Buying existing production with upside potential (e.g. recompleting other zones) is a lower risk option compared to exploratory wells. Because actual production is difficult to argue, transactions based on current cash-flow is straightforward. For the historical and current producing zones, historical oil production can be readily extrapolated to assess the future production. The challenges is to assess the new production that can be added to the greatest rate-of-return.
Data availability is typically a challenge, and many reasonable assumptions are required to make assessments. For basins with stacked oil and gas reservoirs, well log analyses can be used to find additional formations to test. For wells with primary production only, waterflooding can be another option of upside potential. Depending on well locations and geologic interpretations,, infill and delineation drilling may be considered.
Whether it is well log analyses or a waterflood feasibility study, I am able to provide independent evaluations of your property or one you are considering to purchase.
| Behind pipe recompletion potential
Image of baseline projection recompletion
The primary objective was produced for 10 years. A second zone had a show noted on a completion report. |
– Calculate oil/gas in place
– Calculate oil/gas recovery – Forecast production rates – Conduct economic analyses – Behind pipe oil and gas – Infill /development drilling – Recompletions |
