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Alta Mesa Holdings, LP
November 18, 2014 Confidential
Example:
Acquisition Evaluation of
Conventional Stacked Play
Goals and Challenges
Evaluate multiple scenarios quickly for an
acquisition evaluation.
Economic results.
Conventional pays:
– Type curve vs. Volumetric Estimate.
– Or, maybe BOTH.
Model recompletion program.
– Include dual completions.
– Include through tubing recompletions.
– Include single completions.
Shotgun Opportunity Summary
Shotgun field – Conventional stacked oil
pay
– 4 producing wells:
• Remington
• Weatherby
• Beretta
• Ithaca
– Ten idle wellbores and abandonment liability
– Salt Water Disposal
– Facility with gas lift capability
Opportunity – Current production
– Identified behind pipe:
• Benelli (4 zones)
• Browning (2 zones)
• Beretta (10 zones)
– Potential additional locations to be identified with 3D seismic
Challenges: – Model zone variety.
– Should wells be twinned?
– Development options.
Evaluation Summary
1) 2Twins: 30% Probability of Occurrence – Currently identified with
2 twins of Beretta
– Seismic upside: expected prospect count and success.
2) High: 25% Probability of Occurrence – Currently identified with
2 twins of Beretta
– Seismic upside: High prospect count and success.
3) 1 twin: 30% Probability of Occurrence – Currently identified with
1 twin of Beretta
– Seismic upside: expected prospect count and success
4) Low: 15% Probability of Occurrence – Currently identified with
no twins.
– Seismic upside: no prospects found.
Volumetric Results: Zone by Zone
Well List
Well Name Top Bottom EUR, Oil mbbl GOR, mcf/bbl
Benelli 2 4734 4750 21.7 9.313841037
Benelli 1 SS 5424 5440 21.2 9.435991075
Benelli 1 LS 7994 8113 64.5 7.255664416
Benelli 3 1366 2748 5 1
Browning SS 2158 2240 11.5 1
Browning LS 3829 4162 39.7 0.6
Beretta Twin Shallow3 1204 1283 10.9 1.417
Beretta Twin Shallow2 1912 1948 35 0.619898236
Beretta Twin Shallow1 2254 2311 17.8 1.092688136
Beretta 2 SS Sleeve 3166 3180 50 2
Beretta 2 SS 3550 3604 8.4 1.417
Beretta 2 LS 3935 4015 62.5 1.019504768
Beretta Sleeve 4812 4864 44.5 1.004647157
Beretta Twin Deep RC 978 1006 20.6 0.6
Beretta Twin Deep LS 5356 5416 75 2
Beretta Twin Deep SS 5146 5270 100 2
Beretta 4915 4961
User Data
Conventional Type Curve
Performance trend type curve: Initial production flat for 3 months
2nd 3 months decline @ 65%
3rd segment declines exponentially to EUR
Water hit at 6 months: ramp from 0.05 bbl/bbl
to 20 bbl/bbl
Functions in type curve reference user data
for EUR, IP, and GOR
=@Scalar('EUR, Oil mbbl')
=@Scalar('EUR, Oil mbbl')*.004
= @Scalar('GOR, mcf/bbl')
Scheduler Set-up
“Wait for:” is the function that controls completion order.
Multiple triggers available. Oil rate used in this model.
