Professional Documents
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MARCH 2015
ALLOCATED PRODUCTION
WHITE PAPER
What is Allocated
Production?
2014 IHS
Unallocated vs
Lease-level
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NOTE: When you query Production Allocated for Texas, you will get the allocated Crude Oil production
and also the Gas well production that is reported at the well level and does not require any allocation.
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Example:
Lease-Level Production
vs
Allocated By Well Production
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Notice how the production history has numerous small peaks as new wells come online.
IHS has a single Primary API number for this lease. It is a representative well. The Unallocated record
also has the other 8 well API numbers associated on the lease and these are included in exports and
downloads.
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Unallocated Production
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Production Data
Reporting Levels
on Enerdeq
Browser
Completion
Production reported for a reservoir in a single
well
Entity type on Enerdeq output listed as Well
Lease
Production reported by Lease and includes
volumes from all producing wells
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Production Data
Reporting Levels
on Enerdeq
Browser
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Primary API number for an Lease production is just ONE well. There could be
many other API numbers associated with this lease.
Allocated Production
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Primary API number for an Allocated entity is for the one well being allocated
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Key Concept:
Total of all Allocated Volume equals the Unallocated Volume
IHS allocation method always has the sum of volume of allocated entities
for a lease equal the unallocated volume for that lease
Example: Smith Lease with 2500 Barrels monthly volume
Allocation routine uses well tests to assign 35% of production to Smith
#1, 45% of volume to Smith #2 and remaining 20% to Smith #3. The
Total of all wells is 100% and the volume equals the lease-level volume.
IHS ALLOCATION ROUTINE
35 %
Well Level
Smith # 1
VOLUMES
875 BBLS
2014 IHS
45%
Well Level
Smith # 2
VOLUMES
1125 BBLS
Well Level
Smith # 3
VOLUMES
500 BBLS
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Key Concept:
Allocation is highly
dependent on good
well test info
What is an Allowable?
The amount of oil or gas which a well or
lease may produce per month under
proration orders of the RRC
2014 IHS
Key Concept:
IHS runs allocation
every month and
prior months will
change volumes
2.
IHS receives a new well test for a lease and reallocated going forward and going back in time. The
previous slides show an example where the allocation
changes in prior months based on new well test
information.
3.
2014 IHS
35 %
45%
Well Level
Smith # 1
VOLUMES
Well Level
Smith # 2
VOLUMES
875 BBLS
Well Level
Smith # 4
VOLUMES
1125 BBLS
20 %
Well Level
Smith # 3
VOLUMES
500 BBLS
? BBLS
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Key Concept:
IHS runs allocation every
month and prior months
will change volumes
Well Level
Smith # 1
VOLUMES
875 BBLS
45%
Well Level
Smith # 2
VOLUMES
1125 BBLS
31.5%
Well Level
Smith # 3
VOLUMES
Well Level
Smith # 1
VOLUMES
500 BBLS
787 BBLS
10%
Well Level
Smith # 4
VOLUMES
? BBLS
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Well Level
Smith # 4
VOLUMES
250 BBLS
40.5%
Well Level
Smith # 2
VOLUMES
1012 BBLS
18%
Well Level
Smith # 3
VOLUMES
451 BBLS
Example: Where
Allocation Works Well
Production Cumulative
by Well
Still producing
No new wells on lease. All wells drilled in 1990s
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Example: Where
Allocation Works Well
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Well started low and was Shut-in after only a few years.
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2.
3.
4.
5.
6.
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Key Concept 1:
Only Oil Leases are
Allocated
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Key Concept 2:
Total of all Allocated Volume equals the Unallocated Volume
IHS allocation method always has the sum of volume of allocated entities
for a lease equal the unallocated volume for that lease
Example: Smith Lease with 2500 Barrels monthly volume
Allocation routine uses well tests to assign 35% of production to Smith
#1, 45% of volume to Smith #2 and remaining 20% to Smith #3. The
Total of all wells is 100% and the volume equals the lease-level volume.
IHS ALLOCATION ROUTINE
35 %
Well Level
Smith # 1
VOLUMES
875 BBLS
2014 IHS
45%
Well Level
Smith # 2
VOLUMES
1125 BBLS
Well Level
Smith # 3
VOLUMES
500 BBLS
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Key Concept 4:
Allocation is highly
dependent on good
well test info
What is an Allowable?
