how much oil or gas exists and can be produced, and what will be the

return on investment?

Well logs, formation evaluation, volumetric estimation

Volumetric estimation is concerned with quantifying how much oil and gas exists in an accumulation.

It is a current estimate and is expected to change over time.

Introduction Reserves & Resource Definition

Resources are defined as:the total estimated in-place quantities of petroleum at a specific date to be contained in known accumulations, plus those estimated quantities in accumulations yet to be discovered

Reserves are defined as:the estimated remaining quantities of petroleum anticipated to be commercially recoverable from known accumulations at a specific date, under existing economic condition, by established operating practices and under current government regulations

- SPE 38044 -

Introduction (cont) Reserves & Resource Definition

RESOURCES

Discovered Undiscovered

UR

Cumulative Production

Reserves

Proved Unproved

Probable

Total IP penetrated by a wellbore

Total IP yet to be discovered

Commercially recoverable

Estimated remaining quantities

Total Production to

datePossible

How to find out how much? Volumetric estimation/geologist's method? Material balance? Pressure decline analysis?

Volumetric method Based on cores, welll logs analysis, geological

maps... In place HC in new, non-producing wells and

new basins Recoverable estimated from in-place, with RF

from analogues/simulation studies After production - valuable check on estimates

fr other methods

HC in place calculation:

GRV X NTG X POROSITY X (1-Sw) -------------------------------------------------

Bowhere, GRV= gross rock volume

NTG= net to grossSw= water saturationBo= formation volume factor

OOIP (m3)

OOIP (STB)

Recoverable oil volume

Example A:

1. Calculate the initial oil in place (OIP) in the field given the following data;

Area, A= 26,700acres Net productive thickness, h= 49 ft Porosity=8% Sw= 45% Bo=1.68 bbl/STB2. Calculate the recoverable volume from 1.

Solution OIP (STB) = 7758 x A x h x por x (1-Sw) x (1/Bo)

= 7758 x 26700 x 49 x 0.08 x (1-0.45) / 1.68= 265827870 STB=~266 MMSTB

OIP (cubic meter) = ? Recoverable = ?

But if data not given, where to get??

A AreaH Interval thicknessN/G Net / Gross ratio

P Porosity

Sw Water Saturation

Bo Shrinkage factor

RF Recovery factor

GeologistGeophysicist Petrophysist

Reservoir Engineer

Major SourceMinor Source

But how/where do they get it?

Recoverable volume =GRV x NTG x POR X (1-Sw) X 1/Bo x RF

GRV, Gross Rock Volume calculation-Area-Volume-Lets try

But how/where do they get it?

Recoverable volume =GRV x NTG x POR X (1-Sw) X 1/Bo x RF

Net To Gross-gross-cut off-net

But how/where do they get it?

Recoverable volume =GRV x NTG x POR X (1-Sw) X 1/Bo x RF

Porosity Water saturation-average over a zone or as weighted average

But how/where do they get it?

Recoverable volume =GRV x NTG x POR X (1-Sw) X 1/Bo x RF

Formation volume factor-change in oil volume between reservoir condition

and standard condition at surface-function of fluid composition, reservoir P, T (thus

related to reservoir depth)-for prospects usually use analogous offset field..

But how/where do they get it?

Recoverable volume =GRV x NTG x POR X (1-Sw) X 1/Bo x RF

Recovery factor-one of most important yet one of most difficult-influenced by fvf, viscosity, density, solution

gas/oil ratio-also depends on reservoir drive mechanism

RF based on drive mechanism:

Some industry standard for various natural drive mechanisms,

Solution gas drive 2-30%Gas cap drive 30-60%Water drive 2-50%

PRIMARY COMPONENTS OF PROSPECT VALUATION

EXPLORER MAIN RESPONSIBILITIES

Identifying the prospectsMeasuring (Estimating) the:Prospect Reserves = Size & Volume Confidence level = chance of successProfitability of the venture = flow rate, price schedule and economic consideration

A lot of uncertainties.. how?

Volumetric Estimation

Deterministic Probabilistic

Methods of Calculating Volume of oil: STOIIP

Probabilistic method

Deterministic method

Quick look estimation = single valueSparse Data = use average field values

Statistical estimation = range of valuesSparse data = use distribution of field valuesTake into consideration uncertainty associated with the field data

How to calculate GRV?

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