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Determination of Oil and Gas Reserves

Petroleum Society Monograph No.1


THE PETROLEUM SOCIETY
OF THE CANADIAN INSTITUTE OF MINING, METALLURGY AND PETROLEUM

Determination of
Oil and Gas Reserves
Petroleum Society Monograph No.1
1994 by The Petroleum Society of the Canadian Institute of Mining, Metallurgy and
Petroleum, Calgary Section.
All rights reserved. First edition published 1994.
Printed in Canada.

10 9 8 7 6 5 4 3 2

Permission is granted for individuals to make single copies for their personal use in
research, study, or teaching and to use figures, tables and short quotes from this
monograph for republication in scientific books and journals. There is no charge for
any of these uses. The publisher requests that the source be cited appropriately.

Canadian Cataloguing in Publication Data

Main entry under title:

Determination of oil and gas reserves.

(Petroleum Society monograph; no. I)


Includes bibliographical references and index.
ISBN 0-9697990-0-4

I. Petroleum reserves. I. Petroleum Society of CIM. II. Series.


TN871.D47 1994 622'.1828 C94-910092-7

Edited by Virginia MacKay.


Cover design by Guy Parsons.
Typesetting and graphic design by lA. (Sandy) Irvine, By Design Services.
Printed and bound in Canada by D.W. Friesen Ltd., Altona, ME.
CONTENTS

Figures xiv
Tables xvii
Foreword xix
Preface xxi
Acknowledgements xxiii
Authors .' xxiv

PART ONE: DEFINITIONS AND GUIDELINES


FOR CLASSIFICATION OF OIL AND GAS RESERVES

1. OVERVIEW OF PART ONE 3


2. DEFINITIONS 4
2.1 Introduction 4
2.2 Resources 4
2.2.1 Discovered Resources or Initial Volumes in Place 5
2.2.2 Undiscovered Resources or Future Initial Volumes in Place 5
2.3 Remaining Reserves 5
2.3.1 Remaining Proved Reserves 5
2.3.2 Probable Reserves 5
2.3.3 Possible Reserves 5
2.3.4 Development and Production Status 6
2.4 Cumulative Production 7
2.4.1 Sales 7
2.4.2 Inventory 7
2.5 Reserves Ownership 7
2.6 Specified Economic Conditions 8
2.7 Reporting of Reserves Estimates 8
2.7.1 Risk-Weighting of Reserves Estimates 8
2.7.2 Aggregation of Reserves Estimates 8
2.7.3 Barrels of Oil Equivalent 9
3. GUIDELINES FOR ESTIMATION OF OIL AND GAS RESERVES 10
3.1 Introduction 10
3.2 Methods ofCaiculating Reserves 10
3.2.1 Deterministic Procedure 10
3.2.2 Probabilistic Procedure II
3.3 Guidelines for Specific Methods 12
3.3.1 Volumetric Method 12
3.3.2 Material Balance Method 17
3.3.3 Decline Curve Analysis 18
3.3.4 Reservoir Simulation Method 22
3.3.5 Reserves from Improved Recovery Projects 22
3.3.6 Related Products 22

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PART TWO: DETERMINATION OF IN-PLACE RESOURCES

4. OVERVIEWOF PART TWO 27


4.1 Introduction 27
4.2 Resource Estimates 27
4.2.1 Volumetric Estimates 27
4.2.2 Material Balance Estimates 30
4.3 Procedures for EstimatingIn-Place Resources 30
4.4 Sources and Reliability of Data 31
4.5 Interrelationship of Parameters 31
4.6 Uses of Resource Estimates 31
4.7 Backgroundand Experience of Evaluators 34
5. ESTIMATION OF VOLUMES OF HYDROCARBONS IN PLACE 35
5.1 Reservoir Area and Volume 35
5.1.1 Introduction 35
5.1.2 Acquisition of Data 35
5.1.3 Data Analysis 36
5.1.4 Mapping 38
5.1.5 Refinementof Volumetric Estimates 43
5.2 Thickness 44
5.2.1 Introduction 44
5.2.2 Defining Net Pay 45
5.2.3 Data Acquisition Programs 46
5.2.4 Data Interpretation 48
5.2.5 Factors Affecting Data Quality 49
5.3 Permeability 53
5.3.1 Introduction 53
5.3.2 Permeabilityfrom Core 53
5.3.3 Relative Permeability Measurement 54
5.4 Porosity 55
5.4.1 Introduction 55
5.4.2 Sources and Acquisition of Data 55
5.4.3 Analysis of Data 58
5.4.4 Factors Affecting Data Quality 63
5.5 Hydrocarbon Saturation 65
5.5.1 Introduction 65
5.5.2 Saturation Determination From Core 65
5.5.3 Saturation Determination From Logs 69
5.5.4 Flow Test Procedures for Gas and Oil Saturation 70
5.5.5 Factors Affecting Data Quality 72
5.6 Testing and Sampling 75
5.6.1 Introduction 75
5.6.2 DrillstemTests 75
5.6.3 Production Tests 75
5.6.4 Sampling 77
5.7 Reservoir Temperature 81
5.7.1 Introduction 81
5.7.2 Data Sources 81
5.7.3 Data Analysis 82
5.7.4 Data Analysis on a Regional Basis 82