Recompletion Program Design
Well List
Completion
Name
Wellbore
Group
Controls
Order
User Data
Vary Costs and Time, Group Operations,
Control Timing
Producing well included with Well Count: -1
Well Name Well Count Template NameFlows To Wait For Task API NumberTop Bottom
EUR,
Oil
mbbl
GOR,
mcf/bbl RSV_CAT
Step 1
Is
Active
Step 1 Start
Date
(mm/dd/yyyy)
Step 1
Duration
(Days)
Step 1 By
Step
Group
Step 1
Fixed
Costs1
Step 2
Is
Active
Step 2 Start
Date
(mm/dd/yyyy)
Step 2
Duration
(Days)
Step 2 By
Step
Group
Step 2
Fixed
Costs1
Beretta Twin Shallow3 1 Recompletion (Single)Beretta Well
Beretta Twin
Shallow2 17-000-00000-001204 1283 10.9 1.417 3PUD 400
Beretta Twin Shallow2 1 Recompletion (Single)Beretta Well
Beretta Twin
Shallow1 17-000-00000-001912 1948 35 0.61989824 3PUD 400
Beretta Twin Shallow1 1 Recompletion (Single)Beretta Well 17-000-00000-002254 2311 17.8 1.09268814 3PUD 1600
Beretta 2 SS Sleeve 1 Recompletion (Single)Beretta Well Beretta 2 SS 17-000-00000-003166 3180 50 2 2PDNP 200 TTRC 70
Beretta 2 SS 1 Recompletion (Single)Beretta Well Beretta Sleeve 17-000-00000-003550 3604 8.4 1.417 2PDNP
Beretta
RC 600 Beretta RC
Beretta 2 LS 1 Recompletion (Single)Beretta Well Beretta Sleeve 17-000-00000-003935 4015 62.5 1.01950477 2PDNP
Beretta
RC 600 Beretta RC
Beretta Sleeve 1 Recompletion (Single)Beretta Well 17-000-00000-004812 4864 44.5 1.00464716 2PDNP 75
Beretta Twin Deep RC 1 Recompletion (Single)Beretta Well
Beretta Twin
Deep SS 17-000-00000-00978 1006 20.6 0.6 3PUD 300
Beretta Twin Deep LS 1 Recompletion (Single)Beretta Well 17-000-00000-005356 5416 75 2 3PUD 12
Beretta
Twin 1750
Beretta
Twin
Beretta Twin Deep SS 1 Recompletion (Single)Beretta Well 17-000-00000-005146 5270 100 2 3PUD 12
Beretta
Twin 1750
Beretta
Twin
Beretta -1 BerettaBeretta Well 17-000-00000-004915 4961 1PDP n n Beretta
Benelli 2 1 Recompletion (Single)Benelli Well Benelli 1 LS 17-000-00000-004734 4750 21.7 9.31384104 2PDNP 700
Benelli 1 SS 1 Recompletion (Single)Benelli Well 17-000-00000-005424 5440 21.2 9.43599108 2PDNP Benelli 1 600 Benelli 1
Benelli 1 LS 1 Recompletion (Single)Benelli Well 17-000-00000-007994 8113 64.5 7.25566442 2PDNP Benelli 1 600 Benelli 1
Benelli 3 1 Recompletion (Single)Benelli Well Benelli 2 17-000-00000-001366 2748 5 1 2PDNP 200
Browning SS 1 Recompletion (Single)Browning Well 17-000-00000-002158 2240 11.5 1 2PDNP Brownin 500 Browning
Browning LS 1 Recompletion (Single)Browning Well 17-000-00000-003829 4162 39.7 0.6 2PDNP Brownin 500 Browning
Recompletion Program Results
Asset Name Asset Reserve Category Prop_ID Spud Date (Start) TD (End) Frac Start Frac End On Prod
Benel l i 1 LS,7994-8113 Benel l i 1 LS,7994-8113 2PDNP 3/18/2015 3/24/2015 No Data No Data 3/25/2015
Benel l i 1 SS,5424-5440 Benel l i 1 SS,5424-5440 2PDNP 3/11/2015 3/17/2015 No Data No Data 3/25/2015
Benel l i 2,4734-4750 Benel l i 2,4734-4750 2PDNP 1/1/2017 1/7/2017 No Data No Data 1/8/2017
Benel l i 3,1366-2748 Benel l i 3,1366-2748 2PDNP 7/1/2018 7/7/2018 No Data No Data 7/8/2018
