UCR Essentials is designed to model and value staged investments in unconventional resource plays where distinct individual prospect anomalies are difficult to characterize. UCR Essentials sticks to the basics and provides an integrated economic model that captures the range of project cost and performance uncertainty for single play segment development scenarios.
Here’s the process:
UCR Essentials probabilistically models a EUR from user-defined type-well decline distributions (Initial Production, Initial Decline %, Final Decline %, Effective Decline exponent and the Final Cutoff Rate) using the Modified-Arps decline to build a well’s monthly production.
For comparison and a reality check, the geoscientist may model a volumetric EUR/well based on reservoir thickness, porosity, saturation, volume factor and recovery efficiency input. The simulated resources (blue) versus the type well-generated EUR/well (red) are displayed in a log-probit chart where a good, matched overlay indicates that the geoscience-modeled volumetric EUR/well agree with the engineer-modeled EUR/well. Rethink and modify the inputs when there is not a match.
Model drilling and other capital costs along with operating expenses to evaluate monthly production revenue and net cash flow. Production volumes are scheduled over time based on drill timing and the number of drilling rigs to represent the project’s possible resources through each of the exploration, pilot, economic demonstration and development stages.
Three preliminary input stages and hurdles can be modeled (exploration: shared chance; pilot: minimum IP/well; demonstration: maximum number of uneconomic wells) prior to the final development stage. Within a trial if a stage fails due to not exceeding its hurdle, UCR Essentials stops drilling and accumulates all costs, production and revenue. Success at each stage allows the simulation to proceed to the drilling the next stage to test the next hurdle.
Simulated monthly production, revenue and net cash flow streams are used to calculate key economic metrics to describe the project. These stream values are readily exportable for more detailed analysis.
Understand the Results
Go step by step through the Crystal Ball Monte Carlo* trials to understand each iteration’s sampled play parameters effect on the production, costs, and value. Alternatively, view all the stochastic trials to examine the program’s range of deliverables.
UCR Essentials 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 UCR Essentials 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 UCR Essentials.
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 UCR Essentials simulation (+/- 5ile trials around the P50 in example below)
Export the sampled values for a single trial back to UCR Essentials to observe the production, capital, and investment streams and economic metrics.
UCR Essentials and its companion Analysis Tool give you basic insights into the potential production, revenue, capital and cash flow for the range of possible resources and value for your unconventional opportunities. Observe how to minimize failure costs at the early stages when you can exit and what is required for a positive development success adding value to your portfolio.
*UCR Essentials requires Oracle’s Crystal Ball Excel add-in to run the Monte Carlo simulation. Individual licenses for Crystal Ball are available for purchase directly from Oracle.