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5.7.5 Data Quality 85
5.8 Reservoir Pressure 86
5.8.1 Introduction 86
5.8.2 Data Sources 86
5.8.3 Data Analysis 86
5.9 Gas Formation Volume Factor 91
5.9.1 Introduction 91
5.9.2 Ideal Gas Law 91
5.9.3 Gas Compressibility Factor 91
5.9.4 Sour Gas 92
5.9.5 Derivation of Gas Formation Volume Factor 94
5.10 Oil Formation Volume Factor 96
5.10.1 Introduction '" 96
5.10.2 Data Sources 96
5.10.3 Data Acquisition 96
5.10.4 Data Analysis 96
5.10.5 Data Adjustment 98
5.10.6 Summary '" 100
5.11 Quality and Reliabilityof Data and Results 101
5.11.1 Introduction 101
5.11.2 Permeabilityfrom Cores 101
5.11.3 Porosity from Cores 101
5.11.4 Saturations from Cores 102
5.11.5 Effective Porous Zone and Net Pay from Cores 102
5.11.6 Porosity from Well Logs 103
5.11.7 Water Saturations from Well Logs '" 103
5.11.8 Effective Porous Zone and Net Pay from Well Logs 103
5.11.9 Drillstem Tests 104
5.11.10 Production Tests 104
5.11.11 Reservoir Fluid Samples 104
5.11.12 Reservoir Temperature 104
5.11.13 Reservoir Pressure 104
5.11.14 GasCompressibilityFactor 105
5.11.15 Formation Volume Factor 105
5.11.16 Material Balance 105
5.11.17 Interrelationships 105
6. PROBABILITYANALYSIS FOR ESTIMATES OF HYDROCARBONS IN PLACE 106
6.1 Introduction 106
6.2 Warren Method Theory 107
6.3 Application 108
6.4 Typical Situation: Conventional Gas 110
7. MATERIAL BALANCE DETERMINATION OF HYDROCARBONS IN PLACE 120
7.1 Introduction 120
7.2 Underlying Assumptions 120
7.3 Explanation of Terms 121
7.4 General Material Balance Equation ..................................... 122
7.5 Special Cases of the Material Balance Equation 122
7.5.1 Undersaturated Oil Reservoirs 122
7.5.2 Saturated Oil Reservoirs 123
7.5.3 Gas Reservoirs 123

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7.6 Limitations of Material Balance Methods 123
7.7 Supplemental Calculations 124
7.7.1 Gas Caps and Aquifers 124
7.7.2 Water Influx Measurements 124
7.7.3 Analytical Water Influx Models 124
7.8 Multiple Unknown Material Balance Situations 125
7.9 Computer Solutions 127

