Figure provides an outline of Solomon NGL production forecast methodology.
NGL production forecasts are based on gas production analysis and average NGL yields per selected basins.
The historical NGL yields were calculated using NGL supply and raw gas well production as a basis. Historical NGL supply is obtained from gas processing plant throughputs and NGL production from oil refineries. For Western Canada, production from the majority of gas processing plants was summarized.
For US Lower 48, gas processing plant throughputs were summarized on a regional basis, using data obtained from the US Energy Information Agency (EIA) and other sources. Historical lease condensate from both the US Lower 48 and Western Canada was obtained from associated and non-associated gas well data. The NGL yield forecast was based on the historical yield, taking into account play maturity and geology.
The associated and non-associated gas production forecast was performed using proprietary Solomon production models for key oil and gas plays in North America. These models take into account the full-cycle gas cost, including NGL uplift, as producers focus their activities on lower-cost areas. Natural gas demand is allocated on the basis of a region’s resources and full-cycle costs. The models analyze production history and forecast annual average production for each play based on the following:
- Relative economics of play and gas demand
- Regional drilling and completion activity
- New well initial productivity (IP) projected from recent trends, taking into account play maturity and the potential for incremental technological improvements
- Production decline rates