Oil and Gas for Lenders and Private Equity
Many people involved in lending and investing come from outside the industry and are not familiar with the underlying operations and commercial terms. This course provides an overview with emphasis on mineral rights and leasing, joint operations, AFEs, joint interest bills, oil and gas economics, and an overview of reserves. It includes an example of an unconventional oil and gas project through leasing, unitization, well plan and drilling permits.
Course Agenda
Timing: 8:00 AM -4:00 PM with 45 minutes for lunch.
- Oil and gas production types and characteristics
- Organic source
- Sedimentary rock basins and rock types important to oil and gas (examine with magnifiers)
- Porosity and permeability (physical demonstration)
- Unconventional shale and tight rock characteristics
- Oil and gas formation
- Oil and gas migration and traps (physical demonstration)
- Changes over geological time
- Total petroleum system
- Conventional vs. unconventional development
- Geological and geophysical methods/tools used by geoscientists
- Seismic acquisition
- Exploration decision factors
- Questions using electronic response cards
- Ownership of oil and gas rights in U.S.
- U.S. land survey systems and relevance to oil and gas
- U.S. ownership distribution (private, federal, state, Indian and private)
- Patents and deeds
- Severance of mineral rights from surface rights
- Ownership of oil and gas production (Rule of Capture)
- State regulatory agencies and conservation laws
- Vertical and horizontal well spacing examples
- Elements of an oil and gas lease
- Royalty payments and statements
- Severance/production taxes and other royalty cost deductions
- Lease assignments
- Joint ownership and net mineral acres
- Pooling and unitization (voluntary and compulsory)
- Net revenue interest
- Other types of royalty interests (Non-Participating, Overriding, Net Profits)
- Carried interests and farmouts
- Title opinions and division orders
- Example of an Eagle Ford horizontal drilling project from original land grants, to leasing, to unit declaration, to horizontal drilling plan and permits
- Brief overview of federal onshore leasing
- Questions using electronic response cards
- Well planning
- Wellsite preparation and rig mobilization
- Video segments (with downhole animations) explaining the structure and functions of a drilling rig and showing the step-by-step drilling of a horizontal well
- Video and animations showing hydraulic fracturing
- Well completion (flowback, tubing, packer and christmas tree)
- Questions using electronic response cards
- Exploration and development economics
- Post-drilling costs required to complete a well and establish production
- Well evaluation tools (wireline logs, production tests and well cores)
- Modeling, simulation and development considerations
- Artificial lift
- Example production site layout
- Production processing facilities
- Gas gathering and processing
- Example oil and gas production flow from wellhead to market
- Oil and gas reserves
- Questions using electronic response cards
- Model-form joint operating agreements
- Review of key provisions in the AAPL model form JOA (Copy of model form JOA included)
- Operator duties, partner approvals and AFEs
- JOA accounting procedure (Copy of COPAS model form accounting procedure included)
- Direct costs, operator overheads and joint interest bills (JIBs)
- JV Auditing process
- Questions using electronic response cards
- Course evaluations: copies of all evaluations provided to company