PART THREE: ESTIMATION OF RECOVERY FACTORS AND


FORECASTING OF RECOVERABLE HYDROCARBONS

8. OVERVIEW OF PART THREE 131


8.1 Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 131
8.2 Purpose of Depletion Strategy 131
8.3 Techniques for Reserves and Production Forecasting 132
9. NATURAL DEPLETION MECHANISMS FOR OIL RESERVOIRS 133
9.1 Introduction 133
9.1.1 Fluid Expansion 133
9.1.2 Solution Gas Drive 133
9.1.3 WaterDrive 134
9.1.4 Gas Cap Drive , 134
9.1.5 Compaction Drive 134
9.1.6 CombinationDrive 135
9.2 Forecasting of Recoverable Oil 135
9.2.1 Solution Gas Drive 137
9.2.2 Water Drive 137
9.2.3 Gas Cap Drive 140
9.2.4 CombinationDrive 140
9.3 Factors Affecting Oil Recovery 140
9.3.1 Production Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140
9.3.2 Oil Quality 141
9.3.3 Reservoir Characteristics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 141
9.3.4 Reservoir Geometry 141
9.3.5 Effects of Economic Limit 142
10. DEPLETION MECHANISMS FOR NATURAL GAS RESERVOIRS 145
10.1 Introduction 145
10.2 Characteristics of Natural Gas 145
10.3 Definition of Reservoir Types from Phase Diagrams 146
10.4 Gas Recovery 147
10.5 Gas Reserves 148
10.5.1 Nonassociated Gas Reserves Determination .. , 148
10.5.2 Solution Gas Reserves Determination 150
10.5.3 Associated Gas Reserves Determination 150
10.6 Pipeline Gas Reserves 150
10.7 Reserves of Related Products 151
10.7.1 Natural Gas Liquids 151
10.7.2 Sulphur 151
10.8 Gas Deliverability Forecasting 151
10.9 Well Spacing 152
10.10 Cycling of Gas Condensate Reservoirswith Dry Gas 152

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10.11 Secondary Recovery of Gas 153
10.12 EnhancedGasRecovery 153
II. ENHANCED RECOVERY BY WATERFLOODING 154
11.1 Introduction 154
11.2 Displacement Process 154
11.2.1 Mobility Ratio 154
11.2.2 Interfacial Tension 154
11.2.3 Fractional Flow 155
11.3 Types of Waterfloods 156
11.4 Analysis Methods and When to Apply Them 156
11.4.1 Pool Discovery 157
11.4.2 Delineated Pool: Immature Depletion 157
11.4.3 Post-Injection Startup 158
11.4.4 Post-Watertlood Response 158
11.4.5 Mature Watertlood 158
U.s Volumetric Analysis 158
11.5.1 Overview of Method 158
11.5.2 Parameters and Factors Affecting Analysis 158
11.5.3 Reliability of Results 162
11.6 Decline Performance Analysis 162
11.6.1 Overview of Method 162
11.6.2 Factors Affecting Analysis 162
11.6.3 Reliability of Results 163
11.7 Comparison to Analogous Pools 163
11.7.1 Overview of Method 163
11.7.2 Procedure and Factors Affecting Analysis 163
11.7.3 Reliability of Results 164
11.8 Analytical Performance Prediction 164
11.8.1 Overview of Methods 164
11.8.2 Reliability of Results 164
11.9 Numerical Simulation 166
11.9.1 Overview of Method 166
11.9.2 Parameters and Factors Affecting Analysis 166
11.9.3 Reliability of Results 166
11.10 Waterflooding Variations 167
11.10.1 Naturally Fractured Reservoirs 167
11.10.2 Polymer Flooding 168
11.10.3 Micellar Flooding 168
11.11 Statistical Watertlood Analysis Survey 168
11.11.1 Overview of Database 168
11.11.2 Discussion of Results 168
12. ENHANCED RECOVERY BY HYDROCARBON MISCIBLE FLOODING 171
12.1 Introduction 171
12.2 Types of Hydrocarbon Miscible Floods 171
12.2.1 Vertical Miscible Floods 171
12.2.2 Horizontal Miscible Floods 172
12.3 Methods of Achieving Miscibility 172
12.3.1 First-Contact Miscible Process 172
12.3.2 MUltiple-Contact Miscible Process 172
12.3.3 Vapourizing Multiple-Contact Miscibility 173

