Module 6 - Production Economics Deep Dive

Presenter: David Braziel

Module six is an in depth look at the production economics model first introduced in Module 2.  Focusing again on Loving County in the Permian, we examine the economic effects of producing all three drill-bit-hydrocarbons from a single well.   

6.1 Model 6.1 – Multi-commodity Production Economics and Breakevens. The intent of this model is to calculate a producer’s well economic to inform our estimate of the producer’s response for a given geography.  It is a powerful tool for analyzing producer returns for a well or set of wells with similar characteristics. In this module, David Braziel reviews the inputs needed to calculate producer well economics. We introduce the Production Economics Multi Commodity Model at a high level before beginning an in-depth explanation of each model section. We will then go a step beyond Internal Rates of Return into Break Even Price Analysis using the multi-commodity economics model. This module is a key stepping stone in understanding RBN’s supply/demand methodology.