All - I’m trying to determine if other Royalty Owners would be interested in having an EUR analysis, effectively a depletion curve, done on their individual well. As we all know, RO’s do not have access to the Operators/OilCo’s analysis of our wells. It would be very beneficial to know with a high level of probability how long our revenue stream, ie the wells production, will likely continue, for planning purposes. Also, as we know historically the OilCo’s are less than completely accurate or forthcoming with the royalty payment itself - for instance - http://www.mineralweb.com/news/qep-resources-settles-ok-royalty-suit-for-115-million/ . New company called BetaZi offers a more accurate, fast, and an inexpensive service whereby the RO sends production data (preferably 6-24 months worth), and BetaZi will shoot out an EUR of the well, which will give a likely production life of that well. Can I get some feedback? Thank you!
I'm pretty sure this would be absolutely worthless. The average Bakken well declined about 30% a month but one of my operators choked my well back so hard that the well decline stayed flat for 10 months then they opened it up some and production actually rose. In my opinion, this company will give you their best WAG for a fee and I think that if you called the psycic friends network and gave the 24 months info and told them what the industry's general prediction was 700k to 750k for the Bakken, they will give you just as accurate numbers. Best of all, it will take decades to find out if they were even close. Just sayin.
I appreciate the feedback! This company is built on a probabilistic analysis combined with AI (artificial intelligence) that provides for the equivalent of one million petroleum engineers giving analysis, and the band of the answer is a ‘mean’ of those analysis’. The depletion and EUR for a well now is that a firm or an individual PE hand shapes a curve based on their subjunctive and anecdotal experience. That can be off +/- 80%. Extrapolate that over years, and that can be HUGE $ difference. BetaZi is accurate more often in the range of +/- 5%. That knowledge is power - it’s also leverage. My background is credit, and if I’m comfortable with this analysis and methodology, and I’m a lender, I’d lend against those in ground assets, ie revenue stream. Too often we rely on these revenue streams as real income, and not just some lucky money that floats down. Is serious business to know what we have in the ground - and for how long - I my opinion. More feedback please!!! Ty
Chris,
I would guess that in addition to past production numbers, you would need to enter the location (section, zip code, etc), the formation, and maybe even the operator...or perhaps the actual well(s) ID #?? I actually think this would be interesting to know, although I would definitely take it with a huge grain of salt (as RW pointed out). If it were truly inexpensive (like how much?) and more imporatntly if it was secure information, I might be interested.
G Allen
My calculator is an artificial intelligence by that definition. I think most people are familliar with the garbage in garbage out truism. You won't be able to give them enough information for a worthwhile analysis. Sounds like a nice racket though, just close up shop in 10 years and not have to deal with complaints.
G Allen,
We really wouldn’t need the specific location per say … Just the general area. For our generative model, we like to know at least the API umber, in that we eventually will be able to ‘get smarter’ in specific plays or fields, if you will. We will not share anyone’s information any more than a bank would sell your information to a marketer (bad example???). This is nobody’s business but yours. As far as price, we are targeting $1000 per well for the smaller oil companies that can’t afford working with the large Pet. Engineering firms - they’ll charge anywhere from a couple thousand to north of $10k a well (or more). We realize the nature of the royalty owner revenue stream - we ARE RO’s in fact. We’d offer this at $500 per well. If there are several interests per owner across several wells, for instance, we can aggregate the analysis into a single value, and perhaps offer at a slightly lower price per well. What this process generates is an explanation with high probability and which can be projected forward to estimate EUR, Net Present Value, effect of stimulation or shut ins. What other questions might you have? Our website will be up hopefully next week with our contact info, etc.
G Allen said:
Chris,
I would guess that in addition to past production numbers, you would need to enter the location (section, zip code, etc), the formation, and maybe even the operator…or perhaps the actual well(s) ID #?? I actually think this would be interesting to know, although I would definitely take it with a huge grain of salt (as RW pointed out). If it were truly inexpensive (like how much?) and more imporatntly if it was secure information, I might be interested.
G Allen
R w Kennedy,
I know a skeptic when I hear one! Okay, what we can provide a RO is the EUR, it’s well valuation, it’s likely production at various levels of probability (like at 95% probability, or 50%, for example). I ran this on a well of mine which tells me just how long that baby is going to likely last. That’s good to know for a variety of reasons for me. Likely be beneficial to many for many of the same reasons. As far as a racket, you know what’s a racket? Oil companies continuously understating the production (believe what they tell you??), being non-responsive to inquiry from RO’s, underpaying for bonuses, etc … That’s a racket. How about this, RWK - send me a year or two of production that is stated on your royal check(s), and we will do one free for you. In exchange, when you get your results back and we go over them together, and you’re pleased, you go out and help us spread the good word. What do you say? To be clear, that’s me puting my money where my mouth is. Point is, the physics of an oil well or a gas well are the same. We objectively, accurately, automatically and quickly, in an unbiased and physics-based method, project with a high level of certainty what the Estimated Ultimate Recovery of a well is. Looking forward to hearing from you! Ty
r w kennedy said:
My calculator is an artificial intelligence by that definition. I think most people are familliar with the garbage in garbage out truism. You won’t be able to give them enough information for a worthwhile analysis. Sounds like a nice racket though, just close up shop in 10 years and not have to deal with complaints.
