Type Curves Affect Oil and Gas Deals

Type Curves Affect Oil and Gas Deals

Oil & Gas Type Curves

Oil and gas type curves are developed to project the future production of both producing and upside wells. This is essential to determine the value of mineral rights acreage. The PetroValues team spoke with our clients, and many of them expressed the importance of being confident in projections. We couldnā€™t agree more.

Forecast-Tool
Watch Craig’s tutorial below!

Forecast Editing Tool

With our new forecast editing tool, subscribers now have access to PetroValues type curves and forecasts. Our team of industry professionals have decades of experience, and develop our type curves through manual geological and reservoir work.

We also recognize that many clients would like to use their own in-house data in the economic valuation. So we included customization features within the tool. Subscribers can change forecasts for individual wells, or set custom type curves to an area for future development.

Register for Free

Watch the video, and see President of PetroValues, Craig Kaiser, demonstrate the new features.

Edit Forecast Module Video

Learn More

Mineral Rights Valuations

PetroValues uses this tool among many other machine-learning, algorithms, and analytics to formulate the most accurate valuations. If you’re a mineral owner, and you’re interested, please don’t hesitate to reach out. We talk to mineral owners everyday and would love to give you a free consultation as well.

 

Contact Us

 

*Follow along in the transcript.

Transcript

Intro to Mapping Features

[00:00:03] Hey guys this is Craig with PetroValues. I Just want to tell you guys about a new update, that we have just pushed to the website. It’s a new module called the Edit Forecast Module. Several clients have requested this tool, and I think it’s going to create a lot of interest. What it essentially does- for all the wells in the database, you can see a graph of the historic discrete production points, and you can see the calculated PetroValues forecast out front. This allows you to go and see individual well EURS (estimated ultimate recovery). Not only see those, but it allows you to change those parameters if you’d like. You can increase or decrease oil production, gas production, or water production. It’ll kick out your net remaining reserves. What is left in the solid line, going forward into the future, based on your NRI’s.

 

Check out our Map

 

[00:01:00] So just to remind everyone, how to get started in PetroValues. First of all, it’s a completely free website for viewing data purposes, at this point. Go to PetroValues.com. If you’ve been to the website before and you’re registered, you’re going to see your registration there, if not, it’s free to register. When you first come to the map, it’ll bring you to a very high level map that shows all the wells in the database. This includes producing wells, permitted wells, abandon wells etc. We have all kinds of filters where you can come and filter on formations, operators, production, etc but we have other videos for that. What we’re going to focus on today is this new model to edit forecasts. I’m going to clean the map up quickly, and I’m going to turn on just my horizontal wells. I’ll turn off upside wells, we’ll get to those again later. I’m just going to zoom in to a previous portfolio that I had made before. How to do portfolios- you just click on a well, or a series of wells, and you click the save button. But that’s going to zoom me into this well, in Denver basin. It’s a Noble Energy well. I can see the well information, here on the left side panel. I can see the well label, the location, reserves category, all of those things. If you are a subscription holder, you can select as many wells, or acres, as your browser will handle. I think I’ve got my browser up to 13,000 coalbed methane wells, up in Powder River Basin, before my browser crashed. But if you’re not a subscription holder, then I think your maximum is 4,000 gross acres. But this is all free right now (It’s just one single well). So you click a well. It’s going to show me the the formation there. I can come down here to the production tab, and this is going to show me all the historic production. Here’s your cumulative historic production there, first production date, last production date, last reported production date (at the state regulatory agency). And here is this new module.

 

Register for Free

 

Edit Forecast Module

[00:03:19] You click on the Economic Inputs tab. And when you’re running valuations, this is where all of your economic input variables are located. So I’m going to go over here, to the top right, and I’m just going to expand this guy, so you can see. There’s the API. Here’s our well. You can see what basin we’re in. You can see what formation, well category, the type curve area that it’s in, etc. What’s really cool, we think, here is this Edit Forecasts tool. I see all of the historic production, and then the solid line is the PetroValues forecast going forward into the future.

[00:03:56] And here’s what I can do. I’m already predicting 80 percent of the type curve. I’ve gone through here, and kind of messed with this a little bit, but I’m going to go ahead and say that I think the well is going to produce 20% more than the type curve. The type curve is based off of nearby producing wells that fall within the same geologic characteristics of this well. I’m going to say that this well, due to some reason, is going to produce 20% more than the type curve. I type that in there, and you can see that the total gross EUR has changed. You can see, over here on the right, that the forecast has gone up. I can say that I think something radically bad is going to happen to this well, and I can type in 50, and 50 there. You can see the updates there on the left, and what it does to your EUR. What’s even more important, your net remaining EUR. That’s what you’re going to get paid for. Let’s say I’m happy with that; that’s what it’s going to be. I can go ahead and click save on that. When I resave this portfolio, it’s going to save my customized forecast for that well. I can go through there, and I can click save. If you have a subscription, you can do this for every single well in your portfolio.

