Future Wells Included in Mineral Rights Appraisal (Upsides)

Future Wells Included in Mineral Rights Appraisal (Upsides)

Forecasting Production

In oil and gas development there is an aspect of predicting future production, which is not only important to the company but in many cases the share holders, and also mineral owners. The technical practice of forecasting production is a critical component of understanding the value of both producing wells and future development wells and the valuation of mineral rights or subsurface rights.

Upsides

Upsides are wells that could be drilled, but are not yet drilled or permitted. The upside potential can influence the value of acreage and mineral rights, and therefore is a key component to area development. Geologic data, petrophysical models, and reservoir engineering practices are used to understand the number of upsides possible in an area.

Analysis

The PetroValues technical team is a group of industry professionals who have developed unique upside wells, for use in the acreage valuation process or mineral rights appraisal.  Standard industry practices are followed in generating these upside wells. The team begins by analyzing geologic and production data to identify like-areas, based on reservoir characterization and productivity.

Type-Well

The team can then develop a “type-well” by analyzing producing wells. A type-well can be described as a generalized well that predicts, with confidence, the production forecast of future wells. These wells are generated  for every producing formation, by lateral length, within designated like-areas. The individual type-wells are then critiqued through reservoir modeling and history matching. This process builds confidence based on parameters such as in-place volumes.

Combining Historical Data and Production Forecasts

Combining knowledge of historic production with an understanding of the reservoir, allows the operator to determine the development strategy of an area (i.e. number of wells and spacing between). Additional economic parameters such as drilling timelines, capital costs, and market prices can then be considered to calculate the value of the individual upside wells or an area as a whole.

Check out our Map

In the attached video Krystal Hickman, VP of Sales and Marketing at PetroValues, explains how the upsides generated by the PetroValues staff can be utilized in the online oil and gas valuation process.

Krystal Hickman received her BS in Petroleum Engineering from the University of Oklahoma. After graduating, she worked for Anadarko Petroleum Corp. During her time at APC her roles included field operations, reservoir engineering, business development, asset surveillance, and competitor analysis. Her experiences were focused within US onshore assets, specifically unconventional plays in the DJ and Powder River Basins. Krystal is an advocate for the industry and enjoys bringing people together to discuss problems and find solutions. 

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