S O L U T I O N S
B R I E F
IDENTIFYING PROFITABLE DRILLING LOCATIONS
IN A LOW-PRICE ENVIRONMENT
WELL PRODUCTION ECONOMICS WORKFLOW
DRILLING OR INVESTING IN A PROFITABLE WELL IS A COMPLICATED PROCESS. WHEN
OIL PRICES ARE HIGH, IT IS POSSIBLE TO BE PROFITABLE ACROSS MANY PLAYS AND
EVEN IN LOW-GRADE ACREAGE. IN A LOW-PRICE ENVIRONMENT, HOWEVER, IDEAL
WELL LOCATIONS BECOME MORE CRITICAL THAN EVER.
“
Now, more than
ever, we need to be
confident about our
production estimates
before investing in an
operator. The Well
Production Economics
tool does in five minutes
what used to take me
five days. These are
investable ideas
“
Manager, Hedge Fund
The Drillinginfo Well Production
Economics tool allows customers
to quickly understand whether a
potential well in a specific play or
county or with a specific operator
would be profitable. Easily estimate
after-tax IRR, payback period, and the
impact of changing variables such
as oil price and well cost, and decide
whether a prospect warrants further
due diligence.
BENEFITS
Quantify Return on Drilling a New
Well
Create decline curves based on
historical production and variables
such as peak rate oil. Build cash
flow models based on customized
variables such as price of oil, well
costs, taxes, and royalty burden.
Estimate before- and after-tax rate of
return at a specific oil price and how
they would be affected by changing
prices.
Estimate Break-Even Point
Estimate the point in time at which
a potential well will break even.
Generate economic outputs based on
specified oil price, well cost, monthly
OPEX, discount rate, etc. Chart
undiscounted cash flow by month and
cumulatively.
Visualize the Impact of Changing
Variables
The oil and gas industry is highly
dynamic. Create graphs that estimate
how after-tax returns will vary as oil
price or well cost changes.
Compare Multiple Operators
Estimate an operator’s profits in
relation to the competition. View
side-by-side analyses of expected
returns, break-even points, and how
sensitive each operator is to well
cost and oil price. Easily predict
which operator would be a better
investment.
Learn more at www.drillinginfo.com
S O L U T I O N S
Well Production Economics workflow
BEGIN YOUR DUE
DILIGENCE HERE
• Drillinginfo is the
only provider of an
integrated solution
that provides software
and analytics-grade
data in a single
application
• Eliminate timeconsuming
data gathering,
manipulation, and
integration
• Understand the
financial impact of
drilling a well and
quantify the potential
return on investment
B R I E F
WORKFLOW STEPS
Well Production Economics is a
powerful, yet simple, workflow. In a
few easy steps, users can estimate
IRR, payback period, and oil price
and well cost sensitivities for a well
by operator, county, or play.
1. Build custom decline curve
based on wells from specific
play, county, operator, etc. and
customize inputs
2. Generate EURs
3. Build cash flow model based
on specified oil and gas prices,
well cost, discount rate, taxes,
royalty burden, etc.
4. Generate economic outputs for
IRR, payback period, and ROI
5. Chart total undiscounted cash
flow and undiscounted cash
flow per month
6. Chart oil price and well cost
sensitivities
7. If desired, compare
performances for multiple
companies, plays, counties, etc.
Oil Production
Type Curve
(bbl/day)
• Identify the
most promising
opportunities for
further due diligence
faster than ever
Gas Production Type
Curve (mcf/
day)
The green line on the type curve represents well count, the
purple line represents historical production of the wells covered,
and the blue line is the decline curve
Copyright © 2015, Drillinginfo, Inc.
S O L U T I O N S
Well Production Economics workflow
B R I E F
Sensitivity charts show the impact on financial returns from changing just one
variable and keeping all other inputs the same
CUSTOMER PROBLEM
How long will it take for a new well to break even?
At what oil price is it economic to drill in a given play?
How does one operator’s decline curve and EUR compare to
others’ in a play?
Is it profitable to drill a new well in a given play/county/
lease?
What is the expected economic lifecycle of a well, assuming
a cutoff of X barrels per month?
BENEFIT
Quantify point in time when investment will
break even
Maximize ROI
Benchmark against competitors
Minimize risk in new ventures
Estimate ROI
Learn more at www.drillinginfo.com
S O L U T I O N S
Well Production Economics workflow
PRODUCT HIGHLIGHTS
ABOUT DI ANALYTICS
▪▪ Comprised of three core modules: DI Analytics Core,
DI Analytics Graded Acreage, and DI Analytics
Production Scenario
▪▪ Lease and permit data for more than 500 counties
▪▪ Ability to visualize leasing, permitting, and
production trends across plays, counties, and
operators
▪▪ Identify leases that are expiring soon and deals that
have not yet been marketed
▪▪ Normalized geology to make apples-to-apples
comparisons of operators drilling in reservoirs of
different quality
▪▪ Identify over- and under-performing operators and
potential acquisition targets
▪▪ Oil and gas economic analysis
▪▪ Analytics-grade data
B R I E F
Uncover hidden value through the analytics-grade data
in DI Analytics. DI Analytics is a comprehensive product
comprised of three modules that combine to help users
answer the “who”, “what”, “where”, and “why” of
current production, estimate future production, and find
new opportunities.
With DI Analytics Core, be among the first to know about
new oil and gas opportunities. Easily locate leases that
are expiring soon and find deals that haven’t even been
marketed yet. Drillinginfo offers complete lease and
permit data for more than 500 counties.
DI Analytics Graded Acreage helps users identify ideal
investment opportunities. Using a patented, proprietary
system, Drillinginfo has normalized the geology within a
reservoir so customers can make an apples-to-apples
comparison of operators. Identify which operators are
under- or over-performing, evaluate reservoir quality
associated with a lease, and identify targets for oil and
gas acquisition/divestiture.
Run oil and gas economic analyses easier and faster
than ever with the DI Analytics Production Scenario
module. Using the pre-loaded analytics grade data from
Drillinginfo, build custom decline curves, run sensitivity
analyses, and predict ROI and payback period for wells by
operator, county, play, etc.
PROACTIVE
EFFICIENT
COMPETITIVE
Learn more at www.drillinginfo.com
By monitoring the market, Drillinginfo
continuously delivers innovative oil &
gas solutions that enable our customers
to sustain a competitive advantage in
any environment.
Drillinginfo customers constantly
perform above their competitors
because they are more efficient and
more proactive than the
competition.
Learn more at www.drillinginfo.com
SB_Well Economics-08; 06/15/16