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Understanding Contingent Resources – GLJ Petroleum Consultants Ltd.

GLJ Petroleum Consultants Ltd. · Aug 12, 2015 · 32 slides

Investor presentation from the Shale Experts oil & gas presentation and slide database. Every page is imaged and its text indexed for search across operators, plays, basins and time.

Slides

  1. Understanding Contingent Resources – GLJ Petroleum Consultants Ltd. – slide 1
    Understanding Contingent Resources Prepared for REU Houston 2015 Keith Braaten August 12, 2015
  2. Understanding Contingent Resources – GLJ Petroleum Consultants Ltd. – slide 2
    Contingent Resources 1. What are contingent resources 2. Why do we need contingent resources 3. How do we sub-classify and risk contingent resources 4. How do contingent resources become reserves 2
  3. Understanding Contingent Resources – GLJ Petroleum Consultants Ltd. – slide 3
    Acronyms ROTR Resources Other Than Reserves PRMS Petroleum Resources Management System COGEH Canadian Oil & Gas Evaluation Handbook SEC United States Securities Exchange Commission ASC Alberta Securities Commission SAGD Steam Assisted…
  4. Understanding Contingent Resources – GLJ Petroleum Consultants Ltd. – slide 4
    Resource Classification Framework PRODUCTION INITIALLY-IN-PLACE (DPIIP) COMMERCIAL RESERVES INITIALL-IN-PLACE (TPIIP) 1P 2P 3P Increasing Chance of Commerciality DISCOVERED PETROEUM INITIALLY Proved Probable…
  5. Understanding Contingent Resources – GLJ Petroleum Consultants Ltd. – slide 5
    Definition of Contingent Resources CONTINGENT RESOURCES are those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations using established technology or technology under development,…
  6. Understanding Contingent Resources – GLJ Petroleum Consultants Ltd. – slide 6
    Contingencies 1. Legal 2. Regulatory 3. Market Access 4. Political Factors 5. Social License 6. Economic 7. Commitment to Develop 8. Development Timing 6
  7. Understanding Contingent Resources – GLJ Petroleum Consultants Ltd. – slide 7
    Canadian Disclosure of ROTR 2003/04 2012/13 Source: ASC Oil and Gas Review Report December 2014 7
  8. Understanding Contingent Resources – GLJ Petroleum Consultants Ltd. – slide 8
    Conventional Resource Progression Prospect Discovery Project Prospective Contingent Reserves Resources Resources 8
  9. Understanding Contingent Resources – GLJ Petroleum Consultants Ltd. – slide 9
    Unconventional Resources Montney Development Entire township is discovered 22 Sections (shaded green) could be assigned reserves Drill 12 wells/section Total 264 wells 62 wells drilled 202 undeveloped locations 9
  10. Understanding Contingent Resources – GLJ Petroleum Consultants Ltd. – slide 10
    Unconventional Resources Montney Development 14 Sections (shaded red) classified as contingent resources Drill 12 wells per section Total 168 wells 10
  11. Understanding Contingent Resources – GLJ Petroleum Consultants Ltd. – slide 11
    Unconventional Resources Lets say we get 5 Bcf/well in this township then: Reserves Developed 2P Reserves = 62 5 = 310 Bcf Undeveloped 2P Reserves = 100 5 = 500 Bcf Total 2P Reserves = 810 Bcf Resources Contingent 2C Resources = 270 5 =…
  12. Understanding Contingent Resources – GLJ Petroleum Consultants Ltd. – slide 12
    Importance of Contingent Resources For unconventional resource plays, contingent resources can quickly grow to volumes that dwarf reserves Managers need to have contingent resources quantified for portfolio management Investors…
  13. Understanding Contingent Resources – GLJ Petroleum Consultants Ltd. – slide 13
    Project Maturity Subclasses ROTR From COGEH Volume 2, Section 2.4.7, Figure 3 13
  14. Understanding Contingent Resources – GLJ Petroleum Consultants Ltd. – slide 14
    Project Maturity Subclasses Contingent Resources Development Development Development Development Pending On Hold Unclarified Not Viable Increasing Chance of Development 14
  15. Understanding Contingent Resources – GLJ Petroleum Consultants Ltd. – slide 15
    Risking Contingent Resources Chance of Commerciality = Chance of Discovery Chance of Development For Contingent Resources: Chance of Discovery = 1.0 Therefore: Chance of Commerciality = Chance of Development 15
  16. Understanding Contingent Resources – GLJ Petroleum Consultants Ltd. – slide 16
    Development Pending Contingent Resources Development Development Development Development Pending On Hold Unclarified Not Viable Contingencies are being actively pursued Resolution expected Increasing Chancein of reasonable…
