Over the last decade, breakthroughs in new oil and gas technologies have helped access untapped resources and allowed for their economic production. Through horizontal drilling and new completion techniques, gas trapped in low permeability tight shales is now accessible. Higher world gas prices have made gas liquefaction economic, facilitating transport of liquefied natural gas (LNG) to overseas markets. Technology, coupled with supply and demand, has initiated a new generation of mega-projects around the globe. These projects encompass the entire supply chain, from field development to pipelines feeding the LNG facilities, to shipping the product to market. As the global market for natural gas continues to grow, there is tremendous investment potential. However, due to complexities involved, accurate modeling is critical to understand the best investment strategy and to minimize risk.
This paper will explore the intricacies involved in modeling upstream field development and the scenarios required to provide reasonable estimates of the upstream asset that will feed the rest of the LNG chain. We will look at the entire upstream asset from the investor's point of view, including investment required, growth potential, and long-term sustainability. We will compare how different decisions in field selection and development rate impact overall value. This paper will highlight the importance of using technical expertise, high quality data and specialized modeling software to produce a meaningful representation of an upstream development plan.
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