Beretta 2 LS,3935-4015 Beretta 2 LS,3935-4015 2PDNP 10/8/2016 10/14/2016 No Data No Data 10/15/2016
Beretta 2 SS Sleeve,3166-3180 Beretta 2 SS Sleeve,3166-3180 2PDNP 1/1/2018 1/7/2018 No Data No Data 1/8/2018
Beretta 2 SS,3550-3604 Beretta 2 SS,3550-3604 2PDNP 10/1/2016 10/7/2016 No Data No Data 10/15/2016
Beretta Sleeve,4812-4864 Beretta Sleeve,4812-4864 2PDNP 2/8/2015 2/14/2015 No Data No Data 2/15/2015
Beretta Twin Deep LS,5356-5416 Beretta Twin Deep LS,5356-5416 3PUD 2/15/2015 2/26/2015 No Data No Data 3/11/2015
Beretta Twin Deep RC,978-1006 Beretta Twin Deep RC,978-1006 3PUD 2/1/2017 2/7/2017 No Data No Data 2/8/2017
Beretta Twin Deep SS,5146-5270 Beretta Twin Deep SS,5146-5270 3PUD 2/27/2015 3/10/2015 No Data No Data 3/11/2015
Beretta Twin Shal low1,2254-2311 Beretta Twin Shal low1,2254-2311 3PUD 2/1/2015 2/7/2015 No Data No Data 2/8/2015
Beretta Twin Shal low2,1912-1948 Beretta Twin Shal low2,1912-1948 3PUD 7/1/2016 7/7/2016 No Data No Data 7/8/2016
Beretta Twin Shal low3,1204-1283 Beretta Twin Shal low3,1204-1283 3PUD 2/1/2018 2/7/2018 No Data No Data 2/8/2018
Browning LS,3829-4162 Browning LS,3829-4162 2PDNP 4/1/2015 4/7/2015 No Data No Data 4/8/2015
Browning SS,2158-2240 Browning SS,2158-2240 2PDNP 3/25/2015 3/31/2015 No Data No Data 4/8/2015
Activity Information
Activity SummaryProject: Shotgun Stacked Pay
Scenario: Filtered Results
10/24/2014 10:26
Economic Results
Net
Gross Wet Gas 3,668.17 mmcf
ASSET: 1-Jan-14 Dry Gas 3,668.17 mmcf
SCENARIO: 1-Jan-14 Oil 1,216.99 mbbl
PROJECT: 1-Nov-14 NGL 0 mbbl
COMPANY: Base MBOE 1,583.81 mbbl
Gross 0% 10% 20% Gross IRR Payout Net F&D Cost Initial Average Final
BT Cash 106,573.60 74,973.20 54,821.80 m$ % months 0% 10% 20% $/BOE WI Opcost (%) 50 50 50
Capital 66,068.50 57,084.00 50,220.40 m$ Before Tax 207.92 21 2.61 2.31 2.09 20.86 WI Capital (%) 50 50 50
NRI BOE (%) 42.79 42.9 42.91
Oil Gas NGL BOE Oil Gas NGL BOE Oil Gas NGL Well Working
Production Production Production Production Production Production Production Production Price Price Price Count Interest
Date bbl/d mcf/d bbl/d bbl/d _ _ _ _ _ _ bbl mcf bbl bbl $/bbl $/mcf $/bbl %
2014 134.3 320.1 0 187.7 49,025 116,850 0 68,500 93.5 2.17 0 4 50
2015 968.4 1,911.80 0 1,287.10 353,481 697,806 0 469,782 93.5 2.17 0 12 50
2016 1,631.80 2,898.10 0 2,114.80 597,228 1,060,723 0 774,015 93.5 2.17 0 15 50
2017 2,209.60 4,030.90 0 2,881.40 806,487 1,471,283 0 1,051,701 93.5 2.17 0 15 50
2018 1,488.00 2,481.00 0 1,901.60 543,137 905,573 0 694,066 93.5 2.17 0 14 50
2019 663.7 1,194.70 0 862.9 242,262 436,073 0 314,941 93.5 2.17 0 10 50
2020 346.2 623.1 0 450 126,699 228,059 0 164,709 93.5 2.17 0 10 50
2021 180.5 324.9 0 234.7 65,888 118,598 0 85,654 93.5 2.17 0 10 50
2022 94.2 169.6 0 122.5 34,392 61,905 0 44,709 93.5 2.17 0 10 50
2023 49.1 88.3 0 63.8 17,910 32,238 0 23,283 93.5 2.17 0 10 50
2,836,510 5,129,107 0 3,691,361
Oil Gas NGL Total Total Total Operating Total BT Cum Op Cum Cum BT YOY Undisc.