Chris Pice, I have 11 wells proven at the moment and I think I can pick one that you will not be able to analyze statistically and would be a sure loser for you. I know this well intimately, having watched for about 5 years. I know several things that wouldn't be readily apparent from production figures alone. Do you really, really, really want me to give you the figures for that well? Because if I do, I will come back after the analysis and show every point that was not taken into account. I do presume that there would be some explanation to go with the number? Because if you are just going to throw out a number, someone wasted alot of time on equipment because I can do that at will sitting here, and the number will have as much correlation to reality as any other number. I figure everyone deserves at least a sporting chance and I do appreciate the sincerity of your offer. Let me know if you still want to do it taking the above into account.
We humbly accept your challenge! I just talked to the BetaZi technical team and they seem to enjoy the idea of a potential failure since they are sure to learn something (scientists … you know).
BetaZi won’t give you one number - it returns a probability distribution - it tells you that the minimum future production from a well that should be expected with 95% (or 65% or 50% or etc.) probability. It fully expects to be wrong 5% of the time. Wells are weird - sometimes things happen that have nothing to do with physics or normal well management.
So yes, please throw it at us. At least we’ll have something fun to put in our gallery!
My email address is cpierce@betazi.com - my last name is actually Pierce ( I hit send before reviewing my details when I signed on ).
Look forward to hearing from you!
r w kennedy said:
Chris Pice, I have 11 wells proven at the moment and I think I can pick one that you will not be able to analyze statistically and would be a sure loser for you. I know this well intimately, having watched for about 5 years. I know several things that wouldn’t be readily apparent from production figures alone. Do you really, really, really want me to give you the figures for that well? Because if I do, I will come back after the analysis and show every point that was not taken into account. I do presume that there would be some explanation to go with the number? Because if you are just going to throw out a number, someone wasted alot of time on equipment because I can do that at will sitting here, and the number will have as much correlation to reality as any other number. I figure everyone deserves at least a sporting chance and I do appreciate the sincerity of your offer. Let me know if you still want to do it taking the above into account.
Ok I'll do it, it's all public information anyway. I would even go so far as to give you the file number but the NDIC website seems to be undergoing construction and I keep getting an error message whether I'm try to look at the map or during a well search. How much do you need last 2 years entries or can I just give you the FILE or API number and you can get them all?
I agree with you that all operators do not produce their wells alike and this alone could cause a massive miss.
Great. Lets figure out the best way to get the best production data for this well. As far as data for two years length, we’d love two have data for that long - we will get a ‘smarter’. That said, we can do this off of 6 months data. Drop me an email and we can connect there and on the phone to strategize. I am suspicious of the reporting of production that oilco’s do - my experience is Colorado … Not good - so if you happen to have production listed on the your royalty check, we can use that, perhaps in conjunction with the NDIC and/or the FILE or API number. Let me know! Thank you
r w kennedy said:
Ok I’ll do it, it’s all public information anyway. I would even go so far as to give you the file number but the NDIC website seems to be undergoing construction and I keep getting an error message whether I’m try to look at the map or during a well search. How much do you need last 2 years entries or can I just give you the FILE or API number and you can get them all?
I agree with you that all operators do not produce their wells alike and this alone could cause a massive miss.
Chris, the NDIC information always matches my checks, why shouldn't it, it's the operator reporting it both times. I hope the NDIC gets back online soon, I wanted to check a well for someone. The NDIC it seems has been doing work on their site as far as I know since 4pm yesterday, when I couldn't pull up the map but I could search sections, today nothing I tried works past login and the home page. I'll get those numbers to you when I can.
Sounds good - you’ve got my email. Look forward to hearing what you find. Thanks!
r w kennedy said:
Chris, the NDIC information always matches my checks, why shouldn’t it, it’s the operator reporting it both times. I hope the NDIC gets back online soon, I wanted to check a well for someone. The NDIC it seems has been doing work on their site as far as I know since 4pm yesterday, when I couldn’t pull up the map but I could search sections, today nothing I tried works past login and the home page. I’ll get those numbers to you when I can.
Thank you. The label for what each column represents got cut off. Can you resend or just list what the columns read from left to right? Thanks!
r w kennedy said:
if I did it right this should be a good sample.
R W, did I lose you? Just want to confirm the headers on the top of that page. Let me know if I can help. Best, Chris
Chris Pice said:
Thank you. The label for what each column represents got cut off. Can you resend or just list what the columns read from left to right? Thanks!
r w kennedy said:if I did it right this should be a good sample.
Sorry chris, the first column is days, followed by bbl oil, bbl water, mcf gas sold and mcf gas produced.
Want to make sure - top row: days (31), bbl oil 2513, bbl water 2839, mcf gas sold 448, mcf gas produced 4042. Leaves two more columns, 3882 of ?, and lastly 160 of ?. Did I get that right? Thanks!
r w kennedy said:
Sorry chris, the first column is days, followed by bbl oil, bbl water, mcf gas sold and mcf gas produced.
This is good entertainment. I'm following this thread !! ha ha !
Hi Lori B. We aim to please! Do you have any thoughts or questions? Just let me know! Best, Chris
Lori B said:
This is good entertainment. I’m following this thread !! ha ha !