TECHNOLOGICAL ADVANCEMENT AND THE RECOVERY OF NATURAL-GAS - THE VALUEOF INFORMATION

Accurate information on geology, petroleum engineering, and economics is essential for firms to make efficient decisions concerning if and, if so, how to produce natural gas wells. Improved information may not only help insure that wells are economic, but may also lead to reduced costs of production and an increased physically recoverable stock of the resource. This paper empirically applies the economic theory of ex haustible resources (extended to include necessary reservoir engineeri ng) to evaluate the benefits obtainable from using an enhanced informa tion technology developed by the Gas Research Institute. The wells ana lyzed indicate significant benefits are obtainable with appropriate us e of the new technology. The magnitudes of these benefits vary across reservoir characteristics.