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12.4 Experimental Methods to Determine Miscibility 173
12.4.1 P-X Diagram 173
12.4.2 Multi-Contact Ternary Diagram 174
12.4,3 Slim Tube Test 174
12.4.4 Rising Bubble Apparatus 174
12.5 Screening and Feasibility Studies 174
12.5.1 Volumetric Method 175
12.5.2 Break-Through Ratio Method 177
12.5.3 Geological Model 177
12.5.4 Simulation Studies 177
12.5.5 Estimation of Uncertainties 178
12.5.6 Determination of Solvent and Chase Gas Slug Size 178
12.5.7 Field Performance of Miscible Floods 179
12.6 Classification of Miscible Hydrocarbon Reserves 179
12.6.1 Possible Reserves 179
12.6.2 Probable Reserves 180
12.6,3 Proved Reserves 180
13. ENHANCED RECOVERY BY IMMISCIBLE GAS INJECTION 183
13.1 Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 183
13.2 Types of Floods 183
13,3 Performance Prediction 184
13.3.1 External Injection Schemes 185
13,3.2 Dispersed Gas Injection Schemes 185
14. ENHANCED RECOVERY BY THERMAL STIMULATION 187
14.1 Introduction 187
14.2 Cyclic Steam Stimulation 187
14.2.1 Process Variation 187
14.2.2 Field Examples 188
14.2.3 Recovery Mechanisms 188
14.2.4 Design Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 188
14.3 Steam Flooding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 189
14.3.1 Process Variation 189
14,3.2 Design Considerations 189
14.4 Causes of Failure for Cyclic Steam Stimulation and Steam Flood Processes 190
14.5 Forecasting Models 191
14.5.1 Marx and Langenheim Model 191
14.5.2 Myhill and Stegeimeier Model 193
14.5,3. Vogel Model 194
14.5.4 ButierModel 194
14.6 In Situ Combustion Processes 194
14.6.1 Recovery Mechanisms 195
14.6.2 Process Variations 195
14.6.3 Design Considerations 195
14.6.4 Causes of Failure , , 196
14.7 Electromagnetic Heating 196
15. ENHANCED RECOVERY BY CARBON DIOXIDE FLOODING 200
15.1 Introduction , 200
15.2 Process Review , 200
15.3 Recovery Mechanisms 201

x
15.4 Design Considerations 201
15.4.1 Phase Behaviour 201
15.4.2 Displacement Efficiency 201
15.4.3 Volumetric Sweep Efficiency 202
15.4.4 Slug Sizing 202
15.5 Reserve Evaluation 202
15.6 Field Applications 203
16. RESERVES ESTIMATION FOR HORIZONTAL WELLS 205
16.1 Introduction 205
16.2 Reserves Determination Techniques 206
16.2.1 Performance Projection 206
16.2.2 Volumetric Method 209
16.2.3 Role of Heterogeneities ; 209
16.2.4 Importance of Channelling in Reserves Performance 209
16.2.5 Recovery Factors 210
16.3 Determination of Reserves 211
16.3.1 Determination of Reserves Parameters 211
16.3.2 Key Elements 211
16.3.3 Steps Involved in Reserves Determinations 211
17. NUMERICAL SIMULATION 214
17.1 Introduction 214
17.2 Types of Reservoir Simulators 214
17.3 Mathematical Formulation 215
17.4 Anatomy of Reservoir Simulation 216
17.5 Data Requirements 216
17.5.1 ReservoirGeometry 216
17.5.2 Rock and Fluid Properties 216
17.5.3 ProductionandWellData 216
17.6 Reservoir Model Grid Design 217
17.7 Reservoir Model Initialization 218
17.8 Model Sensitivity Analysis 218
17.9 History Matching 219
17.10 Forecasting Reservoir Performance 219
17.11 Use and Misuse of Reservoir Simulation 220
17.12 Summary 220
18. DECLINE CURVE METHODS 222
18.1 Introduction 222
18.2 Source and Accuracy of Production Data 222
18.3 Terminology 223
18.4 Single-Well vs. Aggregated-WellMethods 223
18.5 Decline Curve Methods for a Single Well 224
18.5.1 Exponential Decline 225
18.5.2 Hyperbolic Decline 226
18.5.3 Harmonic Decline 229
18.5.4 Dimensionless Solutions and Type-Curve Matching 230
18.6 Decline Curve Methods for a Group of Wells 231
18.6.1 Statistical Method 231
18.6.2 Theoretical Methods 234
18.7 Summary 235

Xl
19. RECOVERY FACTOR STATISTICS , 237
19.1 Introduction 237
19.2 Data Source and Reliability 237
19.3 Conventional Crude Oil 238
19.3.1 Natural or Primary Drive Mechanisms 238
19.3.2 Oil Recovery Factor Distributions 239
19.3.3 Average Recovery Factors 240
19.3.4 Pool Size 240
19.3.5 Fluid Type: Light and Medium vs. Heavy 241
19.3.6 Lithology: Clastics vs. Carbonates " 242
19.3.7 Geological Period 243
19.3.8 Geological Play '" . 243
19.3.9 Recovery vs, Common Reservoir Parameters 247
19.4 Conventional Gas 247
19.5 Using Recovery Factor Statistics 249

