Hydrocarbon Resource Investment Analysis

Do you need help ranking blocks for a licensing round, deciding which unconventional gas play to enter, or choosing the best option for monetizing gas reserves?

IHS Hydrocarbon Resource Investment Analysis provides independent, fact-based information to help clients evaluate major energy asset decisions. We help prioritize your investment opportunities by conducting a thorough examination of the related technical, fiscal, commercial, regulatory and security factors.

IHS Hydrocarbon Resource Assessment harnesses the unique abilities of IHS CERA consultants. These experts combine their broad experience in evaluating plays, basins and countries on a global basis with IHS proprietary decision support tools and databases to build custom frameworks that facilitate client investment decisions.

Clients gain strategic support to:

Rapidly prioritize investment opportunities, based on a rigorous and consistent analysis
Continually test the prioritization list through updated data
Communicate new information with rich, clear insights to facilitate organizational buy-in

Who uses our service?	How?
Oil company exploration groups	Rank the main players in an area considering quality of acreage held (to what degree are they represented in high potential exploration plays), trends over the last 10 years for success rates, number of wildcat wells drilled, reserves per discovery. Define and rank the geologic basins and plays within these basins considering trends in numbers of discoveries, acreage acquired, reserves per well, product type and total reserves found. Carry out independent economics assessment for North American producing fields using decline curves derived from reported historical production data. Carry out Yet to Find analysis and forecasts based on reserve evolution analysis, Zipf (Pareto) field analysis and pace of discovery for each geographic element (basin, water depth, country) supplemented with geologic insight provided by IHS basin experts.
Oil company business development groups	Rank exploration and development blocks as acquisition targets considering reserves per well, trends in number of development wells drilled, production decline rates, API gravity, operator financial viability, expiry dates, degree of work commitment remaining. Characterize and rank shale and tight oil and gas plays comparing international plays with more mature North American plays, considering rock properties and geochemistry, pressures, depths, type curves and EURs. Understand how and why some companies were winners and some were losers in mature North American unconventional plays, considering play evolution, participation in sweet spots, ability to respond to evolving commercial, technical and competitor developments. Undertake gas supply-demand balance studies in a region considering trends in supply addition and resultant production forecasts as well as segmented demand. Address under and oversupply implications with regard to regional transportation and export into the international marketplace.
Oilfield service companies	Determine future segmented demand for products and services related to field development (e.g., tanks, gathering lines, separators, heavy lift equipment, FPSO components, rigs), considering trends broken out by country, water depth, HPHT, API and operator with 20-year forecasts.
Financial services companies	Determine company performance and value based on IHS production and upstream activity databases supplemented by industry research. Establish independent analysis of company success considering trends in the acquisition of net and gross acreage, number of wells drilled, success rates and reserves found.
Oil ministries	Determine investment trends in national oil and gas properties considering most effective operators, success rates and reserves additions. Compare fiscal regimes and state take with those of other countries based on field economics derived from actual (not hypothetical) field characteristics from IHS data. Advise on strategies to attract investment in basins, plays and countries.

IHS HydrocarbonResource Assessment enables clients to:

Directly compare opportunities in different basins, countries or situations
Prioritize and rank a diverse set of opportunities within an exploration portfolio
Rapidly assess and rank available blocks within a licensing round
Evaluate opportunities for unconventional gas production
Make confident decisions based on our cost-effective and thorough analysis

Our Unique Value Proposition

Our key differentiator is that we have a unique combination of extensive internally derived data, industry research, effective analytical tools and broad E&P expertise.
Benefits to the client are they receive a full characterization of resource opportunities including fields in all phases of development and yet-to-be-found fields, historical and geographic context combined with clear assumptions driving reasoned, auditable forecasts. We also provide integration of resource quantification, cost and value determination and subjective below-ground and above-ground risks.

Rick Chamberlain, Vice President, IHS CERA Consulting, brings 29 years of upstream, operations, and strategic management consulting experience. Prior to joining CERA, Rick was a Senior Engagement Manager in Strategic Decisions Group’s (SDG) oil and gas practice. Before SDG, he spend 19 years managing exploration and development programs, designing EOR programs, developing strategic plans for North American business units and consulting worldwide on project management issues with Chevron Corporation. Rick holds a BS and MS in Geology from Iowa State University.

