In a recent post, we provided a 30,000-foot view of our MarketView FundamentalsⓇ (MVF) solution suite that delivers all the information energy and commodities traders and analysts need to make quick, well-informed decisions. This information includes forecasts, market predictions, and proprietary data (i.e., daily rig count). There are six Commodity Data Solutions (CDS) products available in a single tab in the MarketViewⓇ Desktop™ platform. Asking us to choose our favorite is like asking parents to choose their favorite children — that’s impossible. Over the next few weeks we will give you a closer look at each one, starting today with DI ProdCast, our natural gas, crude, and NGL production forecasting software that offers the most dynamic functionality in the market.
ProdCast features a guidance-based forecast for more than 70 operators that incorporates CAPEX, number of wells drilled/completed, etc., and calculates operator-level breakeven economics. As you can see in the screenshot below, it also forecasts long-term production based on 300+ breakouts of producing areas across the country down to the Basin/Play/Subplay/Tier level.
ProdCast is an interactive platform that enables users to run their own scenarios by utilizing user-defined inputs for key forecast variables in order to better understand and quantify forecast sensitivities. Users can change assumptions, run their own price scenarios, and construct detailed sensitivity analyses.
Our short-term forecast is our best prediction of near-term (up to 24 months) production volumes. We forecast short-term production by constructing well type curves for each of the 70+ operators from well-level data reported to the state, constructing drilling schedules based on reported CAPEX plans, and accounting for infrastructure bottlenecks. Our forecasts reflect reported operator plans and observed well results.
After many years of expansive growth, the E&P sector in recent months has abruptly pivoted to the theme of ‘living within cash flows.’ Today’s investors are skeptical of E&P despite the recent commodity prices rebound. As such, companies are looking to return cash in the form of buybacks and dividends, which comes at the expense of CAPEX. Drillinginfo analysts closely track the guidance of all public E&P’s, which makes ProdCast’s short-term forecast uniquely powerful. Users have the ability to compare CAPEX guidance solutions to purely economics-based forecasting. The results are significant.
Using only economics-based decision making, other forecasting tools can miss by as much as ~300k bbl/d.
Our long-term forecast is designed based on the assumption that, in the long-run, positive cash flow will dictate behavior and economic wells will get drilled, while uneconomic wells will not. We have broken the country out into 300+ areas and modeled type curves and economics for each one.
All of our assumptions are transparent, and users have the ability to adjust the key inputs most important to them, including commodity price strips, minimum acceptable rate of return, drilling and completion costs, and type curve efficiencies. Key price thresholds where supply either increases or decreases dramatically are easy to identify, the impact to a specific basin or area is clear, and a deep understanding of the economics of production are at the users’ fingertips.
Another feature that sets ProdCast apart from other solutions in the market is the crude quality map, as seen below. It provides a detailed view of the API gravities that are most prominent by basin to determine the specifications for their pipeline projects.
ProdCast represents the integration of Drillinginfo’s unmatched volume of industry data and expertise to enable users to quickly and accurately perform in-depth market fundamental analysis and gain actionable intelligence.
To learn more about ProdCast and the other solutions that comprise MarketView FundamentalsⓇ, visit: https://www.marketview.com/our-solutions/marketview-fundamentals/.