PART FOUR: PRICES, ECONOMICS, AND MARKETS

20. OVERVIEW OF PART FOUR 253


21. CASH FLOW ANALySIS 254
21.1 Introduction 254
21.2 Mineral Rights Ownership 254
21.3 Principal Sources and Uses of Cash 255
21.4 Royalties and Mineral Tax 257
21.5 Federal Corporate Income Tax 261
21.6 Financial Statements 263
21.7 Finance and Economic Considerations 264
22. UNCERTAINTY AND RISK IN RESERVES EVALUATION 266
22.1 Introduction 266
22.2 Concepts 266
22.2.1 Definition of Risk and Uncertainty 266
22.2.2 Describing Uncertainty 266
22.2.3 Areas of Uncertainty 266
22.2.4 Causes of Uncertainty 268
22.2.5 Magnitude of Uncertainty 271
22.2.6 Use of Uncertainty 271
22.3 Estimation of Uncertainty 273
22.3.1 Parameters to be Estimated 273
22.3.2 Empirical Classification 273
22.3.3 Quantifying Subjective Estimates 274
22.3.4 Quantitative Estimation 274
22.4 Methods of Analysis 275
22.4.1 Carrying Out a Stochastic Evaluation 275
22.4.2 Decision Matrices 276
22.4.3 Decision Trees 277
22.4.4 Probabilistic Simulation 277
22.5 Evaluation of Undeveloped Lands 278

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23. THE REGULATORY ENVIRONMENT 281
23.1 Introduction 281
23.2 Resource Assessments 281
23.3 Mineral Ownership 282
23.4 Economic Development Policies 282
23.5 Conservation Controls 283
23.5.1 Field Development and Production Conservation 283
23.5.2 Consumer Demand Conservation 283
23.6 Development, Operating, and Environmental Regulations 283
23.7 Domestic Supply Assurance 284
23.8 Fiscal Policies 285
23.9 Business Regulations 285
23.10 International Policies 285
24. CRUDE OIL MARKETS 287
24.1 Introduction 287
24.2 Transportation Network 288
24.3 Major Markets 290
24.4 North American Pricing 291
24.5 Price Risk Management 294
24.5.1 Futures 294
24.5.2 Options 295
24.5.3 Swaps 295
24.6 Outlook and Challenges 295
25. NATURAL GAS MARKETS 297
25.1 Introduction 297
25.2 The Market Environment 297
25.2.1 Review of Pre-Deregulation Era 297
25.2.2 Review of Current Era 298
25.2.3 Preview of Future Era 300
25.3 Market Mechanisms and Market Forces 300
25.3.1 Market Types and Market Mechanisms 300
25.3.2 Market Demand Forces 302
25.3.3 Production Forecasting 304
25.4 The Role of Reserves 304
25.5 Conclusions 305
26. USES OF RESERVES EVALUATIONS 306
26.1 Introduction 306
26.2 Users of Reserves Volumes and Production Forecasts 306
26.2.1 Producers 306
26.2.2 Transporters 306
26.2.3 Governments 306
26.2.4 Gas Marketers 307
26.2.5 Other Users 307
26.3 Developing Values from Reserves Estimates 307
26.3.1 Profitability Indices 307
26.3.2 Incremental Economics 310
26.3.3 Acceleration Projects 310
26.4 Uses of the Values Derived from Reserves Estimates 311
26.4.1 Valuing Oil and Gas Companies 311

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26.4.2 Sale of ResourceProperties 312
26.4.3 Evaluation of UnexploredLands and ExplorationWells 313
26.4.4 Lending and Borrowing 314
26.4.5 Auditing Evaluations 314
26.4.6 Securities Reporting 315
26.4.7 Accounting Requirements 316
26.4.8 EstablishingFinding and Replacement Costs 317
26.4.9 Estimating Barrels of Oil Equivalent 318
26.4.10 EstimatingNet-Back Calculations 320

