Play,
Operator and Value Analysis in the WCSB Foothills
Description of WSCB Foothills as a pdf: WCSB Foothills.pdf
WCSB Foothills
Forward Energy’s Experience
In addition to industry
experience (averaging over 30 years for each of the principals), Forward
Energy has completed numerous Foothills studies since 2000. These
engagements have included value added steps such as large data-set
compilation (from disparate sources), data ‘cleansing’ and filtering,
analysis and interpretation, mapping, economic evaluations, etc.
Forward Energy’s Study Process
The Forward Energy process,
refined over the past seven years is rigorous, consistent and complete.
Commencing
with data collection, the overall process includes database development,
analysis and interpretation, and ends with
output creation. Each of the database and analysis
sub-processes is described in more detail.
Forward Energy: Database
As the foundation for the
subsequent analysis, Forward Energy has established a well database.
Although initiated from public data sources, many value added features are
incorporated. Based on years of experience at building similar databases,
many shortcuts and enhancements are included. Examples of data
enhancement features include:
Forward Energy’s Analysis
From this proprietary
database, Forward Energy develops analysis customized to each client’s
specifications. There are four phases in the Analysis process, referenced
in the sidebar chart.
The outputs from any phase
of the Analysis are a mix of graphical charts, summary tables, detailed
maps and focused interpretation/commentary. The metrics reported can
include, but are not limited to:
The
Plays and Operators phases are typically based on publicly available
data. In selected cases this data is supplemented with client data (e.g.
well working interest).
The Play Entry/Benchmarking
Phase has two components. In the Play Entry component, Forward Energy
reverse engineers the entry strategies of selected operator-area
combinations based on operator legacy transactions, historical production,
well drilling, land acquisitions, etc. The intent is to discern the
strategies that successful operators used to enter and build their
Foothills positions. Within the Benchmarking component, selected peer
operators are compared for their well activity, production, entry timing,
efficiency and other physical metrics.
In the Value phase,
financial inputs (commodity prices, capital costs, operating expenses,
inflation factors, etc.) are integrated with the physical models. From
these economic models, value performance indicators such as Rate of
Return, Risked F&D cost, and NPV are determined. Interpretation of these
results addresses questions of which operators (or plays) are making (how
much) money.
The Benchmarking and Value
phases of the Analysis are conducted as confidential and exclusive
projects. Significant value added can be achieved when incorporating
confidential client information on well results/forecasts, capital and
operating cost estimates, facility and infrastructure positions, working
interest positions, etc.
Summary
Forward Energy’s
consistent and rigorous study process, combined with the experience and
insights are a pre-eminent tool for any client evaluating an existing
position within, or considering entry into, the WCSB Foothills region.
If you
would like to follow-up on
this discussion, call
the experts at Forward Energy Group for advice.
Description of WSCB Foothills as a pdf: WCSB Foothills.pdf
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