Revenue Revenue Revenue Revenue Opcosts Royalties Income Capital Cash Flow Income Capital Cash Cash Growth
Date m$ m$ m$ m$ m$ m$ m$ m$ m$ m$ m$ m$ %
2014 4,583.88 422.03 0 5,005.91 5,172.00 722.54 -1,424.05 0 -1,424.05 -1,424.10 0 -1,424.10 -100
2015 33,050.47 2,520.27 0 35,570.74 6,598.47 5,055.25 20,102.58 16,655.00 3,447.58 18,678.50 16,655.00 2,023.50 -342.1
2016 55,840.81 3,831.01 0 59,671.82 7,692.73 8,465.45 37,112.84 35,805.00 1,307.84 55,791.40 52,460.00 3,331.40 -62.1
2017 75,406.54 5,313.84 0 80,720.37 8,528.20 11,447.31 52,085.72 11,960.00 40,125.72 107,877.10 64,420.00 43,457.10 2,968.10
2018 50,783.36 3,270.66 0 54,054.02 7,731.44 7,664.86 32,859.07 1,288.50 31,570.57 140,736.20 65,708.50 75,027.70 -21.3
2019 22,651.54 1,574.96 0 24,226.51 1,399.24 3,435.32 16,793.05 0 16,793.05 157,529.20 65,708.50 91,820.70 -46.8
2020 11,846.40 823.68 0 12,670.08 1,029.44 1,796.62 8,484.84 0 8,484.84 166,014.10 65,708.50 100,305.60 -49.5
2021 6,160.51 428.34 0 6,588.85 834.84 934.3 4,112.89 200 3,912.89 170,126.90 65,908.50 104,218.40 -53.9
2022 3,215.62 223.58 0 3,439.20 734.05 487.68 1,848.53 100 1,748.53 171,975.50 66,008.50 105,967.00 -55.3
2023 1,674.59 116.43 0 1,791.02 678.31 253.97 666.61 60 606.61 172,642.10 66,068.50 106,573.60 -65.3
265,213.71 18,524.81 0 283,738.52 40,398.74 40,263.29 172,642.08 66,068.50 106,573.58
Disc. Profit Index (Cash Flow Multiple)
Production Rates Production Volumes Realized Prices
Cash Flows Cumulative Cash Flows
Alta Mesa Holdings RISK SETTING: 3,691.36 1,845.68
NPV Economic Indicators Company Interest
EVALUATION DATE: 2,836.51 1,418.25
Shotgun Stacked Pay DISCOUNT DATE: 0 0
REPORT WI TYPE: 8,548.51 4,274.26
Shotgun Stacked Pay ASSET START DATE: 8,548.51 4,274.26
Reserves
Gross WI
BT Economic Summary
As Produced
10/24/2014 10:56
Sensitivity Tornado
Run Label Command Argument #1 MC Seed ATNPV@ 0% BTNPV@ 0% Capital@ 0% Opcost@ 0% Oil Volume Gas Volume
Seed m$ m$ m$ m$ mbbl mmcf
1 Base Base 776950014 -4,358.70 -5,517.30 20,175.00 28,472.90 572.1 1,103.00
2 Price - Low Risk:Price 0.8 1568750741 -11,173.30 -14,143.40 20,175.00 28,472.90 572.1 1,103.00
3 Price - High Risk:Price 1.2 400339575 2,456.00 3,108.80 20,175.00 28,472.90 572.1 1,103.00
4 RR - Low Risk:RateAndReserves 0.8 1414866721 -10,537.00 -13,338.00 20,175.00 28,208.00 465.8 871.6
5 RR - High Risk:RateAndReserves 1.2 1766238612 1,769.50 2,239.90 20,175.00 29,212.30 684.1 1,336.70
6 Cap - Low Risk:CapitalAll 0.8 1787511411 -1,171.00 -1,482.30 16,140.00 28,472.90 572.1 1,103.00
7 Cap - High Risk:CapitalAll 1.2 1738933133 -7,546.30 -9,552.30 24,210.00 28,472.90 572.1 1,103.00
8 Opcost - Low Risk:Opcost 0.8 1507048850 140.1 177.3 20,175.00 22,778.30 572.1 1,103.00
9 Opcost - High Risk:Opcost 1.2 432886744 -8,857.40 -11,211.90 20,175.00 34,167.50 572.1 1,103.00
Conclusions
Able to evaluate multiple potential outcomes with very little duplication of work.
Scenarios and sensitivities could be created and evaluated in a collaborative environment since results and comparisons are within the tool.
Determined that field that is currently negative cash flow could be economic with some exploitation. In addition, potential existed to grow the field through 3D seismic evaluation.
Bid was made and accepted for the asset, but transaction has not yet closed.
Methodology could also be used to plan and manage a similar asset.
The workflow will scale well into much larger assets.
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