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Case Studies

Benchmarking Investment Opportunities in Major Resource Plays

A consortium of resource companies required independent expertise to review more than 1 million acres of opportunity. The purpose of the assessment was to determine whether it was plausible to describe the stratigraphic zone as a potential shale/tight oil reservoir and, if warranted, to provide a volumetric assessment.

Project Highlights

  • +$100 million investment decision
  • Insights based on thousands of hours of engineering and geology analysis
  • Informed investment decisions based on independent analysis
  • Using the right data cut the decision timeline by +50%

Challenge

  • Looking at deploying an investment of over $100 million, a hedge fund identified two resource plays as long-term investments
  • Several target companies in these plays were considered, but a direct comparison of future potential was challenging because:
    • The plays cover a very large aerial extent, with variable reservoir quality, multiple developable layers and changing fluid compositions
    • The companies used different drilling and completion techniques, making it difficult to benchmark
    • Techniques have changed over time due to technological advances

Solution

  • Sproule compared the developed and undeveloped land base of seven different companies using public data along with Sproule’s Type Curve Analysis database
  • Drilling and completion techniques, cost structures and production profiles were compared for each company within each area
  • Economic key performance indicators by company and area were compared, and potential future drilling locations were identified

Value

  • The forecast results provided the client with the necessary analysis and insights to make an informed investment decision
  • By augmenting proprietary data with information from Sproule’s Type Curve Analysis database, the client was able to save significant time and cost



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Steven Golko, P.Eng.
Senior Vice President, Consulting Services

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