Supply Studies for Midstream Investments
Typical midstream acquisition processes provide somewhat opaque information regarding the forecast of existing throughput volumes and the build-up of future volumes from undeveloped drilling locations. VSO can provide tremendous insights into future volumes by forecasting individual wells, quantifying the quality of and quantity of remaining drilling inventory and provide insights into pace of development assumptions.
Forecast of Existing Throughput Volumes
VSO can provide detailed well forecasts to build-up a more rigorous and higher confidence forecast of existing throughput volumes and reconcile historical gross volumes to those provided by the seller.
Evaluation of Remaining Inventory
Remaining inventory can be difficult to understand and predict, but VSO can provide insights to help navigate the evaluation process:
- Geologic Overview – Not always necessary, but critical to understanding acreage dedications in extensional areas
- Single Well Economics – VSO can develop independent type well economics to understand the attractiveness of future drilling.
- Capital Allocation – How does dedicated acreage inventory compare to other drilling inventory in a producer’s portfolio? VSO can help answer this.
Drill-out Models and Pace of Development
VSO can provide excel based drill-out models that account for existing throughput volume forecasts in concert with various scenarios for future development, that allows flexible input variables for reserves (volume) risking, pace of development and commodity price forecasts.