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Oil in the mid-$30s may not be your friend, but you can make it work for you. You may have heard that sentiment before and wondered how true it really was for you and your business. Sure, the downturn isn’t as big of a deal for the big guys; they can weather it or Maybe if there were only a couple of guys on the payroll to worry about.

At Drillinginfo, we have developed a workflow to show you how to thrive in any economic condition. It’s called Well Production Economics and it’s a tool within DI Analytics that streamlines the economic analysis and due diligence process. Estimating production, ROI, and payback period for a potential well used to take days; now it takes minutes to get into a position to succeed with prospects your competitors probably haven’t even considered. This workflow will help you to do more with less, work smarter not harder.

Let’s see how it works.

Predict Well Production

The first step in due diligence is to estimate the level of production we should expect from a specific prospect. In the Well Production Economics workflow, we do that by analyzing historical production from whichever operator, county, or play we are exploring and building custom decline curves.

The Graded Acreage tool in DI Analytics grades acreage quality down to the square mile. We can use this tool to select only wells that are from not only the same category (e.g., county, play), but also the same quality acreage. This will give us the most accurate estimate of future production.

Estimate Expected ROI

Of course, production is not the only factor impacting expected returns. Energy prices, well costs, royalty burdens, taxes, discount rates, etc. are all going ...