  17. Understanding Contingent Resources – GLJ Petroleum Consultants Ltd. – slide 17
    Development On Hold Contingent Resources Development Development Development Development Pending On Hold Unclarified Not Viable Major non-technical contingencies identified Reasonable chance Increasing of development Chance of…
  18. Understanding Contingent Resources – GLJ Petroleum Consultants Ltd. – slide 18
    Development Unclarified Contingent Resources Development Development Development Development Pending On Hold Unclarified Not Viable Project is currently under active evaluation Significant further appraisal Increasing Chance…
  19. Understanding Contingent Resources – GLJ Petroleum Consultants Ltd. – slide 19
    Development Not Viable Contingent Resources Development Development Development Development Pending On Hold Unclarified Not Viable Contingencies have been identified Project wasIncreasing evaluatedChance and considered not…
  20. Understanding Contingent Resources – GLJ Petroleum Consultants Ltd. – slide 20
    Economic Status Project Maturity Sub-Class Economic Status Contingent Resources Development Pending Economic Development On Hold Economics Development Unclarified Undetermined Development Not Viable Sub-Economic…
  21. Understanding Contingent Resources – GLJ Petroleum Consultants Ltd. – slide 21
    Recovery Technology Status Established Technology Repeated commercial success of a recovery process Technology Under Development Established technology in reservoirs that are not good analogues to the subject reservoir Experimental…
  22. Understanding Contingent Resources – GLJ Petroleum Consultants Ltd. – slide 22
    Recovery Technology Status Recovery Technology Project Maturity Sub-Class Contingent Resources Status Development Pending Established Technology Development On Hold Development Unclarified Established Technology Technology…
  23. Understanding Contingent Resources – GLJ Petroleum Consultants Ltd. – slide 23
    Risk Assessment Montney Development 102 locations classified as contingent resources Contingencies are: Timing Commitment Contingencies are controlled by the operator Sub-Classify as Pending Development 23
  24. Understanding Contingent Resources – GLJ Petroleum Consultants Ltd. – slide 24
    Chance of Development Legal Factor = 1.00 Regulatory Factor = 1.00 Market Access Factor = 1.00 Political Factor = 1.00 Social License Factor = 1.00 Economic Factor = 1.00 Commitment to Develop Factor = 0.90 Development Timing Factor =…
  25. Understanding Contingent Resources – GLJ Petroleum Consultants Ltd. – slide 25
    Risk Assessment Montney Development 168 locations classified as contingent resources Contingencies are: Timing Commitment Development is well into the future, development plan is conceptual therefore risk is higher…
  26. Understanding Contingent Resources – GLJ Petroleum Consultants Ltd. – slide 26
    Chance of Development Legal Factor = 1.00 Regulatory Factor = 1.00 Market Access Factor = 1.00 Political Factor = 1.00 Social License Factor = 1.00 Economic Factor = 1.00 Commitment to Develop Factor = 0.80 Development Timing Factor =…
  27. Understanding Contingent Resources – GLJ Petroleum Consultants Ltd. – slide 27
    Conventional Resource Progression Prospect Discovery Project Prospective Contingent Reserves Resources Resources 27
  28. Understanding Contingent Resources – GLJ Petroleum Consultants Ltd. – slide 28
    Chance of Discovery Source = 1.00 Migration = 1.00 Trap = 0.70 Seal = 0.70 Reservoir = 0.80 Chance of Discovery = 0.392 28
  29. Understanding Contingent Resources – GLJ Petroleum Consultants Ltd. – slide 29
    Chance of Development Legal Factor = 1.00 Regulatory Factor = 0.90 Market Access Factor = 1.00 Economic Factor = 0.80 Commitment to Develop Factor = 0.80 Development Timing Factor = 1.00 Chance of Development = 0.576 Chance of…
  30. Understanding Contingent Resources – GLJ Petroleum Consultants Ltd. – slide 30
    Converting Resources to Reserves When contingencies are resolved, contingent resources are reclassified to reserves: 1C to 1P 2C to 2P 3C to 3P 30
  31. Understanding Contingent Resources – GLJ Petroleum Consultants Ltd. – slide 31
    Understanding Contingent Resources Questions 31
  32. Understanding Contingent Resources – GLJ Petroleum Consultants Ltd. – slide 32
    Understanding Contingent Resources Thank You Keith Braaten T: (403) 266-9515 Email: kbraatengljpc.com www.gljpc.com 32

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