Typical clients, include:
Producers: valuation, reserves, costs, fiscal terms, portfolio optimization, risked
economic analysis, performance benchmarking, country risk
Service firms: product development, new product launches,
competitor analysis, market sizing and growth
Private Equity firms/Family Offices:
oil and gas property valuations, market analysis, oil and gas operational
expertise, access to drilling and operations experts,
in-depth analysis of general industry trends, including well inventory
levels, activity modeling, lease valuations
Bill Severns, founder and managing partner of the Energy
Consulting Group, on what differentiates ECG
- We know the E&P
industry: We have experience in all phases of the
upstream industry, including exploration, major project
developments, market fundamentals,
new technology development and
Winners: our consultants apply the techniques, skills
and experiences learned while working for acknowledged leaders in
business and E&P strategy, such as, Bain, Cambridge Energy Research Associates (CERA) and other
- Independence: we have no agenda other than
delivering the best strategies for our clients.
- Practicality: we believe a key and often
overlooked component to strategy development is practicality, so
our consultants factor implementation realities into the
strategy crafting process.
- Rigorous, fact based analysis: our consultants
don't blindly accept conventional wisdom.
They investigate and analyze until they have a fact base to support
their insights and recommendations.An example is our global oil
field database, which describes over 2200 major oil and gas
projects from around the globe that have been or are being
developed. We believe our North America frack and rig market analytical tools to
be among the best in the industry, and allow us to help guide our
clients through the ups and downs of those markets.
- Tool kit: we use a variety of analytical tools to provide
valuable insights. These include, but are not limited to, an extensive
proprietary database of well and lease costs developed through our work for both
oil and gas companies and private equity firms, and our in-house economic and
decline curve analysis tools, which we believe to be among the best in the
business, and which we use extensively for reserve determination, project/well
economics and asset valuation.
Bill is the founder and managing director of The Energy Consulting Group. As a
senior director at the Cambridge Energy Research Associates (CERA), and while at Bain &
Co., he successfully guided strategy efforts in the oil and gas and other industries for firms
ranging in size from start-ups to Fortune 500 firms. Prior to obtaining an MBA
from MIT, he was an
engineer and engineering manager for ARCO, where he
initiated and led a wide range of projects in the North Sea
the front range of the US Rockies
methane), and in Indonesia
Strategy, Oil and Gas Property Valuations, Reserve Quantification and
Assessment Lens-EVAL is our proprietary, industry
economic analytics platform, which we developed because we
wanted a more flexible, easy-to-use tool than was then available in the
market to evaluate and cross compare the many different investment
opportunities in the exploration and production segment of the oil and
The analytical engine is integrated with the R statistical/graphics
program to provide access to industry
leading statistical tools for, among other purposes, performing stochastic
modeling, and Monte Carlo simulations.
After all, some call shale plays
statistical plays, and the integration of R and EVAL has proved insightful for this
very reason. We are now using our R statistical modeling expertise to incorporate
auto machine learning (AutoML) capabilities into our
analytical tool suite, including integration with EVAL. Based on
our experience so far, we believe
this to be especially differentiating for oil and gas asset valuation, and
oil and gas reserve quantification/classification.
We have used EVAL to run innumerable
evaluations of oil and gas investments of all types,
including: light, tight oil prospects;
shale gas wells; deepwater projects; LNG installations; and oil sands investments. Also integrated into
the coding are modules to evaluate non-North American opportunities,
such as those being developed under production sharing contracts (PSC).
Other uses have
included determining minimum purchase/sales prices for A&D,
modeling forward production profiles for investment analysis,
incremental economics to evaluate the efficacy of introducing new
technologies, and incrementally comparing investing in different asset
types to determine how best to allocate limited capex budgets.
Because of the flexible architecture used to
craft the analytical engine, we can easily modify it for the specifics
of any upstream oil and gas situation.
R also allows us to output results into
presentation quality, easy-to-interpret graphs and summaries, which
in turn are printed into an easily transmitted format that can be
read by smart phones, notepads, laptops, personal computers, etc.
Essentially: print once, read by any.
Our extensive economic analyses for clients
generated a broad and deep database of cost and well performance
for all E&P settings, but especially for the onshore
North American nonconventional sector. Here our data ranges from the earliest
days of the Barnett shale play, to the most recent multiwell,
multi-horizon pad in the
specialized expertise in
the ongoing transformation of the oil and gas industry due to rapid advances in
technology, especially fracking.
Frack_It is our
proprietary upstream activity assessment tool/database. Frack_It gives us in-depth
insight into the onshore North American drilling and fracking markets
because it allows us to reasonably estimate activity as a function of
oil and gas prices (and by extension for all manner of other oil field
services and technologies, including coiled tubing, completion rigs,
sand, trucking, etc.) Uniquely amoung such approaches, we have
grounded it in the economics of the industry using EVAL.This allows us
to not only forecast activity in the aggregate, but for over 50
individual shale gas and light, tight oil plays
in both the US and Canada.
This tool was
developed under the sponsorship and in conjuction with one of our long
time clients, a large supplier to the fracking industry with a detailed,
sophisticated understanding of
upstream activity. Our interaction with this client for over a decade
has allowed us to continuously reality check the output of the tool against what is
happening on the ground, and refine it accordingly until at present we
rely o determine play level frack hhp demand,
frack crew levels and demand for hi-spec drilling rigs.
Another key tool supporting Frack_It is a
database containing the operational details for thousands of vertical
multi-stage fracked wells. Data includes wellbore schematics,
directional surveys, AFE and "as spent" costs, drilling histories,
completion summaries, which contain the activity logs describing the
fracing operations for these wells. A
small sampling of this information is located here, and a sample
which presents details on injected volumes, pressures, rates,
perforation intervals, etc. is presented here.
Uses of Frack_It have included helping: a private equity
firm evaluate the purchase of a coiled tubing company, a Fortune 100
firm accurately project drilling activity levels at the
price lows of the 2015-2016 price cycle, and to provide accurate guidance on how fast, and in which areas,
the subsequent rebound would play out.
While the Senior Director overseeing
research for new oil field technologies at the Cambridge Energy Research
Associates (CERA), Mr. Severns led the conceptual thinking and research
Intelligent Oil Field (IOF) concept (also called
the Digital Oil Field of the Future
(DOFF). He has been
Offshore Engineer, as well as the
Wall Street Journal,
Financial Times and
AP news services about the IOF, and continues to stay abreast of
how this concept has evolved over the years, and how it is currenlty being
applied. For some examples of the intelligent oil field in action,
please go to
Oil and Gas
Nonconventional Drilling/Completion Activity Portal- Data and
information includes, rig
counts, production levels, and activity maps. Innovative use of our
web based 3D graphics tool more easily and conveniently presents this market
those who might be interested, here are some other web based 3D examples
that we have created to assist our clients.)
US Natural Gas Supply/Demand Fundamentals Page
Link to Global Oil Supply/Demand Fundamentals Page
Key to our ability to differentially perform
fundamentals analysis, especially for oil is
our project database,
in which we track major E&P projects from across the globe that we
believe will contribute materially to oil supply. The database currently contains almost
2200 entries covering a 20 year span. This database provides us with the
Make reasonable estimates
for the amount of oil supply entering the market for any given year
covered by the database.
origination of new oil volumes by country, region, OPEC/nonOPEC, and
type (e.g. deepwater, shale oil, bitumen, etc.).
average aggregate decline rates.
Put current trends
and events into historical perspective.