Ramona Hovey, Senior VP at DrillingInfo, talked at SMi’s 3rd annual Unconventional Gas conference in London this past week. The convention was March 15th-16th and featured speakers from different aspects of the industry to discuss unconventional plays in the US and around the world. Hovey’s talk, titled “Applying Lessons Learned in Evaluating the Barnett Shale to Other Global Shale Plays,” touched on some of the in depth research DrillingInfo Energy Strategy Partners has done in the Barnett Shale to show concepts that operators can use when evaluating new shale plays around the world. Three of the points I took from the talk were 1) all rock in “resource” plays is not created equal, 2) all operators are not created equal, and 3) operator learning curves can negatively skew play success indicators such per well averages.
First, the idea that not all rock in a play is created equal is fundamental in approaching these unconventional plays. Because of this concept it is necessary to be able to differentiate good acreage from bad acreage within a play. By “grading” the acreage in the Barnett Shale using formation thickness and gas-to-oil ratio (GOR) as a proxy for thermal maturity DrillingInfo Energy Strategy Partners has been able to quantify an expectation of success depending on the area of activity as seen in the map below of the Barnett Shale.
Second, all operators are not created equal is also a fairly simple idea. The challenge then is to determine which operators are more successful than their peers. Hovey proposes that using their grading system, GPA, you can normalize acreage quality and determine operator performance based on a level playing field. Below are 2 graphs, the first one is not normalized and it appears that Range resources is more successful than EOG but we can see in the second graph, when normalized based on the same acreage grade, EOG actually out performs Range.
Lastly, operator learning curves can negatively skew play success indicators such per well averages. There is a distinct operator learning curve in these unconventional shale plays and this idea is crucial when evaluating these plays. This concept is evident in the following graph of Devon’s Barnett Shale wells.
To get more information about the Barnett Shale or to get the full presentation, visit the DNA Barnett Shale folder.
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