The NFL has the Super Bowl, Hollywood has the Golden Globes, and the upstream Oil & Gas industry has NAPE. It’s crazy to think it’s already less than a week away, but it’s time again to get your A-team warmed up and suited up for the world’s largest Exploration & Production expo. This is the 20th year Houston has welcomed the best of the best to network, publicize, and pitch billions of dollars in producing properties and packages. So eat your Wheaties (or Kashi GoLean, for those of you still keeping New Year’s resolutions) and start strategizing your plan for the big show.
We’ve gathered 5 fail proof ways to ensure a win at Winter NAPE 2013.
- Assemble Your Players: Remember, this is the big leagues. NAPE allows your company to acquire information about where deals are being made, and what key play areas are developing. Determine who will foster relationships with your current and prospective customers, and have the power to make decisions on the floor.
- Be the Ball, Danny: Brainstorm with your team to create a list of tangible goals. We know that you’ll go home with more koozies and golf balls than you’ll ever need, but will you also take away key contacts, leads and solid opportunities? Make time to see what the big players have lined up for the year. Listen to them pitch their packages and see how your company could employ similar methods.
- Pinpoint Your Targets: Review the exhibitor floor list and highlight who you want to see and where they’re located in the building. While manning your booth or walking the floor, keep your eyes peeled for the key individuals you need to meet to make your trip worthwhile. Decide who you want to meet, and how you can ensure they go home with your company on their mind. Use your free time to grab a meal or a drink with a potential client. Face time = time well spent.
- Execute Efficiently: With over 18,000 people attending, it’s best to divide and conquer. There are a multitude of breakout sessions, speakers, and overviews. Decide what’s important to you and write out a plan. Don’t waste time at booths that have nothing to offer you. Take the free pen and move on.
- Study the Game Film: Because you’re no rookie, you came to NAPE armed with business cards and scratch paper. Don’t leave those notes shoved in your briefcase with what used to be a banana. Instead, plan a recap meeting within a week to discuss the outcome of your trip with your team. This gives you time to collectively strategize plans for sending follow up, reviewing packages you purchased, and pursuing deals you want to chase.
By developing a clear vision of success and a specific plan of execution, you can make this your best NAPE yet. As Dan Marino said, “There is no defense against a perfect pass.” Speaking of which, don’t pass up Drillinginfo’s booth. We’ll be in #2509 and we’d love to be your partners in success, both at the show and in the patch!
What about you? How do you make the best of the trade shows you attend? Please leave a comment below.
If you’re a regular reader of this blog, I don’t have to tell you that Daily Average production numbers can play a critical role in analyzing a well. Often times, operators will not choke back and instead turn production on full blast to impress investors. Looking at Daily Average production can help to get a more accurate view of the well’s performance. Additionally, if you have enough history, looking at the Daily Average over a period of time can give you a good idea of the well’s decline.
However, reporting becomes an issue when trying to compare apples to apples. Some states report the number of days (or “Days On”) within the month wells produce, while others do not. As a result, Daily Average calculation varies in DI Desktop. Specifically, AZ, CA, CO, FO GULF, MT, ND and NM report the number of days wells produce. For all other states, the Daily Average in DI Desktop is derived by using the number of days in the month.
To utilize the “Days On” feature when searching any of the states listed above, first go to the “File” menu at the top left of the DI Desktop window and select “Preferences.” After the preferences window appears, click the “Use ‘Days On’ to calculate Daily Avg.” checkbox.
Next, click the “Grouping” icon.
Then, click the “Production Formatting” tab and select the “Daily Average” radial under the “Production” heading.
To see how many days were used to calculate each well’s production numbers, click the “Details” tab.
Alright, that should be enough to make you dangerous. If you ever need any help walking through this or any other workflows, call our Support line at (888) 477-7667 ext. 3. We would be happy to help you get the most out of your subscription!
Now it’s your turn. What do you think is the best way to get an accurate picture of a well’s ultimate performance? Leave a comment below.
Decline curves are one of the most extensively used forms of data analysis for evaluating reserves and projecting future production. By predicting production behavior at different points in time based on the well’s past production history, analysts are able to identify well problems and predict performance and estimate ultimate recovery (EUR) for a single well, or a group of wells on a single Lease (Wells in Texas are aggregated at the lease level).
Automated and intuitive, Drillinginfo’s production charting application speeds up the time it takes to complete your analysis. It provides 3 Decline Curves to choose from; Exponential, Hyperbolic and Multi-segment.
In addition to projecting decline curves, the application allows you to:
- Perform automatic primary phase selection.
- Automatically pick decline curves and assign them as an exponential or hyperbolic decline cases.
- Once refined, import auto-forecasts into the OMSYS economics calculator with a single mouse click.
- Use the Decline Curve Analysis toolbar to view completions data in just one or two clicks.