Biographies ofAuthors 32i


Acronyms 329
Glossary 333
Bibliography 345
Author index 349
Subject index 353

FIGURES
2.1-1 Resources 4
2.1-2 Reserves 6
2.5-1 Reserves Ownership 7
3.3-1 Single Well Oil Pool with Good Geological Control 13
3.3-2 Conventional Gas Pool, Zero Limit of Net Pay Map 14
3.3-3 Conventional Gas Pool, Zero Limit of Net Pay Map
with Individual Well Assignments 15
3.3-4 Conventional Gas Pool, Zero Limit of Net Pay Map
with Area of Proved Reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. 15
3.3-5 Conventional Gas Pool, Zero Limit of Net Pay Map
with Area of Proved Plus ProbableReserves 16
3.3-6 Material Balance (Gas Reservoir) 18
3.3-7 Material Balance (Scattered Data) 19
3.3-8 Material Balance (ReservoirDrive and Depletion Mechanism) 19
3.3-9 Decline Curve, Proved Reserves ., 20
3.3-10 Decline Curve, Cumulative Gas Production 21
3.3-11 Decline Curve, Cumulative Oil Production 21
5.1-1 Pressure-Depth Plot for Free Water Level Determination 38
5.1-2 Cross Contouring 40
5.1-3 Series of Related Maps (zero edge from seismic,
computer-contoured) (ZYCOR Software) 41
5.1-4 Examples of Mechanical and Interpretive Mapping 42
5.2-1 Reservoir IntervalTerminology 44
5.2-2 Air Permeabilityvs. Porosity 46
5.2-3 Flow Chart for a Core Analysis Program 47
5.2-4 Hydrocarbon Fluid ContactIdentification from Pressure Gradients 49
5.2-5 Sand Unit Shape Diagram 51
5.4-1 Porosity of Cubic-Packed Spheres 55
5.4-2 Typical Core Analysis Report 59
5.4-3 Porosity vs. Horizontal Permeability 60

xiv
5.4-4 Core Analysis Report: Analytical Summary Sheet 60
5.4-5 Porosityfrom Formation Density Log 61
5.4-6 Porosityfrom Sonic Log 61
5.4-7 Neutron PorosityEquivalence Curves 62
5.4-8 Porosityand Lithology Determination from Neutron-Density Log 62
5.4-9 Impact of Clay on Log and Core Measurements 64
5.5-1 Porosityvs. Formation Factor 67
5.5-2 Formation Resistivity Index 68
5.5-3 Air Brine Capillary Pressure Test 70
5.5-4 Log Interpretation Flow Chart 71
5.5-5 Dual Water Model 72
5.5-6 Shaly Sand Interpretation Process 73
5.6-1 DrillstemTest Tool (UnsetPosition) 76
5.6-2 DrillstemTest Tool (Set Position) : ; 76
5.7-1 Representative Homer Plots from Wellsin the Utah-Wyoming
Thrust Belt 83
5.7-2 Relief Map for Southern Alberta 83
5.7-3 ContourPlot of Spreadfor BHTValues in Southern Alberta 83
5.7-4 Examples of Temperature vs. Depth Plots
from Two Areas in Southern Alberta 84
5.8-1 Static Gradient 87
5.8-2 Pressure vs. Time 87
5.8-3 Homer Plot 88
5.8-4 PorosityVolume Map 89
5.9-1 Compressibility Factors for Natural Gases 93
5.10-1 Comparison of Formation Volume Factor
by Differential and Flash Liberation 96
6.3-1 Estimation of Reef Volume 110
6.4-1 Typical Situation: Gas Pool Map III
6.4-2 Conversion of Base Area to Average Pool Area 113
6.4-3 Typical Situation: Gas-in-Place Distribution 116
6.4-4 Typical Situation: Reserve Distribution 118
6.4-5 Typical Situation: Discounted Net Profit Before Investment 119
7.7-1 StraightLine Plot for Oil Zone and Gas Cap Case 126
7.7-2 StraightLine Plot for Oil Zone and Water Influx Case 127
9.1-1 SolutionGas DriveReservoir 133
9.1-2 Comparison of Solution Gas Drive and Water Drive Reservoirs 134
9.1-3 Gas Cap Drive Reservoir 135
9.2-1 Recommended Methods for the Stages of Exploitation 135
9.3-1 Relationship Between Production Rate and Reserves 141
9.3-2 Relationship Between Well Spacing and Abandonment Pressure 143
9.3-3 Optimum Well Spacing 143
9.3-4 Effectsof FacilityConstraints on Economic Limit 143
10.2-1 Classification of Gas Based on Source in Reservoir 145
10.2-2 Occurrence of Oil and Gas 146
10.3-1 Pressure-Temperature Phase Diagram of a Reservoir Fluid 147
10.3-2 Phase Diagram of a Cap Gas and Oil Zone Fluid 147
10.5-1 Plot ofP/Z vs. Cumulative Gas Production 150
10.5-2 Effect of Water Drive on Pressure Decline 150
10.8-1 Back Pressure Plot 152
10.8-2 Gas Deliverability Plot 152