The amount of oil or gas which a well or
lease may produce per month under
proration orders of the RRC
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Key Concept 5:
Some lease-level
volume cannot be
allocated to a specific
well Pre-1970
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Recognizing Multi-well Records. All of the Production IDs have MULTIWELL01 at the end. The Well Number is also MULTI.
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Multi-Well Records
on Texas Allocated
Example: API number 42-003-10816-0000 has 4 different allocated production entitiestwo in the Ellenburger Formation and 2 in the
Devonian. Notice that the pre-1970 production volumes that start in March 1965 are on a Multi-well record. This is a placeholder for
production that could not be allocated because there are no well tests prior to 1970.
This well is a dual completion with 2 tubing stringsone to the Devonian and the other to the Ellenburger. DO NOT ASSUME that all
the production listed in the Multi-well record for the Devonian or the Ellenburger ALL came from API 42-003-10816-0000. There were
other wells on this lease and the Multi-well record just shows you the lease-level volume that could not be allocated.
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Key Concept 6:
Allocation is best on
leases producing
more than a year
with no new wells
Summary #1: The allocation works well after drilling is completed on a lease and production has been
for more than a year
Summary #2: The allocation does not usually work well during a time a lease is being actively drilled.
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Example: Where
Allocation Works Well
Production Cumulative
by Well
Still producing
No new wells on lease. All wells drilled in 1990s
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Example: Where
Allocation Works Well
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Well started low and was Shut-in after only a few years.
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Examples
1. Hypothetical 3-well lease
2. Eagle Ford lease with 2 wells
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Month
Well 1
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Well 2
Well 3
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Hypothetical Lease
Comparison of Actual by well vs Allocation after only IP tests
Wells 1 and 2
Summary
In month 7, there are 3 wells on the
lease. All 3 wells have the SAME
IP test rate. Therefore the
allocation routine assigns 1/3 of
lease production to each well. This
is too much for wells 1 and 2
starting in Month 7 and too little
volume for Well 3.
Allocated
Actual
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Well 3
Allocated
Actual
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Hypothetical Lease
Comparison of Actual by well vs Allocation after Annual Tests
for Wells 1 and 2. Well 3 still only has IP Test.
Wells 1 and 2
Summary
Well 3
With annual well tests on Well 1 and
2, the allocation improves significantly.
Summary 2
Be careful when using First Month,
Maximum Month, First 3 Months or
other early month parameters. First
12 months of allocation is a better
measure of actual well performance.
Allocated
Actual
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Allocated
Actual
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Henning #2H
August 2012
August 2012
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August 2012
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August 2012
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Key Concept 7:
IHS runs allocation
every month and
prior months will
change volumes
2.
IHS receives a new well test for a lease and reallocated going forward and going back in time. The
previous slides show an example where the allocation
changes in prior months based on new well test
information.
3.
2014 IHS
35 %
45%
Well Level
Smith # 1
VOLUMES
Well Level
Smith # 2
VOLUMES
875 BBLS
Well Level
Smith # 4
VOLUMES
1125 BBLS
20 %
Well Level
Smith # 3
VOLUMES
500 BBLS
? BBLS
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Key Concept 7:
IHS runs allocation every
month and prior months
will change volumes
Well Level
Smith # 1
VOLUMES
875 BBLS
45%
Well Level
Smith # 2
VOLUMES
1125 BBLS
31.5%
Well Level
Smith # 3
VOLUMES
Well Level
Smith # 1
VOLUMES
500 BBLS
787 BBLS
10%
Well Level
Smith # 4
VOLUMES
? BBLS
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Well Level
Smith # 4
VOLUMES
250 BBLS
40.5%
Well Level
Smith # 2
VOLUMES
1012 BBLS
18%
Well Level
Smith # 3
VOLUMES
451 BBLS
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Addition of Well
Tests may cause
Multi-Well Records
to be removed
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Example:
Allocation change
with addition of test
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Key Concept 8:
Allocation to a well
stops when that well
is shut-in or plugged
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Key Concept 9:
Pending Production
a special situation of
By Well volumes?
IHS treats Pending like a Multi-Well record because we have no well tests
You can identify Pending records by the P in the Production ID.
CAUTION: Although many pending production reports are by well, some are NOT. IHS recommends
looking at the decline profile and offset wells to determine if the pending production is by well
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Key Concept
Review
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Questions?
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Contact us
Americas:
+1.800.IHS.CARE (+1.800.447.273);
customercare@ihs.com
2014 IHS. No portion of this report may be reproduced, reused, or otherwise distributed in any form without prior written consent, with the exception of any internal
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