[00:05:17] So along with that, you can see all of the other parameters that are going to be used to calculate your economics. After that, all you have to do is come down here and select your price deck. And then you can perform the valuation. We also added another new feature, called Additional Upsides, where you can manually add your own wells. What I’m going to do is show you a quick example of that.

Additional Upsides Feature

[00:05:45] Here’s another pre-made portfolio. I just found an area. It’s also in Denver basin. It’s going to zoom me to this area. And what you’re seeing here- I’m going to turn on what we call “Upsides”. These are wells that… (I’m going to select those wells again). These are wells that PetroValues believes can be drilled in the area. This is based on the geology but also based on the proximity to producing wells. So, you have to be within three miles of a producing well for us to actually generate these.

[00:06:19] Let’s say for instance, I had interest in this entire 640 acre, section 9. What I’m going to do is- I’m going to assume that this entire section is going to be drilled on a 640 DSU (drilling and spacing unit). I’m going to select the two upsides that PetroValues has generated there. I’m going to click save. I’m going to “save as”, because it doesn’t really matter. You can name it whatever you want. I’m going to click save, and there’s our portfolio.

[00:06:48] You can see that- we have laid out that there could be two wells drilled. Based on what has been drilled, and what is producing in the area, there is two proven Upsides, in the Niobrara. They are based on the SEC rules. There is no production, of course, because these are theoretical wells. But what I can come in here and do- we can come in here and we can actually see (go to the left), and we can see what the forecasted production for these wells is going to be.

[00:07:16] We can change the production start dates on these, so we can move them out. You think that maybe they won’t be drilled for three or four years, you can set that in there, and run that. You can see, there’s the EUR. There is a different type curve in the area (than the previous example), but you can also do your manipulations there.

[00:07:32] If you have better frac efficiencies, or you know a good operator is coming in here, and you think you can do 35% more that the type curve, you can represent that here. You go ahead, and just type that in there. There maybe 150% water, because it’s probably going to be a larger frac. There you go. And you can see it reflected. Click save. Save that in my portfolio. And I’m ready to go.

[00:08:00] let’s say that I want to assume that there’s going to be more drilling in the area. Soon enough, there’s going to be another well drilled. That’s going to allow me to have proven upsides, proven reserves, in this other half section here. What I can do- I can come in here, and I can actually add those wells. I’m in DJ basin, so I’m going to click Denver-Julesburg basin. I want to add two more Niobrara wells. Click that. I want a 1 mile horizontal, so I select the well length. The type curve- what I’m going to select, is going to be… Since they’re right next to these guys, I’m going to select the same type curve. So I’m going to come over here, and I’m going to see that it’s in this type curve here. We are in black oil 038 NW 3. Reserves category- Let’s go ahead and put… Who knows, maybe you’re really optimistic. Let’s go ahead and PUD (proved undeveloped) those things up. Working interest- let’s call it an operator. We’re going to have a 100% working interest, and an 80% NRI. I want two of them, so I’m going to click right here. Hit backspace, and I’m going to put two. Add those upsides, and there you are. We’ve just added those upsides. You can go through here again. You can edit the forecast on those, if you want. And now you have created a portfolio that consists of these two upsides, as well as two more upsides, because we think we can drill 2 more in that east half of that section 9. All I have to do is, come through here and save that.

Conclusion

[00:00:01] So that’s it. I hope everybody enjoys it, and gets to use it. Like I said, it’s FREE. You can go through, for any of these wells, and you can see what the EURs (estimated ultimate recovery) are. In some areas you might be happily surprised, depending on who you are. In other areas, you might be a little disappointed in the well performance.

[00:00:30] This is the power that PetroValues gives. You actually get to understand, just because someone has drilled a well in the area doesn’t necessarily mean that anybody’s making money. However, there are some other areas where people have drilled one-off wells, and they are spectacular, and those areas are severely undervalued. We think this is a pretty powerful software. We don’t know anyone else out there that allows this capability. You just simply go to a website. You don’t have to download software. You don’t have to install anything on your computer. You don’t have to download a database. The database is here. The information is here. The usability is here. You can go through and actually run economics, and see well performance on a well-by-well basis. Come check us out, and I hope you enjoyed the video. Thank you.

If you enjoyed our blog, please click the subscribe button below.

 

Subscribe

 

 

Follow us on social media:

Leave a Reply

Your email address will not be published. Required fields are marked *

Subscribe

petrovalues-blog-subscribe
Click the image to subscribe!

Contact Us

petrovalues_contact
We’d love to speak with you!

1-855-867-3876

Questions?

blog_mineral_owner_valuation
Email us!