xv
11.2-1 Effect of Oil Viscosity on Fractional Flow Curve,
Strongly Water-Wet Rock 155
11.2-2 Effect of Oil Viscosity on Fractional Flow Curve,
Strongly Oil-Wet Rock 155
11.3-1 Cross Section for Vertical Waterflood 156
11.3-2 Plan View for Horizontal Waterflood 156
11.3-3 Flood Patterns for Horizontal Flood Schemes 157
11.5-1 Effect of Mobility Ratio on Oil Production for the Five-Spot Pattern 159
12.3-1 Pseudo-Ternary Diagram Indicating First-Contact Miscibility 172
12.3-2 Development of Multiple-Contact Miscibility Condensing Process . . . . . . 173
12.3-3 Development of Multiple-Contact Miscibility Vapourizing Process 173
12.5-1 Reserves Distribution 178
13.2-1 Gas Injection 184
14.5-1 Types of Analytical Gravity Drainage Models 192
14.5-2 Thermal Efficiency of Steam Zone as a Function
of the Dimensionless Time Parameter 193
16.2-1 Schematic of Horizontal and Vertical Well Drainage Areas 208
17.2-1 Schematic Diagram of Matrix-Fracture Connectivity 215
17.3-1 Mass Balance on Reservoir Element 215
17.6-1 2D Areal Model 217
17.6-2 2D Vertical Model 217
17.6-3 2D Radial Model .......................................... 217
17.6-4 3D Model 218
18.3-1 Reservoir Performance Chart 224
18.3-2 Production Performance Chart 224
18.5-1 Exponential Decline Chart 226
18.5-2 Decline Curve Analysis Chart Relating Production Rate to Time 227
18.5-3 Decline Curve Analysis Chart Relating Production Rate
to Cumulative Production 227
18.5-4 Hyperbolic Curve Overlay 228
18.5-5 Production Performance Graphs 229
18.5-6 Composite of Analytical and Empirical Type Curves 230
18.6-1 Production Performance Graph 232
18.6-2 Rate-Cumulative Production Graph 232
18.6-3 Distribution of Well Rates, Pembina Cardium Pool 233
18.6-4 Rate-Ratio-Cumulative Graph, Pembina Cardium POOl 234
18.6-5 Production Performance Graphs, Pembina Cardium Pool 234
19.3-1 Oil Pools 239
19.3-2 Distribution of Primary Oil Recovery Factors 240
19.3-3 Large Mature Oil Pools 241
19.3-4 Light and Medium Oil Pools 241
19.3-5 Heavy Oil Pools 242
19.3-6 Clastic Oil Pools 242
19.3-7 Carbonate Oil Pools 242
19.3-8 Upper Cretaceous Oil Pools 243
19.3-9 Lower Cretaceous Oil Pools 243
19.3-10 Jurassic Oil Pools 244
19.3-11 Triassic Oil Pools 244
19.3-12 Permian Oil Pools 244
19.3-13 Mississippian Oil Pools 244
19.3-14 Upper Devonian Oil Pools 245

xvi
19.3-15 Middle Devonian Oil Pools 245
19.3-16(a) Oil Recovery vs. Porosity 247
19.3-16(b) Porosity Distribution 247
19.3-17(a) Oil Recovery vs. Net Pay 248
19.3-17(b) Net Pay Distribution 248
19.3-18(a) Oil Recovery vs. Water Saturation 248
19.3-18(b) Water Saturation Distribution 248
19.3-19 Gas Pools (Producing) 249
19.3-20 Large Gas Pools (Producing) 249
22.2-1 Risk and Uncertainty 267
22.2-2 Level of Uncertainty in Reserves Estimates
during the Life of a Producing Property 269
22.2-3 The Effect of Error and Bias on a Reserve Estimate 270
22.2-4 Expectation Curves: Comparison of Results 271
22.2-5 Expectation Curve: Reconciliation of Different Views
of Hydrocarbon Volumes and Values 272
24.2-1 Major Alberta Pipeline Systems 288
24.2-2 Major Crude Oil Pipelines and Refining Areas 289
24.4-1 NYMEX WTI Prices at Cushing 293
24.4-2 Alberta Crude Oil Pricing, Chicago Market (July 1992) 293
25.3-1 Commercial and Regulatory Mechanisms for Ex-Alberta Markets 301
25.3-2 Gas Marketing Options 302
25.3-3 Reserves Connection to Markets 303

