Short Courses

Risk, Uncertainty, and Decision-Making in Unconventional Resource Plays

INSTRUCTOR :

William Haskett, Decision Strategies Inc., Houston, TX

INSTRUCTOR LOOKUP

DATES:

September 17 - 18, 2012

LOCATION:

Norris Conference Center, City Centre Location, Houston, Texas

TUITION:

Member: $950.00 • Nonmember $950.00

(if purchased individually)
Registration for the entire week is $1,795 for members, $1,895 nonmembers. Goes up to $1895/$1995, and/or individual course prices increase by $50/course day after 8/27/2012. Course notes, refreshments and lunch buffet included.
No refunds for cancellations after 8/20/2012.

LIMIT:

50 people

CONTENT:

1.5 CEU What is a CEU?

Who Should Attend

This course is targeted towards Earth Scientists, Engineers, Economists, Landmen, and Managers who need to evaluate, plan and make decisions with regard to unconventional resource assessment, testing, and development program planning. Since this course goes well beyond tactical number-crunching into analysis, decisions, strategy, and portfolio management principles, a rudimentary understanding of risk analysis, including ranged or probabilistic input will be assumed.

Objectives and Content

This course is oriented towards decision-making in Unconventional plays. Starting with resource assessment methods, it moves through the full unconventional value-chain. Designed to complement existing conventional evaluation skills, this two-day exercise and example filled workshop provides participants with the techniques and reasoning needed to validly assess the merits of the search for, and development of, unconventional resource plays. In addition to basic evaluation of opportunities, it highlights the major decision points and strategic options available to companies to increase the probability of profitable results, while identifying and limiting downside risk. The unconventional play discussion is centered on tight gas sands, shale gas, and coal bed methane (CBM), though enhanced recovery, SAGD, oil shale resources, and even large-scale conventional projects can adapt similar techniques.

In addition to the theory of resource estimation, probabilistic methods and a practical model are provided (to be retained by the course participants). No additional software will be required apart from Microsoft Excel.

Traditional application of volumetric chance and uncertainty must be modified to provide a valid assessment of unconventional assets. A primary difference between standard and unconventional assessment is the reduction of dependence on volumetric uncertainty. Unconventional Plays are rate based. As such, unconventional play evaluation requires an understanding of production profile uncertainty through time. The valid creation and assessment of type curve distributions, a critical component in the estimation of project NPV, will be covered from an uncertainty context. The creation of P10-P50-P90 curve distributions take more care and attention than most companies are providing.

Unconventional evaluation methods must include a strong linkage to cost and revenue. A full business context is required to make appropriate decisions in the exploration for, and development of, unconventional resource plays. An introduction to probabilistic economics is provided.

Along the way, concepts covered will include the development of EUR Distribution Envelopes, Pilot Effectiveness and Pilot Optimization. These topics/skills combine subsurface resource and stimulation uncertainty to provide insight on performance learning and the optimal number of pilot wells and pads.

More than evaluation, the methodologies shown provide the opportunity to assess the unconventional potential within a decision context. Participants will test and implement strategies to reduce competition, appropriately incorporate Value of Information assessment, and mitigate downside risk.

Topics discussed and included in exercises will include:

• Developing methods for valid resources assessment
• Distinguishing recovery from matrix and sorbed components
• Assessing and Working with Production Uncertainty
• Production Profiles: Comparing and Contrasting Profile Aggregations with Profile Pathways (and applying them appropriately for decision-making)
• Field Size Distributions vs. Well Size Distributions – using well data to predict field results
• Dealing with Imperfect Data and value of information (VoI)
• Risk and Uncertainty in unconventional opportunities
• Pilot Planning including Optimal Pilot Sizing
• Unconventional Assessment within a Decision Context
• Application of principles to workshop case studies

PLEASE NOTE: Participants in this course are strongly encouraged to bring a personal laptop computer for use with the simulations and teamwork exercises. People without computers will still get something out of the course, but they won't get to take home the tools that we build or are given out. Participants will be supplied with Excel models for exercise and demonstration purposes (Microsoft operating system).