How to Make Better Production Forecasts for Better Oil and Gas Operations

07/23/2015
How to Make Better Production Forecasts for Better Oil and Gas Operations

Behind every E&P company's success are quality forecasts

Production forecasting.

For a lot of upstream oil and gas organizations, those two words are a source of great consternation.

For others, they’re the source of better decision-making, greater oil and gas production, better capital management, and less risk.

Why the fork in the road?

Answer: It’s all in how production forecasts are generated.

Done right, forecasts are a positive driving force behind the success of many teams and the organization as a whole. Bad forecasts inevitably lead to, well, consternation.

Here are the five characteristics that my colleagues and I recommend every forecasting engine have:

  • The system should be probabilistic: You need to know the most likely scenario and the range of production possibilities.
  • It should be engineering-based: This keeps the forecasts physically representative of how oil and gas wells behave when they’re functioning normally.
  • At the same time, it needs to be reality-aware: Of course, wells don’t always function normally, so reality awareness through a statistical approach to behavior through simulations, shut-ins, recompletions, and bad data is ideal.
  • It must be as accurate and unbiased as possible: For a system under evaluation, perform blind tests against your current method, hiding the last year’s actuals, to see which approach gets you closest to those actuals.
  • It should be fast: Forecasts generated by an automated system allow your engineers to focus their efforts on correcting and preventing problems rather than wading through data hunting for them. (Interesting fact: A recent IDC study revealed that production engineers, on average, spend just 39 percent of their time on value-add engineering workflows. Bumping up that number by even a few percentage points would translate to stronger production and lower operating costs).

But stronger production and lower Opex spend are only part of the story. 

Better forecasts also give rise to better analyses. You get a more accurate picture of your reserves (both most likely and full range of uncertainty), a better understanding of why completions fall below their bounds, and a more complete look at downtime and its causes.

So which fork in the road is your organization taking?

How To Make Better Production Forecasts For Better Oil And Gas Operations

Want To Learn More?
Watch this webinar to learn how to make better production forecasts for your business. 

About The Author
Scott RaphaelA 20-year industry veteran and P2’s Vice President of Production Operations, Scott Raphael is responsible for setting direction for P2’s production operations product line. Over his two-decade oil and gas career, Scott has been on the operating, services, and consulting sides of the business. When he’s not behind his desk or on a plane to his next business meeting, Scott enjoys traveling and photography. Scott met his wife the day after his graduation from the University of Texas at Austin, where he earned a degree in Petroleum Engineering.

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