For an Existing Well case:
The header information at the top of the production curve/table is copied into the top portion of the Report Page.
Additionally, the user can add several lines of information that will be placed above that information.
Should the user be acquainted with HTML, HTML text put into this box will be displayed using HTML formatting.
For a New Well case or from the DI Tools page:
The header information from the top of the production curve/table is NOT copied into the top portion of the Report Page.
So, if a header is desired, the information must be entered into the Header Information box.
Should the user be acquainted with HTML, HTML text put into this box will be displayed using HTML formatting.
Major Phase
The Major Phase of an oil well is oil, and the Major Phase of a gas well is gas. The Decline Curve Analysis calculates the decline rate of the Major Phase only.
Initial flow rate radio button (1 mo, 3 months, 6 months, 12 months)(exponential or 5 year decline options only)
This is simply a convenience tool that will calculate an initial daily flowrate for the flowstream based on the well/lease’s last 1 month, 3 months, 6 months or 12 months of production.
Allows the user to pick an initial flowrate which ”damps out” recent rate fluctuations using the time period of his choice.
Initial Flowrate (exponential or 5 year decline options)
As calculated by the above, or entered by the user.
For the MAJOR PHASE.
Decline Curve Start Date (exponential or 5 year decline options only)
The month and year on which you desire the decline curve to begin, for flowstream modeling purposes.
Not to be confused with the:
Economic Analysis Start Date
The month and year (on the chart) when you desire to ”pull the flowstream” into your cashflow analysis.
Note that all EcoV3.0 Economic Analyses actually start with fiscal year (whatever the current year is),
BTU Content of Gas
This is the heating value of the gas on a volumetric basis. BTU/SCF is the abbreviation for British Thermal Unit per Standard Cubic Foot.
This information is available from gas analyses taken by the operator or purchaser.
If the BTU content is unknown, the program uses a default BTU content of 1000 BTU/SCF, which is approximately that of pure methane.
Note that some refer to the heating value of gas in other units, such as MMBTU/MCF, or Million BTU per Thousand Cubic Feet. Using these units, 1000 BTU/SCF is equivalent to 1 MMBTU/MCF.
Gas-Oil Ratio
The program calculates the gas-oil-ratio (GOR) as an average from the historical production. Note that the term GOR is used for consistency on both oil and gas wells. The GOR is used to calculate the future Minor Phase flowstream, based on the declining Major Phase flowstream.
The user can enter a different GOR if desired.
The units for the GOR are scf/bbl, or standard cubic feet of gas per barrel of oil (or condensate).
V3.0 brings the user several additional options as to modeling the price data. Basically, the user chooses (via the radio button) one of two general models:
Flat/Escalated Pricing
Similar to previous versions, initial gas and oil prices are selected and then an annual escalation (or de-escalation) percentage is chosen. The de-escalation capability (ie, negative escalation rate) was not available in prior versions.
5 Year Price Deck
Input gas and oil price decks for each of years 1 - 5, then an annual escalation (or de-escalation) percentage to be applied after the 5th year.
If only two years of prices are entered, the last price entered in year two will be used for the remaining life of the well.
You must enter prices ”contiguously”, ie, you cannot enter a price for year two and three without having a price in year one.
Your price deck will be saved in your account and will be shown as your default price deck the next time you use the calculator!
Previous versions allowed the user to run economics on producing wells and select either a Working Interest or a Royalty Interest, or both. In order to run a Royalty Interest case, the operator’s working interest and the ”8/8ths” (or gross) monthly operating expenses were needed, as these parameters, along with the flowstream, determined the life of the well. The user could simulate basic capital expenditures both upfront and after a number of years, but WI changes after casing point and reversionary interests were not able to be modeled.
The Working Interest and Royalty Interest cases remain essentially the same. Added for V3.0 is the ability to model a ”drilling” or ”exploration” type deal. Both ”promoted” and ”non-promoted” cases can be modeled with V3.0.
Typically used for wells/leases that are ”already in production”.
Used for acquisitions or evaluations of existing production.
Either Working Interest or Royalty Interest case.
Used for a ”drilling deal”, ie, to model the projected results from a proposed well.
Can run either ”Promoted” and ”Non-promoted” cases.
”Promoted” cases include the Carry-To-Casing Point, Carry-To-Tanks and Back-in After Payout.
In the ”Promoted” case, can run the economics for either the ”Promoter” or the ”Promoted”.
The ”Promoter” is the one who generates the deal and receives the benefit of the promoted interest.
The ”Promoted Party” is the entity who takes a deal from the ”Promoter”, ie, pays the promote.
If you are running any of the New Well cases in conjunction with a producing lease (rather than the DI Tools section), you must enter header info as the header info from the producing lease will not be carried forward to the Report Page. Also, the cum from the producing lease is not carried forward when running an New Well case.
Expenses
Enter the amount, in dollars per month, of the gross, or 8/8ths (100 % WI) operating expenses attributable to the well.
This amount should not include ad valorem or severance taxes as these are handled separately.
The operating expense can be escalated if desired by entering an escalation percentage after ”Esc.:”.
The escalation will begin in fiscal year two and continue for the life of the well.
Severance and Ad Valorem (Property) Taxes
Ad Valorem tax rates are estimated for each of several states.
These are subject to change without notice, so the user should satisfy himself of the rates currently in effect.
Any of these rates can be modified by the user.
Note that some wells receive a severance tax exemption when they are brought back on production after a long shut-in period, or for other reasons.
The program utilizes an ad valorem tax rate of 2.5 % of gross revenue. Note that this is merely an estimate, and ad valorem taxes vary by county/school district.
Property taxes are minimal in some states (such as WY).
Capital Costs
All shown as gross, 8/8ths.
Geologic and Geophysical Cost, Leasehold Costs, Drilling Costs & Completion Equipping Costs are used with the ”New Well” cases.
Future Capital Expenditure is optional with either ”New Well” or ”Existing Well” cases.
Years in Future represents the years in the future when the Future Capital Cost will be placed in the cashflow stream. Should you select 3 years, the Future Capital Cost will be placed in the cashflow stream at the end of fiscal year three.