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UnConventional Resource Analysis (UCRA)

LSi Software

Unconventional Resource AnalysisUCRA is designed to model and value staged investments in resource plays where individual prospect anomalies are difficult to characterize.  UCRA provides an integrated economic model that captures the range of project cost and performance uncertainty for different development scenarios.

UCRA version 2-6 features the following improvements:

A sequential accumulation plot of cumulative predicted initial production:

  • UCRA calculates the P10/P90 and mean values for each set of wells.
  • This enables users to demonstrate the expected ranges after, for example, five wells, 10 wells, or 20 wells.
  • In addition, UCRA has the ability to facilitate performance tracking of actual initial production results for initial wells in your resource play program versus the predicted range.
  • This is the vital step in understanding the accuracy of the model predictions and taking data-driven decisions to improve your estimates.​​

A robust and field-tested capability to model the complex Canadian fiscal regime via well-level royalties and drilling credits:

  • Including the Provincial fiscal regimes of Alberta, British Columbia, Manitoba, and Saskatchewan

UCRA probabilistically models a resource base from type well curves as well as standard volumetric (including sorbed gas) considerations. Production volumes are scheduled over time so that distributions of monthly program production, number of active wells, and costs provide cash flows that lead to multiple economic indicators. These values are readily exportable for more detailed analysis.

Unconventional Resource Analysis

Unconventional Resource AnalysisConceptually, here’s the UCRA process:

The model develops the defined acreage position based upon an input drilling schedule and input well spacing. The number of well locations is based upon your acreage description and well spacing.

Well performance is based upon standard type-well characteristics described probabilistically: IP, Initial Decline, Final Decline, and the Final Cutoff Rate.

The UCRA staged development process models the decision processes and stage-gates as you evaluate and develop the resource play.

Unconventional Resource AnalysisIn the first exploration phase, one can estimate the chance that the early wells will deliver the low end of your forecast IP distribution, i.e. there is an active petroleum system. The detailed Chance Checklist is fully customizable to company technical concerns. Additionally, users can model a percentage of subsequent failed wells.

Next, one can optionally model the Pilot stage through a ranged number of  wells with the appropriate land, seismic, and overhead costs. Input the minimum IP hurdle you would require in the pilot wells to continue development. With failure, UCRA stops drilling but accumulates all costs, revenue and production for a realistic valuation.

After achieving success in the Pilot stage, proceed to an economic demonstration stage, where you record the maximum number of uneconomic wells you would tolerate.  If the production from these wells is insufficient to achieve a positive well NPV, drilling is stopped with production, revenue, and costs recorded for the valuation at that point.

A positive NPV/well in this stage is the signal to proceed into the Last Development stage.   Here the total projected NPV success and failure cases are based on operating costs and the timing of capital investments and production revenue.  Well and project resources and economic indicators are summarized for individual trials and for the complete simulation.

Unconventional Resource AnalysisUnderstand the Results

Go step by step through Crystal Ball Monte Carlo iterations to understand sampled play parameters effect on the production, costs, and value. Alternatively, view the full stochastic range of iterations to examine the program’s deliverables.

UCRA provides the detail needed to compare and contrast unconventional opportunities so you can high-grade the best projects and exit those that don’t meet your goals.

The new UCRA Analysis Tool allows you to investigate, via a variety of customizable charts and an array of powerful filters, the diversity of sampled values contributing to the results imported from UCRA.

For example, suppose that you need to provide management an understanding of the production and cash flow from the P90, P50, and P10 full development results.  Instruct the Analysis Tool to look at a window of trials around those percentiles and immediately observe the wide ranges of input parameters which were sampled in the UCRA simulation.

Export the sampled values for a single trial back to UCRA to observe the production, capital, and investment streams and economic metrics.

Unconventional Resource Analysis