Bill Aylor, Managing Consultant, IHS CERA Consulting, has over 30 years of geoscience, subsurface, technology, and strategic management consulting experience. Prior to joining IHS, Bill was a geoscientist and manager at Amoco and Texaco for 24 years, with postings in Egypt, Houston, Tulsa and Midland. He held brief positions with an independent oil company and a startup geophysical service company. While at Amoco he was directly or indirectly responsible for numerous wildcat discoveries with reserves of over 250 million bbl equivalent oil, plus process improvements that materially impacted the company’s success and reserves position. He was a SPE Distinguished Lecturer in 2000. Bill holds a BS degree and completed the Executive mini-MBA Program at Rice University.

Curtis Smith, Managing Consultant of IHS CERA Consulting Americas and Asia Pacific, helps companies assess strategic opportunities and forecast production and costs by leveraging the extensive US and international databases which are owned and maintained by IHS. Prior to joining IHS Consulting, Mr. Smith held consulting appointments in various energy sectors. His oil and gas experience includes work at ConocoPhillips and Marathon Company, oil majors and with major law firms in the Houston area. Mr. Smith has an MS in Geology from Brigham Young University.

Bob Fryklund, Vice President of Upstream Research, IHS CERA, has over 30 years of industry experience. Mr. Fryklund's focus is on global upstream strategic leadership and opportunity access and assessment. Prior to joining IHS, he served as Libya president and as Brazil country manager for ConocoPhillips. He also has held various leadership positions with British Borneo, Union Texas and Amerada Hess. He is a member of the Houston Geological Society and the American Association of Petroleum Geologists and has published numerous articles in three languages. A recognized expert on upstream oil and gas production, he frequently speaks at key industry meetings, such as the World Economic Forum, CERAWeek, IHS Herold Pacesetters Energy Conference, the Offshore Technology Conference and the American Association of Petroleum Geologists conference. Mr. Fryklund holds an AB from Hamilton College, has completed advanced studies from the University of Houston and the University of Tulsa, and holds an advanced certificate in management.

Leta Smith, Director, IHS CERA Global Oil Group, oversees and delivers research for the E&P Trends Forum. She brings 16 years of upstream research and consulting experience in both the gas and oil industries. Leta was a Senior Consultant in the IHS Consulting practice and previously with the IHS international data division. She holds a BA in geology from San Francisco State University and a PhD in geology from the University of Wyoming. She is a licensed professional geologist in the states of Wyoming and Texas.

Client Challenge:
- Define and rank plays and basins
- Characterize above ground risk issues, such as security risk, transportation bottlenecks and regulatory compliance
- Rank companies considering trends in wells drilled, success rates, reserves added and acreage held in attractive plays
- Rank fields considering remaining reserves, production decline rates, reserves per well and and well-drilling activity
- Rank exploration contract blocks considering expiry dates and location within play fairways.
- Determine alternate strategic options and value these options
See Case Study #1

Client Challenge:
- Characterize shale formations in the basins of the target country in terms of rock and geochemical properties
- Compare these basins and plays with more mature shale gas plays in North America, assigning analogs for each target shale play
- Using these analogs, predict well spacing, completion methods, costs, recoverable gas and production rates per well and per play
- Determine costs and economics based on country fiscal regimes
- Assess non-technical risk factors in the country, addressing infrastructure, service industry capability, transportation and regulatory issues
See Case Study # 2

Client Challenge:
- Rapid prioritization of investment opportunities (exploration, asset acquisitions, farm-ins) at a basin or play fairway level
- Rigorous analysis of technical, fiscal, commercial, regulatory and security factors to develop prioritization list
- Regularly updated information in response to rapid changes in the E&P environment to test prioritization and to respond quickly to opportunities
- Delivery of information with rich, clear insights to facilitate organizational buy-in
See Case Study #3 – Shale Gas Ranking
See Case Study #4 – Gas Monetization Study
See Case Study #5 – Where to invest?

