Mire & Associates, Inc.

Transcription

1 Tuscaloosa Marine Shale Activity & Performance Review Mire & Associates, Inc.

2 Introduction The Tuscaloosa Marine Shale (TMS) is an emerging oil shale play. Several operators have been drilling and testing horizontal wells since Well costs are very high ($10-$13+ million) and economic viability of the play has not been established. Mire & Associates, Inc. has analyzed the publically available data to document activity and well results to date. (April 2015) 7/15/ Tuscaloosa Marine Shale Study 2

3 TMS General Information Covers about 2.5 million acres in Louisiana & Mississippi Low acreage cost Numerous vertical wells define oil saturation & rock quality Deep play 10,500 to 14,500 TVD Thickness 100 to 250 Good quality crude API Abnormally pressured 0.65 psi/ft. 7/15/ Tuscaloosa Marine Shale Study 3

4 TMS Play Map 7/15/ Tuscaloosa Marine Shale Study 4

5 Total Play - Activity & Results Summary 7/15/ Tuscaloosa Marine Shale Study 5

6 Wells & Results by County/Parish 7/15/ Tuscaloosa Marine Shale Study 6

7 Best Areas Amite & Wilkinson Counties have the most wells & the best production rates 7/15/ Tuscaloosa Marine Shale Study 7

8 Major Leaseholders 7/15/ Tuscaloosa Marine Shale Study 8

9 Results by Operator 7/15/ Tuscaloosa Marine Shale Study 9

10 Completion Summary by Operator 7/15/ Tuscaloosa Marine Shale Study 10

11 EOG had the poorest producing wells Encana had the highest producing wells 7/15/ Tuscaloosa Marine Shale Study 11

12 Encana had the highest reserves per well 7/15/ Tuscaloosa Marine Shale Study 12

13 7/15/ Tuscaloosa Marine Shale Study 13

14 Production Rates & Reserves are Improving over Time 7/15/ Tuscaloosa Marine Shale Study 14

15 Well Performance Map IP 30 Green > 750 BOEPD Yellow BOEPD Red < 300 BOEPD Rapides Avoyelles Wilkinson Amite West Feliciana East Feliciana St Helena Tangipahoa 7/15/ Tuscaloosa Marine Shale Study 15

16 2015 Wells Completion & Test Rates 7/15/ Tuscaloosa Marine Shale Study 16

17 2015 Wells Reserves Summary 7/15/ Tuscaloosa Marine Shale Study 17

18 2015 Well Economics Leasehold $80,000 Drill & Complete $10,000,000 Facilities $500,000 Total Producer Cost $10,580,000 IRR: 23.5% Payout: 3 years NPV(10): 4,443 M$ Lease Net Revenue 80% Operating expenses $15,000 / month for 6 months $10,000 / month for 6 months $7,000 / month until Ec Limit Prices: June 2015 Nymex Strip Oil Differential 1% Gas Differential 38% Type Curve Parameters Oil Initial Rate (BOPD) 912 Oil IP Oil Initial Decline Oil Hyperbolic Factor 1.40 Oil Minimum Decline 5% Gas Initial Rate (MCFD) 373 Gas IP Gas Initial Decline Gas Hyperbolic Factor 1.10 Gas Minimum Decline 5% EUR Oil: 627 MBO EUR Gas: 277 MMCF 2015 Well performance yields positive economics 7/15/ Tuscaloosa Marine Shale Study 18

19 2015 Industry Reports/Status Goodrich actively drilling & reporting high reserves estimates Halcon May 2015 no mention of TMS Encana May 2015 no mention of TMS (3 wells planned for 2015) EOG May 2015 no mention of TMS Sanchez Energy May 2015 brief mention of TMS Comstock suspended activity Devon sold out to Goodrich in /15/ Tuscaloosa Marine Shale Study 19

20 TMS Conclusions Several operators have scaled back operations. Encana has been the most active operator & has the best well results. The best well results were from Amite County Mississippi & 2014 well costs were too high ($13+ Million) & reserves per well were too low to make the play economic. Well results are improving & wells costs are declining wells - IP 30 of 637 BOEPD & EUR of 683 MBOE. With a target $10 million Drill & Complete cost & current oil prices the wells should be economic in the areas developed in /15/ Tuscaloosa Marine Shale Study 20

21 Engineering Terms BOE barrels oil equivalent of natural gas (6 MCF/BOE) IP 30 estimated average peak production rate over first 30 days EUR estimated ultimate recovery (reserves per well) from hyperbolic decline analysis Stages number of reported frac stages used to complete the well Proppant reported amount of proppant (lbs) used in the fracturing process Lateral length length of horizontal portion of the well 7/15/ Tuscaloosa Marine Shale Study 21

22 7/15/ Tuscaloosa Marine Shale Study 22

23 Consultant Diane Seidel Engineering Technologist Summary Mrs. Seidel is an IT professional with more than 18 years of experience in selecting, developing, and supporting scientific computing solutions for the oil industry. She worked as a project manager on systems ranging from Geographic Information Systems, Oracle database design and maintenance, and integrated upstream G&G systems including Landmark and Finder/Geoquest. In 2011, Diane began working as an engineering technologist/reserves analyst for Mire & Associates. Diane is proficient in using Excel and PHDWin to collect and analyze production data in support of reserve reports, field evaluations and royalty acquisitions. She is skilled in using online data sources such as IHS Energy, Drilling Info and various state oil & gas data sites. Experience 18 years Mire & Associates, Inc., Houston 2011 present Arco International Oil & Gas, Plano TX Arco Oil & Gas Co., Plano TX E-Systems, Inc., Greenville TX Education Bachelor of Science in Computer Science, 1982 Baylor University, Magna Cum Laude Graduate coursework in Computer Science University of Texas at Dallas

24 Engineering Consultant Femi Olaniyi Petroleum Engineer Summary Mr. Olaniyi is a petroleum engineer with seven (7) years of experience in E&P. Assigned to major oil companies and service companies he has supported, installed and provided training for popular petroleum engineering software applications. He is skilled in decline curve analysis, economics, and software troubleshooting. Femi is proficient with DSS TM, Aries TM, PHDWin TM, Fast RTA TM, and Prosper, Mbal & GAP. Experience 7 years Mire & Associates, Inc., Houston 2015 present Halliburton, Houston Wipro Technologies, Houston SAIC, Houston Education B.S., Chemical Engineering Obafemi Awolowo University, Nigeria 2004 M.S., Petroleum Engineering Missouri University of Science and Technology, 2008

25 Engineering Consultant Peter Morgan Petroleum Engineer Summary Mr. Morgan is a junior petroleum engineer with two (2) years of experience in E&P. He has worked borehole seismic projects in Egypt, shale fracturing jobs in Pennsylvania and drilling operations in west Texas. He is skilled in data analysis, royalty database creation and cash-flow projections. Peter is fluent in Arabic and English. Experience 2 years Mire & Associates, Inc., Houston 2015 present Halliburton, Midland Halliburton, Pittsburg 2014 Schlumberger, Cairo Egypt 2013 Education B.S., Petroleum Engineering The American University in Cairo, 2012