Based on North American shale gas basins, early stage development is characterized by a composite of several experience curves in terms of operations, resource assessment, and infrastructure development. More specifically, the learning curve for the operator grows as operational characteristics are fine-tuned, such as experience ramp-up, logistics and supply chain optimization, and factory-style operations. Then technical understanding of the basin grows as operators learn how to best land the lateral in the pay zone, where to perforate the formation, how to execute optimal lateral length and number and size of frac stages, and where the sweet spot is relative to asset positions with marginal economics. Finally, supporting infrastructure must grow to keep pace with development growth, which is also influenced by the fine tuning of supporting policy and regulations, resulting wellhead costs, and market factors. The aforementioned experiences are fundamentally applicable to unconventional development in the Middle East. For this analysis we have created a field-wide shale gas economic model as an extension of our original single-well economic model that captures the various phases of unconventional resource development. After testing this model against various North American shale basins with adjusted local factors, it has been extended to assess basin-wide economics for the Middle East region. The results ultimately shed light on feasible development schemes in the Middle East including the economic return necessary to attract further exploration investment.
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