VISAGE and geoLOGIC are happy to welcome Mark Haggerty, from Headwaters Economics as our guest blogger today. We are presenting a preview of a report expected out in the next few weeks.

Headwaters Economics is an independent, non-profit research group based in Bozeman, MT.  Their mission is to improve community development and land management decisions in the West.  Headwaters blends innovative research techniques and extensive on-the-ground experience working with a range of partners across the West for more than 20 years. Here is Mark’s posting…

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Headwaters Economics is using data from geoLOGIC Data Center and assistance from VISAGE to examine how US States differ in the amount and timing of tax collections on unconventional oil. 
The current oil boom has brought extensive changes to the rural, sparsely populated region of western North Dakota. Despite the benefits of jobs, tax revenue, and royalties, many communities are feeling overwhelmed by the rush of rigs and workers from out of state. 
Worries that current policy may not be making the most of this exceptional opportunity have prompted discussions in the North Dakota state legislature about how changes to tax policy could help the state and communities better manage the boom. 
Applying data and assistance from VISAGE and geoLOGIC Data Center, Headwaters Economics has analyzed how North Dakota, Colorado, Montana, and Wyoming approach the collection and distribution of energy revenue in the context of the unconventional oil boom.  The goal of the research is to provide decision makers in each state with good information upon which to make better decisions. 

By Bertrand

VISAGE is proud to announce that we are a Technology Stars 2011 winner for Best Exploration Technology. Check out the articles in the New Technology Magazine and the Oil & Gas Inquirer.
The Western Canadian Sedimentary Basin is second to none in terms of the sheer volume of information that is readily available to the industry. This information has become an increasingly important resource in developing an understanding of plays and technical concepts. With the right tools this information can be used to narrow your focus and make “quick & accurate decisions that are well researched”. Kory Galbraith, VP of Engineering at Elkhorn Resources, took advantage of VISAGE’s visual analysis technology to analyze data from the geoLOGIC Data Center “to screen exploration areas in building its business plan”.  With the development of our most recent public data analysis capabilities, clients are using VISAGE as a “data exploration tool” to garner insights and make decisions that help them to optimize new and existing production opportunities.

In appreciation of this award we would like to extend our thanks to those that contributed to our success:

• Kory Galbraith at Elkhorn for nominating us for this award
• our visionary clients who constantly strive for better technology and inspire us to build it
• geoLogic for working with us to realize the potential of VISAGE analysis capabilities when combined with the geoLOGIC Data Center
• Garry Wilton and colleagues at KPMG Calgary for their assistance in helping us understand and benefit from SR&ED
• Brooke Campbell and James Jensen for their marketing and creative talents displayed in our website

By Bertrand

(Part of a joint series combining the power of VISAGE visual analytics software with geoLOGIC’s value-added data live from the gDC)

Today’s blog will cover quite a spectrum of information including The Montney Players, the top wells, type curves and maps generated by taking VISAGE percentile information and plotting it in geoScout. So let’s jump right in….

The Montney Players

The top 12 companies (18% of the companies in the Montney) accounted for 90% of May’s production. Those same 12 companies have 79% of the producing wells. The chart below shows a breakdown of all of the producers with the following information being shown:  COMPANY (producing well count): (mmcf/day) % of Total production

By Bertrand

(Part of a joint series combining the power of VISAGE visual analytics software with geoLOGIC’s value-added data live from the gDC)

The evolution of the Montney has varied significantly between Alberta and BC. A good comparison of these provinces would be a long distance runner vs a sprinter. Alberta’s production has been quite steady since 1996, with slight deviations from its average production of 263 mmcf/day (peaking at 406 mmcf/day in Aug 2010). BC however has come out of the gate like a sprinter, averaging an 80% increase in production year over year since 2006. BC production rates surpassed Alberta for the first time in Feb 2009 and continued to grow to 3.5 times that of Alberta in May 2011. However, Alberta is ahead in terms of the total gas produced to date in the Montney, accounting for 69.4% of the 2,456 bcf of cumulative gas produced. So, if both provinces were to sustain the May 2011 rates how long would it take for BC to surpass Alberta in terms of cumulative Montney production? The answer is September 2014.

The big game changer in all of this is horizontal drilling technology. The 801 horizontal wells account for 89.6% of current production rates. 70% of the horizontal wells currently producing are in BC. The number of producing horizontal wells has had an average increase of 221% since 2007. Will 2011 numbers keep up with this pace?

So let’s take a look at the full Montney in a series of charts…

The Growth of Horizontal Wells

May 2011 production summary:
801 horizontal wells producing 1306 mmcf/day (89.6% of production) 
455 vertical wells producing 87 mmcf/day (6.6% of production)
266 deviated wells producing 60 mmcf/day (4.1% of production)
26 crooked wells producing 5 mmcf/day (0.3% of production)

By Bertrand

(Part of a joint series combining the power of VISAGE visual analytics software with geoLOGIC’s value-added data live from the gDC)

There will be 2 more Montney blog posts coming up in the next week here at VISAGE and geoLOGIC.

