BEG Friday Seminar Series
||March 27, 2015 at 9:00 am
||March 27, 2015 at 10:00 am|
| ||Location:||BEG Main Conference Room; Building 130; PRC Campus|
| ||Contact:||Sophia Ortiz, email@example.com, 512.475.9588|
| ||URL:||Event Link|
Dr. Svetlana Ikonnikova
Bureau of Economic Geology
There are an increasing number of geologists and engineers that have become involved in shale gas research. However, the current fall in oil prices demonstrates how much the demand and funding for our research depends on energy prices. This talk will discuss in what way and to what extent shale gas drilling and profitability depends on economic parameters and how much it relies on other non-economic variables.
The talk will start with an overview of the key drivers for new shale gas/oil well drilling based on the discounted cash flow model. We will review the value of liquids, sensitivity to the natural gas price, and economic limit. Then, we will dig deeper and look at how operators may adjust to prices and keep their profitability by managing completion costs and by rationing drilling locations. The objective is to show in simple terms how economic parameters are integrated with engineering and geologic knowledge to support operator’s decision to drill. The role of geologic uncertainty as well as the knowledge of the major geologic attributes will be addressed.