- Take the guesswork out of economic forecasting.
Under the Hood
Our Decline Curve Analysis method is modeled after Arps (1956). It is widely used in the Oil & Gas industry to model production curve behavior and its associated forward prediction. However, it is important to understand the limitations of the technology to most accurately create economic forecasts and model future production for a given lease or well.
When using the Decline Curve feature, view the computer generated auto-pick as a guiding start. Depending on the well history and type, adjusting the “B” factor or Nominal Decline rate sometimes obtains the best data fit. But, if the production data is very noisy, the computer may pick a very low or high (3.0) value for “B”. This is usually not a valid pick and needs to be adjusted. When adjusting the “B” value or Nominal Decline, the Reserve Replacement Ratio (RRR) & EUR values are automatically recalculated. Offset well values or corroborating output from type wells in journal articles is always helpful when narrowing down the EUR’s for a lease or well. Again, the customizable nature of the tool makes it great for users to apply their own professional opinion.
The Last Analysis
Another unique benefit to the charting application is the ability to save your Parameters before starting your Economic Analysis.
The Economic Analysis feature allows you to determine the decline rate between any two points of major phase production history. It uses the decline rate from Decline Curve Analysis or a user input decline rate, as well as other user inputs, to determine estimated future production, remaining recoverable reserves, net present value and other metrics.
To fully calculate a proper Reserves/Economic Analysis, you will need 6 pieces of information: Forward prediction with RRR/EUR values (including gas analysis, such as BTU of gas), current pricing information (or 5-Yr price deck), proper values for Ad Valorem/Severance taxes, proper ownership percentages (WI/NRI), acquisition costs (CAPEX) and operating costs (OPEX). The OMSYS calculation routine contains inputs for these items and many more as shown below:
Most Mineral Owners and operators tend to use Flat/Escalated Pricing, but if known, enter the 5-Yr price deck. Otherwise, consult published reports from trusted sources to obtain the desired information. In the case of calculating company valuation for loan approval, the price deck is often fixed by a bank. The BTU content, GOR and other gas parameters are found in gas analysis reports provided by the operator. They are also found in field studies. The “Save Default Price Deck” option allows you to utilize the same deck, which makes asset comparisons much easier.
The Gas Oil Ratio (GOR), Hyperbolic “B” Exponent and “Nominal Decline” values are automatically imported into the OMSYS parameter screen to speed up the analysis process.
The three primary outputs from the OMSYS report are Net Present Value (NPV) from 0-50% in 5% discount increments, the economic constrained RRR/EUR reserves calculations and Cash Flow estimations.
It is important to note that erratic production rates can be created by fluctuations in reservoir dynamics, variations in water production, changes in the flow path due to paraffin, scaling, recompletion/stimulation and damage to tubular goods. Many evaluators attempt to model the production curve throughout the history of the well or lease. The reality is that flow dynamics may change several times during the life of a well. Therefore, the most recent 1-2 years of production is the most important information for forecasting.
It is also important to note that not every well an evaluator attempts to model will display an ideal (or even adequate) signature. Text book examples are great, but very few wells will follow a discernible pattern. Some wells, due to their inherent signatures, will require intervention from the evaluator to attempt several picks or manual revision of the nominal decline and/or “B” factor in order to bring about the proper outcome. Usually, a minimum of 6-8 monthly production data points are required to accurately model a forward prediction of production.
In many cases, a well may show an inclining production signature because of cleanup after initial production, choke setting changes, re-stimulation, or other factors. The Arps formula is not designed to handle these circumstances. As a result, it is best to set your auto-pick after the event where production is inclining. This enables an accurate and more reasonable estimation of future production.
Alright, that should be enough to make you dangerous. If you have never used the Production Charting Application, please login and see what kind of insights you can glean for your producing wells. And, if you need any help walking through the application, give us a call at (888) 477-7667 ext. 3.
Now it’s your turn. Do you use the Production Charting Application to calculate declines on your wells? Leave a comment below.
Are you part of an E&P group who would like to determine capital expenditure for new drilling programs?
Are you a service company who drills horizontal wells and needs a way to estimate costs and forecast revenue?
Do you work for a financial services company who would like to predict an operator’s total expenditure for horizontal drilling programs in a given play?
If so, you’ll be happy to know Drillinginfo is now digitizing lateral length and azimuth for horizontal wells. To add them to your search results, select the “Surface & Bottom” radio button in the “Location Data” section of the Permit Search Criteria page. The system will automatically calculate the lateral length and azimuth for you.
To see the results, go to Table View. From here, you can export to Excel and several other 3rd party applications.
Lastly, click “Map View” and then “Histogram.” Select “ocompany” from the Histogram Column drop down and “horizontalLength” from the Bubble Column drop down, and click “Submit.” This generates a color coded map of operators bubbled by lateral length.
