in our previous blog posts. We’re proud of our decade of work as VISAGE and that lives on within these blogs. Enjoy. The enjoyable part of writing a blog with a discovery analytics tool like VISAGE is that a simple look into an area of interest quickly unravels into a detailed investigation with many unanticipated insights. My plan to review in-situ oil sands production with a couple of charts turned into a comprehensive story told with 7 charts and 1 map. By the end of this blog you will, hopefully, have a new perspective on the oil sands and the positive impact it will have on the near term Canadian oil production decline. Oil Sands Dominate Oil Production in Canada In February of 2014 oil sands first dominated all other oil production in the Western Canadian Sedimentary Basin (WCSB). As of February 2015 it now makes up 54% of all WCSB oil production (excluding oil sands mining related production). As the chart below shows, production growth in the oil sands has been at a consistent high since 2010. Relative to all the other wells that have ever produced any oil (shown in the...

April 13, 2015 by Bertrand

IWCP Non-compliant Wells Will Cost More Than $320 Million

Editor’s Note: While VISAGE rebranded to VERDAZO in April 2016, we haven’t changed the VISAGE name in our previous blog posts. We’re proud of our decade of work as VISAGE and that lives on within these blogs. Enjoy. The IWCP (Inactive Well Compliance Program) came into effect on April 1st with little fanfare. This is not surprising given the spending cuts companies have been announcing in the current price environment. The anticipated cost of addressing the 32,788 IWCP non-compliant wells over the next five years will be in excess of $320 million. This is an extremely important liability consideration for anyone doing acquisitions in the near future. As of April 1st there are ten licensees with more than 500 non-compliant inactive wells, of those 4 have more than 1000 non-compliant wells. The Provost, Pembina and Cold Lake fields all have more than 1000 non-compliant wells (shown in the chart below), and collectively represent 14% of all of Alberta’s non-compliant wells. The remainder of this blog provides a map of all of Alberta’s non-compliant wells and details about risk levels. About the IWCP The Alberta Energy Regulator (AER) introduced the IWCP to address the growing inventory of inactive wells. The objective of this...

March 23, 2015 by Bertrand

Drilling Activity & Production Forecast for 2015

Editor’s Note: While VISAGE rebranded to VERDAZO in April 2016, we haven’t changed the VISAGE name in our previous blog posts. We’re proud of our decade of work as VISAGE and that lives on within these blogs. Enjoy. If someone asked you to predict what the Western Canadian 2015 year-end production and drilling numbers would be, and gave you 1 hour to do it … could you? Well that’s exactly what happened to me last week and I was up for the challenge using VISAGE. Skip to the end of this blog for the Low and High Scenario results. My approach had to be simple for it to be accomplished in an hour. It all hinged on getting the Drilling Activity numbers figured out first. It turns out that since 2006, the Drilling Activity up to the end of February has consistently been around 31% of the year-end total. With that as a starting point, I created this chart show the 2015 drilling activity forecast relative to the last 9 years. Notice the dramatic step change after 2008. This is attributable to a stronger emphasis on horizontal drilling and a reaction to the price drop experienced in 2008 ( go...

March 2, 2015 by Bertrand

Time to rethink the mcf to BOE conversion factor?

Is it time to rethink the 6:1 mcf to BOE conversion factor?

February 23, 2015 by Bertrand

Completion Analysis Considerations for Reserve Evaluations

Editor’s Note: While VISAGE rebranded to VERDAZO in April 2016, we haven’t changed the VISAGE name in our previous blog posts. We’re proud of our decade of work as VISAGE and that lives on within these blogs. Enjoy. As completion designs and technologies change over time it is increasingly difficult to analyze and quantify the impact that completions have on production and value. As a simple illustration, we can see in the Montney how some key completion parameters have changed over time and the impact they have had on initial gas production rates. We can also see that there has been a shift in the dominant technologies year over year. Not understanding the impact that completions have on production could result in a valuation that is not optimized. The challenges of quantifying and communicating the production impacts of completion design parameters can be addressed if you understand them, use a variety of analysis techniques and have the tools to quickly perform those analyses. Check out the SPEE presentation I did last week to learn more about “Completion Analysis Considerations & Techniques for Reserve Evaluations“. ___________________________________________________________ Frac Data provided by: Well Completions and Frac Database from Canadian Discovery Thanks for reading. I welcome your questions...

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