Unconventional gas plays are often risky. To help understand the uncertainty inherent in these plays, probabilistic estimated ultimate recoveries (EUR's) can be employed. Once sufficient production data are available for a given play, production based probabilistic EUR's can be constructed. Meaningful economics require introduction of a time component to such probabilistic EUR's. This study does so in two ways. First, detailed production data are used to construct probabilistic distributions for annual gas volumes. Secondly, probabilistic gas price distributions are constructed from pertinent histories. Distributions of gas volumes and prices are then coupled in Monte Carlo simulations to generate probabilistic economics. Examples are presented using production data from Raton coal gas and the Whiskey Buttes (Frontier Formation, low permeability gas field) in conjunction with Henry Hub and CIG price distributions.
Gas resources held within low permeability sandstones, shales, and coals are commonly referred to as unconventional gas plays. These plays are characterized by widely varying well behaviors, with offset wells frequently exhibiting rates and recoveries differing by an order of magnitude, conflicting laboratory and wireline log results, and are often best understood from a statistical perspective. Economics of gas production from these reservoirs must consider both the wide variations in well behavior noted above but also account for gas price fluctuations. While many workers have recognized the statistical nature of the economics of unconventional gas production, few have attempted to treat it in detail.
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