We hope you find this new tool helpful. If you ever have any questions or need help walking through the workflow, contact Support at (888) 477-7667 ext. 3
Drillinginfo’s World Members Meeting is quickly approaching. It will be held October 24-26 at the Hilton in Downtown Austin, Texas. Our keynote speaker is Mr. Moneyball himself, Billy Beane of the Oakland A’s. He will tell us how he used statistical analysis to generate the longest win streak in the modern era with one of the lowest payrolls in baseball. Please join us for this informative industry event. The conference is FREE, but seating is limited.
I’m from Michigan. We make cars. Growing up, the only thing I knew about oil was that you needed to change it every 3,000 miles. But, after moving to Texas and getting a job at Drillinginfo in 2010, I had to come up to speed ‒ quick!
Needless to say, these words were not part of the standard Midwestern lexicon used at my dinner table. As such, I spent my first year at the company testing the patience of everyone in the office as I had a new question just about every 32 seconds. I know the painful learning curve of Oil & Gas, and I’d like to save you from it.
So, if you’re new to the industry, here are 7 free resources that can help you sound like a veteran in a matter of months.
- How Stuff Works: The Discovery Channel’s popular How Stuff Works site has a few fantastic articles on “How Oil Drilling Works.” They walk you through the basics of how oil formed in the earth, how it’s located and how it’s extracted. The articles are replete with helpful graphics and as an added bonus, you can watch a segment from Dirty Jobs where Mike Rowe gets awfully muddy during his 12 hour adventure into roughnecking.
- YouTube: You would be amazed at the quality drilling content you can find on YouTube. The site is filled with great videos that explain fracking, give you drilling rig tours and even teach you how to negotiate a lease. You can also watch Waylon sing about the joys of being an oilman. Just enter a keyword into the search field and see what you can come up with.
- Wikipedia: As with YouTube, you can search Wikipedia for almost any industry term and get a detailed explanation that even a Michigan boy can understand. A few of my favorites are the entries on drilling rigs, shale oil extraction and, of course, Spindletop.
Image courtesy of Wikipedia.
- Schlumberger Oilfield Glossary: As fun as it is to read extensive articles on Wikipedia, sometimes you just want a brief definition; that’s where Schlumberger’s Oilfield Glossary comes in. The definitions are extremely clear and extremely brief. Given the amount of information you have to absorb right away in this industry, these are two things you really learn to appreciate as you’re coming up to speed.
- Drillinginfo’s Online Help Text Glossary: While Schlumberger’s glossary is pretty awesome, I have to admit I’m rather partial to Drillinginfo’s. That might have something to do with the fact that I wrote it. And, since I wrote it, I tried to make the terms as clear and easy to understand as possible. If you find something that doesn’t fit that description, please let me know.
- Adventures in Energy: Who doesn’t like cartoons? They have taught us everything from lessons on inflation to how laws are passed. And, thanks to the American Petroleum Institute’s Adventures in Energy, they can teach us everything about hydrocarbons. Ok, their animations aren’t exactly cartoons, but they are very helpful illustrations of each stage in Oil & Gas development and production.
- Twitter: Nothing is more valuable when getting to know Oil & Gas than staying on top of industry events happening around the world. And, Twitter is hands down the best way to do that. I have lists for both “Oil & Gas People” and “Oil & Gas Biz” filled with every person and business in the industry I could find on Twitter. Feel free to subscribe to them and, if you see anyone missing, send me a tweet.
Alright, these resources could keep you busy for a long time. But, if you spend just a few minutes researching them each day, you’ll be talking permeability and decline curves like a Pro in no time. If you’re a Drillinginfo subscriber, don’t forget to check out the Training Library for hours and hours of great education. If you’re not a subscriber, I’m sorry to report access to the Training Library isn’t free, but it’s well worth the investment!
Now it’s your turn. What resources did you find most helpful when you got started in Oil & Gas? Leave a comment below.
Drillinginfo was on a mission to raise NAPE attendee’s oil & gas IQ this summer with insightful presentations and the release of DI Pro. This new package is comprised of DI Analytics, DI Geology, DI Land and DI Desktop. Those who attended the presentations not only got a first look at the new features, but examples of how they can improve your workflows and help oil & gas professionals make smarter, faster decisions.
Colin Westmoreland speaking at Drillinginfo’s Summer NAPE booth
If you’ve ever been to a Drillinginfo NAPE booth, then you know we can’t help but have a little fun. This year we welcomed Mentalist Jon Stetson, who would read our participant’s minds before each presentation. He was so dead on he even put his own money on the line if he was wrong…although he never was.
Mentalist Jon Stetson on the Drillinginfo stage
Come see what we have in store for Winter NAPE at booth number 2509 on February 5-8, 2013.
If you’re interested in learning more about what DI Pro or any facet of Drillinginfo has to offer, please contact your sales representative.