Modeling uncertainty in producing natural gas from tight sands
Since accurate geologic, petroleum engineering, and economic information are essential ingredients in making profitable production decisions for natural gas, we combine these ingredients in a dynamic framework to model natural gas reservoir production decisions. We begin with the certainty case before proceeding to consider how uncertainty might be incorporated in the decision process. Our production model uses dynamic optimal control to combine economic information with geological constraints to develop optimal production decisions. To incorporate uncertainty into the model, we develop probability distributions on geologic properties for the population of tight gas sand wells and perform a Monte Carlo study to select a sample of wells. Geological production factors, completion factors, and financial information are combined into the hybrid economic-petroleum reservoir engineering model to determine the optimal production profile, initial gas stock, and net present value (NPV) for an individual well. To model the probability of the production abandonment decision, the NPV data is converted to a binary dependent variable. A logit model is used to model this decision as a function of the above geological and economic data to give probability relationships. Additional ways to incorporate uncertainty into the decision process include confidence intervals and utility theory.
- Research Organization:
- International Association for Energy Economics, Cleveland, OH (United States)
- OSTI ID:
- 416342
- Report Number(s):
- CONF-9507139-; TRN: 96:006517-0037
- Resource Relation:
- Conference: 18. International Association for Energy Economics (IAEE) international conference, Washington, DC (United States), 5-8 Jul 1995; Other Information: PBD: 1995; Related Information: Is Part Of Into the Twenty-First Century: Harmonizing energy policy, environment, and sustainable economic growth. Proceedings; PB: 528 p.
- Country of Publication:
- United States
- Language:
- English
Similar Records
Appraisal of the tight sands potential of the Sand Wash and Great Divide Basins. Final report, June 1989--June 1991
Venture economics of condensate gas field development