Pricing

Price Model

Cap is maximum pricing not exceeded via Escalation model.

Note: ARIES max values do not import as cap

Begin Dates can be:

1. Flat: From As Of Date to ECL
   
2. As Of: From As Of Date (denoted by “1 months”) for specified number months
   
3. Dates: From entered date.  Unless intended, be careful not to pick date after As Of Date so as not to affect economics
   

Tip: For months and dates, Econ Limit auto-entered in final segment so put a zero at end if needed.

Pricing Breakdown

1. Oil - Oil Prices always $/BBL
   
2. Gas - Gas Prices $/Mcf or $/MMBTU
   
1. If $/MMBTU, Ensure BTU content defined in Stream Properties.
   
3. NGL -NGL Prices $/BBL, $/GAL or % of Oil Price (adjusted with oil over time)
   
1. Since NGL Yield is set in Stream Properties always at BBL/MMCF, 42 gal/BBL conversion factor applied in all calculations
   
4. Drip Cond - Drip Cond Prices $/BBL or % of Oil Price (adjusted with oil over time)

8/8ths Break Even

1. 8/8ths Break Even –  Calculate for single-well economics (not the entire project) for every well in the Oneline economics output, an Oil and Gas input (not realized) price to achieve a specified rate of return. Make sure to select Oil Break Even and/or Gas BreakEven outputs in the Additional Oneline Summary Options section when running economics to view the results.  8/8ths means the WI/NRI are not used but rather 100% WI and the LNRI as the NRI to calculate the output.  The method used is to input $2 and $3 Gas for instance and calculate the NPVx (where x is the specified rate of return %, ie NPV10) and then interpolate/extrapolate by that ratio to get an approximate input price that would cause a 0% rate of return.  Note that iteration is not used so the calculated value is not exact, especially for  extremely high positive or low negative prices.  Also, complex economic inputs such as reversion interests which cause non-unique solutions are not supported.  This feature is an algorithm to save a user from having to change inputs manually to find the break-even price systematically.
   
2. NPV Discount – Enter a discount factor hurdle to use instead of zero (undiscounted)
   
3. Based on Price Ratio - (default No) to interpolate Gas or Oil break even price yielding NPV=0 at given discount rate.  Select Yes and price ratio approximates profitability of the respective products (ie $70 oil and $4 gas = 17.5, higher than the energy equivalence of 6.0)
   

Price Decks

1. Price Decks - Pull the current or historical futures pricing on a given date for:
   
2. Gas Price - Henry Hub Natural Gas Future
   
3. Oil Price - (NYMEX / WTI –or- Brent Crude Oil Futures Settlements) – scroll down for WTI!
   

Warning: Price Decks are forward looking a month or two in advance of the date you pulled! Use of the deck without populating historical data might cause zero revenue in the interim months between As Of Date and the first of the pricing. See the document linked in the tooltip next to the PRICE DECKS for instructions on a method to fill in historicals.

We are looking at adding functionality to pull 12-months historical data with interpolation to futures for interim months, but you may pull and manually insert actuals via:

Gas: http://www.eia.gov/dnav/ng/hist/rngwhhdm.htm

Oil: http://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=pet&s=rwtc&f=m

Custom Stream Pricing

1. Users can also define unit prices for any custom streams that have been created from the project or company level
   
2. From the Pricing assumption's Advanced View, all created custom streams will be displayed under the 'Key' dropdown
   
3. After selecting a custom stream in the 'Key' cell, make sure to indicate:
   
1. The stream type (Company/Project Custom Stream) in the 'Category' column
   
2. The criteria (flat, time series, or relative time from your effective date)
   
4. All custom stream pricing will be based on $/Unit measurements, with 'Unit' being defined in the production streams settings

Comparison View

This new view allows users to compare the pricing of different streams, matching the dates, side by side, creating an easier to use view to analyze your pricing model.

This can also be used to copy and paste all of your commodity prices at once, rather than stream by stream.

Note: This feature can only be accessed in Advanced view.

Copying and Pasting in Advanced View

This section will go through a basic workflow of how to copy and paste your pricing data in Advanced View. First, we want to find our pricing data in an excel spreadsheet. For this example, we will be doing one stream at a time. Below, we have the periods and corresponding pricing for oil. Highlight all the data by using ctrl+shift+down arrow and ctrl+shift+down arrow and then copy it using ctrl+c.

Moving over to our pricing model, we then want to add a key.

Change the criteria to "Dates."

Then, selecting the first box in the period column, press ctrl+shift+v to paste the data as a time series. 

Repeat this process for other streams. If you are in comparison view, you can copy and paste all of your data at once.