My original intention today was to provide you with a detailed overview of the Montney Play. That was until a significant drop in BC Montney gas production caught my eye… so I have decided to focus on that for today’s blog. 

Montney Now Accounts for 30% of BC’s Gas Production
In the last 4.5 years, Montney has grown from 2.5% of BC’s Gas production to just over 30%. Of the recent 12.7% drop in BC gas production, Montney accounts for 32% of that. So what is triggering this drop in production and who in the Montney has been affected? The key contributor was a temporary shut-in due to the scheduled McMahon gas processing plant turnaround. 

By Bertrand

I’d like to start by thanking the gDC (geoLOGIC Data Center) and geoLOGIC Systems for supporting this blog by providing VISAGE with access to their data…. and now for the blog…..

In our previous blog post we looked at the growth of the Bakken and who the main players are.  When looking at type curves and the variability of the associated data, it becomes very clear that there are many, many factors that need to be considered when doing type curves. The most important consideration is the selection of wells that are comparable and representative of a particular location or situation.  Some things to consider in the Bakken are leg count, frac count (if any), horizontal length, location, horizontal azimuth …. and the list goes on. We’ll show you how the horizontal Bakken wells (since 2007) collectively behave and how much they vary. We can hone in on some more specific analyses with your help (please post your comments).

Take 1: Type Curve (Rate vs Time)
 

This chart shows the following for Bakken Horizontal Wells post Jan 2007:

By Bertrand

The Growth of the Play
The Bakken has been a hot play in recent years and has grown to almost 70,000 bbl/day oil production (in SE Saskatchewan). Almost all of the Bakken growth is attributable to horizontal wells. Here are a few stats:
Well Stats
Total number of Bakken wells that have produced in SE Sask = 2178
88% of these wells came on production since Jan 2007

• 2020 Horizontal Wells
• 150 Vertical Wells
• 6 Deviated Wells
• 2 Crooked Wells

Production Stats
Current Bakken Production is 69,916 bbl/day oil.
19% of that production came on stream in the first 3 months of 2011 (13,292 bbl/day).
The biggest production growth in one year was 2008, a production rate increase of 41,335 bbl/day by Dec 2008.
If production growth continues at the same rate, we can expect 2011 production increases to

By Bertrand

A production type curve is a representative production profile of a well for a specific play and/or area. That is, if you were going to drill a successful well in an area, a type curve would be the “best representation” of the expected production forecast. The type curve is (typically) established by calculating the average production rate of producing wells for each time period. You will never drill a well that behaves like the type curve, but it does give you a tangible representation of the likely outcome. Type curves are also very useful for comparing the “average production rates” of plays, companies, well types … something we will be doing in subsequent blogs. Here is an example of what you can look forward to:
 

Normalized type curve analysis (rate vs time) provides a consistent comparison tool for production. Often used for well analysis (e.g. frac count, horizontal length, azimuth), normalized type curves are also valuable for comparing companies. This chart shows how several companies compare to one another and to the play average.

So What Is The Problem With Production Type Curves?
The problem with type curves is that the range of values used to calculate the average (type curve) are in no way represented in the type curve. I have a client who tries to understand the range of values that make up the type curve by showing all of the wells on one chart. As you can see, it does give you a sense of the range of values, but is a bit messy to look at. Maybe there is a better way to communicate and understand this?

By Bertrand

A picture is indeed worth a thousand words and in the case of the examples posted in this blog by geoLOGIC Systems, it is worth more than 20 million rows of data. The VISAGE team is excited to partner with geoLOGIC for an upcoming blog series exploring the Western Canadian Sedimentary Basin. We will be exploring plays, provincial production trends, type curves, cumulative probability distributions and generally taking you on a visual analytics journey. It’s the pertfect partnership… geoLOGIC has the public data in the gDC (geoLOGIC Data Centre) and VISAGE has the visual analytics capabilities.

We invite you to participate by telling us what you would like to see in this series. If you have an idea please let us know at info@visageinfo.com.

In the mean time here are some examples to whet your appetite.

Alberta has had 310,961 wells that have produced oil or gas. In this chart we can see oil production in Alberta since 1962 grouped by on-production-year (i.e. each coloured band represents the production for wells that came on stream in a particular year).

Saskatchewan has become a major player in oil production in the WCSB. Also note the peaks and consider the role oil price has had in defining these peaks.

This shows a breakdown of historical gas production in the WCSB and denotes the top 14 producers. Note the impact that release from gas storage has had on recent production increases.

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Special thanks to geoLOGIC systems for providing VISAGE access to data from the gDC (geoLOGIC Data Center)

By Bertrand