The tips that every E&P company need if they want to maximize their asset value at all lifecycle stages.

November 6, 2020 by

VERDAZO 2020 Blog 1 – In the beginning; there was acquisition and play assessment.  

The following blog series illustrates how VERDAZO can be used for the nose to tail analytics journey aimed to maximize value, optimize costs and drive operational efficiencies. VERDAZO can provide the confidence to drive informed decisions and focus on areas that will have a material impact on the balance sheet. We begin with a brief discussion regarding acquisition and play assessment.

The Western Canadian Sedimentary Basin contains some of the most prolific and potentially profitable oil and gas resources in the world. The trick is to unlock these assets economically, safely and efficiently.

This journey often begins with an acquisition target, assessment of it’s potential and a highly informed speedy determination on how to proceed. Determining the potential of an acquisition can be a daunting task given the wealth of available data, thus the need to leverage discovery analytics.  Discovery analytics is a sequence of explorations, each predicated on the discovery and insight of the last.

Figure 1: Shapefile identifying extent of Montney Resource Play. Wells shown represent horizontal Montney producers by primary product

Caution! The following is an illustration of an analytics workflow, not a fully vetted opportunity.

Need for Speed – Initial Assessment: In the competitive market of discounted acquisition targets, it is important to quickly run a preliminary screening of profitability potential and acquisition feasibility. Quickly ruling out those opportunities that don’t fit your organizations objectives allows you to take extra time investing in more rigorous analysis for those opportunities with the greatest potential. Emphasis could be on assets that are complimentary to your core asset base, infrastructure, operational strengths and organizational directive.

Figure 2: Landsale shapefile can help quickly determine location of upcoming opportunities and proximity to existing assets/infrastructure. Shapefiles functionality now available in VERDAZO 2020.

TIPS

  • Add shapefiles for your current land holdings and overlay new land postings to investigate points of possible intersection.
  • Use the hover functionality for key information included with the shapefile to quickly identify rights and expiry dates.
  • Collaborate with your colleagues through a series of visual narratives.
  • Include commentary and notes.
  • Immediately dive into a curated performance analysis workflow of the target.
Figure 3: EUR Oil (bbl) distribution of Wells. Binned By Quartile for quick insights. Map illustrating interactive lasso data selection available in VERDAZO 2020.

 

Figure 4: Auto-forcasting can get you a quick unbiased estimate of EUR in a matter of seconds. Identify and prioritize trends and opportunities. Image illustrates Quartile Binning and shows sticks for horizontal wells available in VERDAZO 2020.

 

TIPS:

  • Bin EUR by quartile for some speedy insights into pockets of highest and lowest EUR recoverable.
  • Interrogate the data.
  • Is it geology or completion technology driving performance here?

Importance of geologySee Blog on Augmenting Well Production Analysis with Subsurface Data

More on Auto-ForecastingType-curves Part 8: EUR, Value, Uncertainty & Auto-forecasts

If we don’t learn from (completion) history, we are doomed to repeat it: A great benefit of using recent completion data is that you can leverage the successes and failures that precede it. Use multiple measures of performance within VERDAZO to drive a more comprehensive understanding of “Best” and be sure it aligns with your organization’s objectives.

Completion Analysis Considerations for Reserve Evaluations

Frac Analysis in VERDAZO: How to Refine Your Insights Using Distributions

How much meat is left on the bone? Of course we aren’t evaluating meat products, but determining the value of the remaining recoverable on an existing asset.

TIPS:

  • Use the auto-forecasting routine to compare estimated time to EUR Half Life.

This can be a great tool to identify how quickly you need to payout capital costs to make these assets profitable. Often big IP’s and peak rates are associated with aggressive decline profiles, an important consideration if you are acquiring partially depleted assets.

Figure 5: Auto-forcasting with % EUR Produced can highlight a wells EUR Half Life.

 

TIPS:

  • Reference lines can provide a great comparison of distinct samples:
    • Wells with an on-production date of 2010 show an EUR half-life = 25 months.
    • Average for all vintages in the sample = 29 months.
    • Newer vintage on production date 2019 EUR half-life = 39 months.
      • How much remaining value do partially depleted assets have? ie: “meat on the bone”

If the reality TV of DIY house flipping has taught me anything…  it’s that there is never much profit to be had when buying the nicest house on the block.

How does this pertain to an acquisition target? Verdazo has a series of charts and workflows in public data focused on Capability and Lost Production analysis. This information can do more than identify your own opportunities for operational improvement by limiting unnecessary downtime. It can also identify assets that are struggling with operational efficiencies. If your organization is one that has tremendous track record of operational strength, then perhaps what you need is a fixer-upper….

Figure 6: Lost Production % vs Lost Production BOE/day can highlight and show patterns of well groupings with material lost production. This could be the result of operational inefficiencies.

 

Figure 8: Estimated Lost Production revenue can help quantify the size of the potential prize for operational improvements in the field. Revenue calculated by Variable Parameter entry for sales price of products.

 

VERDAZO allows for speedy and informed decisions. The examples provided in this blog are only an example of workflows and analysis methods aimed to drive confidence in decisions, collaboration between technical professionals and transparency through data governance. The depth and breadth of data available requires a versatile tool with imbedded industry expertise to drive better decisions quickly.

 

Related blogs/knowledge articles of interest:

 

Acknowledgements: Thank you to IHS Markit for the well, production, completion and shapefile data used in the analysis presented throughout this blog.

Contact sales@verdazo.com for information on the newest release, best practices and data integration opportunities.

By Lucas Ford, Sr. Business Intelligence Analyst – Verdazo Analytics