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Ralph E. Davis Associates, Inc. is involved in numerous acquisition analyses throughout the year and has assisted several clients in developing successful bids to acquire properties. Additionally, the firm has evaluated the oil and gas assets of several companies for inclusion in sales brochures.
Field studies of both conventional and non conventional reserves are performed on a routine basis, and the firm is active performing evaluations for clients with fiscal year ends during the calendar year as well as at the traditional year-end reserve reporting schedule.
Ralph E. Davis Associates, Inc. completed several projects during the past year that involved both the evaluation of existing fields in the international energy sector, as well as the analysis of a development program in a field that had experienced difficulties in obtaining successful completions.
Davis personnel are preparing to present two seminars in China at the request of companies wishing to expand their knowledge into the international energy sector, and recognize the need for training related to the evaluation of acquisition projects, reserve determinations and regulatory compliance in the international securities markets.
Discussions and negotiations had been in progress for almost a year when the firm was contracted to perform a reservoir evaluation of certain producing fields in Pakistan. The project involved analysis of the productive reservoirs, determination of recoverable reserves and an analysis of the completion and surface facilities. The success of the project was such that a similar study is being undertaken during 2005 for another field area in Pakistan.
An additional evaluation involved a concession area in Argentina that had several wells drilled and completed but with limited commercial success. Representatives of the firm reviewed all the data associated with the project, including seismic, petrophysicial, reservoir, drilling, completion and stimulation data. The producing characteristics of the wells indicated areas of change in the drilling, completion and stimulation programs that could have a profound effect on well performance.
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 Ralph E, Davis Associates, Inc. completed a resource assessment of an area encompassing almost a million acres in the Eastern United States. The area is one in which the client has both leased and fee acreage in an area of historical coal development. Portions of the area have already been mined so the mined coal interval was excluded. Shallower and deeper intervals remain for well development and these intervals were evaluated as to their volumetric determined coal volume and potential for coalbed methane production based upon limited desorption data.
The company has evaluated production from the largest coalbed methane gas producing coal mine in the world and routinely provides the client firm with reserve information for its public filings. The active mine and surrounding area encompasses almost 200,000 acres with gas production from as many as fifty individual coal intervals above the interval targeted for mining. Additional smaller mines have been studied for the development and production of coalbed methane for both economic considerations as well as safety concerns associated with de-gassing the mine for ongoing operations.
The company has also reviewed the ongoing development program of a coalbed methane project in Queensland, Australia. A Davis client has a minor interest position in several areas that are in various stages of development, and current gas production is being expanded to supply the Brisbane commercial market.
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Davis had undertaken various studies of sand reservoirs in order to evaluate both the potential for gas in place, recoverable reserves and to achieve a tight gas sand designation form regulatory authorities.
One project in the Eastern United States involved extensive log analysis of several hundred producing wells, and estimation of both the gas stored within the reservoir and the recoverable reserves, and the preparation of presentation materials for filing with the appropriate regulatory agency for tight gas sand designation
One project involved the analysis of some twelve thousand wells producing within a shale interval for confirmation of downspacing development in order to recover reserves not being captured by current spacing requirements. The client has proceeded with the additional drilling as needed.
One project has required log and petrophysical analysis of a massive sand sequence to identify similar depositional packages within the overall interval, and to estimate original gas in place and the recovery potential using frac techniques directed at the individual sand packages.
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Davis had undertaken the study of a private company's gas production in the Appalachian Basin. The reserves of the existing wells were estimated and a database of some five thousand plus wells reviewed to compare the client's success to date to nearby production. A geologic study of individual producing reservoirs was incorporated into the study to correlate volumetric determined gas-in-place to estimated recoverable reserves. Several hundred undrilled locations have been identified and a development program targeting the better areas was prepared as part of the overall study.
 Annual reserve evaluations for client companies are spread out during the calendar year, with some clients having their fiscal year end at mid year, the end of the third quarter or at calendar year end. Davis performs the reserve evaluations both as an annual review, as quarterly reviews with drilling and completion activity brought forward to year end, and throughout the year on specific property areas in order to effectively work with a large number of properties.
The reserve evaluations include the reviewing of decline curves on producing wells, evaluating new well completions and assessing the potential of undrilled locations. Geological mapping and volumetric determinations are performed on many properties as part of the evaluation process. The Davis company will utilize both the Aries and OGRE reserve evaluation systems, making all appropriate scheduling changes and running economics on the final analyses. The results will be utilized in SEC 10K filings for public companies, as well as being utilized in meeting financial reporting requirements.
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Ralph E. Davis Associates, Inc. has reviewed over $3.0 Billion worth of offered oil and gas properties during the past few years. The firm's activities have ranged from total and complete analysis of a package and development of a bid offering for a client with a limited technical staff, to working with a client company's acquisition team to facilitate the analysis of a large complex offering.
The offerings evaluated include both producing and non producing properties throughout the United States and Canada, as well as several producing concessions in South America. These potential acquisitions ranged in value from $10 Million to some $400 Million in size, and Davis' clients have been successful in bidding and negotiating on several of the packages. The Davis firm played an integral part of each acquisition analysis and bid preparation.
Certain of the offerings included significant behind pipe and offset drilling potential, especially targeting reservoirs that were not the primary zones of completion. The Davis firm analyzed the available data particularly as it related to possible drainage of the secondary zones from the occasional completions, frac activity in the primary zones and commingling of producing horizons. Geological software was utilized to prepare maps reflecting the potential in these secondary zones and to identify areas that could not be classified as proved due to limitations in the data.
Identification of non-proved reserves and the necessary capital to develop the properties, thereby moving non-proved reserves into the proved category as part of the reserve replacement process, played an integral part of the acquisition analysis.
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Two members of the firm are involved in providing expert analysis concerning properties in litigation. One project has required the review of over 100,000 pages of documentation related to reserves developed and produced, in relationship to claims made by the developer to the investment community. The project is anticipated to require Davis company services for over a year before the project is scheduled to go to trial.
The other litigation project concerns reserves developed and produced after the client company was unable to obtain title to specific properties. Historical sales and revenues as well as future production and revenues are part of the eventual settlement that should go to trial sometime in 2007.
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The Davis firm is preparing to undertake the study of a significant acreage holding in the Eastern United States for a client company. The client company has been on a continuous development program for many years, with the success of individual wells being varied and sometimes disappointing. Davis will evaluate not only the client's wells but those of other operators to determine if trends of better performing wells becomes evident. The reserve potential determined form production data will then be compared to geologic studies of individual reservoirs to delineate those areas that offer better reserve potential for development.
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