Client Challenge:
- Obtain an independent view of markets and business environments, strategy viability and acquisition tactics and deal value to the buyer
- Identify and reduce acquisition risks through:
See Case Study #6

Client Challenge:
Rank blocks and finalize bids for a licensing round in a particular country within a limited time frame

IHS Consultants can help you:
- Evaluate plays with yet-to-find (YTF) reserves combined with economic analysis, to rank the blocks and finalize your bids

Case Study #1:Characterize E&P Performance and Trends in Latin American Country and Devise E&P Strategy

Challenge: A major oil company with E&P activity in a Latin American country wanted to provide an independent view of how it compared to other companies operating in the country and wished to understand which were the best plays, fields, and operators to determine the best point forward E&P strategy.
Solution: Using the IHS databases and geological, commercial and regulatory expertise, IHS Consulting fully characterized current trends in activity and the relative success of operators there, placing the client’s success in context with others operators. We defined plays and ranked basins and plays according to activity, relative success factors, potential yet to find and above ground risk such as commercial, political and regulatory risk. Based on this characterization and activity data, we developed a number of strategic options, which we discussed with the client to recommend the best future strategy.
Results: The client used the options to shift focus in the country from one basin to another and identified a number of new exploration blocks for acquisition or farm-in.

Case Study #2:Unconventional Hydrocarbon Study for a Large Asian Country

Challenge: The client asked IHS Consulting to assist in evaluating unconventional gas potential in country X
Solution:
IHS Consulting delivered an overview of global industry unconventional trends by characterizing major North American unconventional plays regarding key rock and geochemical properties, production yield and principal technologies used. We determined key business drivers and unique requirements for building a material business by describing North American play evolution through case studies, identification of major players, determination of keys to success (and failure), unit costs and economics. We also described key attributes associated with unconventional plays, namely whether they were statistical, manufacturing, or infrastructure plays. We gave a high-level overview of unconventional resource potential of country X by defining and characterizing unconventional plays through publication research and addressing service industry capabilities, as well as competitor activity. Finally, we provided high-level organizational capability and gap analysis by describing client capabilities compared to the identified skills and resources needed to succeed

Results: The client used the study to move forward with unconventional development in country X, addressing plays with the highest identified potential, learning from North American case histories and addressing organizational shortcomings.

Case Study #3:Extracting the Highest Potential

Challenge: An international shale gas client needed to identify global shale gas opportunities.
Solution: IHS Consulting performed a bottom-up analysis of primary shale gas plays, including extraction data, location, key players and ranking.
Results: This client expanded its shale gas business significantly by engaging key players and aggressively marketing its drilling, completion and development capabilities in areas of high shale gas activity.

Case Study #4:Gas Monetization Strategies

Challenge: A major gas player in Latin America needed to understand the profitability of available gas monetization alternatives. The client also wanted to compare opportunities and regulatory regimes across several countries.
Situation: IHS Consulting generated life cycle costs estimates and economic analysis for different monetization choices available to the client. We then analyzed different drivers--including regulatory factors--for profitability, uncertainty and risk, highlighting a strategy to capture the upside and minimize risk.
Results: Our study yielded a detailed strategy and capital allocation program. The client gained a clear understanding of the economic value of different gas monetization options in the region as well as risks and associated opportunities.

Case Study #5: Where Should We Invest?

Challenge: IHS Consulting has been asked on numerous occasions to provide studies for financial institutions that were considering investing in retail, distribution, refining and E&P assets.
Solution: Our analyses have included supply and demand trends, price projections, competitor analysis, industry assessments and evaluation of the target companies.
Results: The clients gained a report that prioritized investments based on optimal resource potential and minimum range of risks.

Case Study #6:Evaluating a Russian Opportunity

Challenge: A North American independent E&P client needed help to evaluate its first opportunity in Russia.
Solution: IHS Consulting leveraged the IHS CERA flagship advisory service, Russian and Caspian Energy, to provide both technical and commercial advice.
Results: The client was able to make faster, less-risky decisions by gaining insight beyond simple compliance into matters such as key business drivers, above-ground risks and execution concerns affecting the opportunity's value-creating potential.

Case Study #7:Quick Prioritization of Licensing Round Blocks

Challenge: A large independent oil company faced an upcoming licensing round in country X with a very short time frame to rank blocks and finalize bids.
Solution: IHS Consulting evaluated the plays using yet-to-find (YTF) reserves, which we supported with additional economic analysis.
Results: The client was able to confidently rank blocks and finalize its bids within the deadline.