TABLES
4.2-1 In-Place Volumes of Related Products 30
4.4-1 Sources of Data 32
5.4-1 Comparison of Techniques of Determining Porosity 56
5.5-1 Wettability and Interfacial Tension 69
5.10-1 Pressure Volume Relations 98
5.10-2 Separator Tests of Reservoir Fluid Sample 99
5.10-3 Differential Vapourization 99
6.1-1 In-Place Volumetric Estimation Techniques 107
6.4-1 Gas-in-Place Distribution for Most Likely Area of384 Hectares 114
6.4-2 Gas-in-Place Distribution for Most Likely Area of 576 Hectares 115
6.4-3 Gas-in-Place Distribution for Most Likely Area of 704 Hectares 115
6.4-4 Gas-in-Place Distribution for Most Likely Area of 576 Hectares,
Variable Temperature and Gas Deviation Factor 117
6.4-5 Reserve Distribution for Most Likely Area of 576 Hectares 118
6.4-6 Discounted Net Profit Before Investment Distribution
for Most Likely Area of 576 Hectares 119
7.2-1 ReservoirVoidage Terms 121
7.2-2 Reservoir Expansion Terms 122
9.2-1 Recommended Reserves Forecasting Methods 136
9.2-2 Decline Analysis Plots Used after Water Break-through 139
10.7-1 Recoveries of Related Products 151
11.8-1 Classification of 33 Waterflood Prediction Methods 165
11.11-1 Summary of Recovery Factors: A Sampling
of Western Canadian Waterfloods 169

xvii

7
11.11-2 Reserve Analysis Technique Distribution . . . . . . . . . . . . . . . . . . . . . . . . .. 169
13.3-1 Recommended Performance Prediction Methods 185
18.5-1 DeclineCurve Equations 225
18.6-1 Statistical Parameters for Pembina Cardium Pool 233
19.2-1 Public Data Available for Reserve Studies 237
19.3-1 Primary Oil Recovery by DriveMechanism 238
19.3-2 AverageOil Recoveries 241
19.3-3 Recovery Factors for Upper Devonian Zones 245
19.3-4 Recovery Factors for Geological Plays in WesternCanada 246
21.4-1 Summaryof AlbertaNatural Gas Royalty Changes 258
21.4-2 Summaryof Equations for Basic Royalty 259
21.4-3 Summaryof AlbertaCrude Oil RoyaltyRate Changes 259
21.5-1 Cash Flow and Income Tax Summary 262
24.3-1 Importers of Canadian HeavyCrude 292
26.4-1 Conversion Rates 318

XV1l1
FOREWORD

The estimating and reporting of reserves of oil and gas and related substances are of fundamental
importance to the oil and gas industry. Reserves estimates form the basis for most development and
operational decisions and are of critical importance in financing and other commercial arrangements
that allow oil and gas developments to proceed in an orderly and efficient manner. Reserves
estimates also playa key part in relevant planning and policy decisions by governments and others.
The role of reserves estimates in operational, financial and policy decisions emphasizes the need for
the estimates to be as accurate and current as possible. The use ofconsistent terminology and estima-
tion procedures is also essential. This monograph, Determination ofOil and Gas Reserves, has been
developed to assist in achieving the objectives of accuracy and consistency in estimating reserves.
The idea ofdeveloping such a monographwas conceivedby Dr. Roberto Aguilera who, as Chairman
of the Reserves Monograph Advisory Committee,has co-ordinatedthe preparation of the document.
The project was sponsored by the Calgary Section of the Petroleum Society ofthe Canadian Institute
of Mining, Metallurgy and Petroleum.
The first organizational meeting of the committee took place in the spring of 1990. Since that time,
members of the committee, on their own and with the support of their employers, have contributed
substantial time and expertise to the project and enlisted the help of many industry experts in the
preparation and critique of specific chapters. The objective was to develop a reference that would be
of substantial value to geologists, engineers and other technical persons involved in estimating re-
serves, as well as to others who use such estimatesfor particular purposes. With the publication ofthe
monograph in the spring of 1994, the committee will have achieved that objective.
A total of over fifty people have been involved in the planning, the writing and review of the
chapters, the drafting of figures, and the editing and preparation of the final copy for the printing of
the monograph. All those involved in estimatingoil and gas reserves, or who use such estimates, owe
them a vote of thanks. I am confident that the monograph will become a standard reference for all
practitioners of the science of estimating oil and gas reserves. It will also serve as an excellent train-
ing tool for persons who have only a basic understanding of reserves estimation methods and who
wish to advance their knowledge of the subject.
G. 1. DeSorcy, P.Eng.
Calgary, January 1994

xix

7
PREFACE

The estimation of reserves of oil, gas, and related substances has been a hot topic since the very
beginning of the oil industry. Over the ensuing years, the concept of reserves has meant different
things to different people within this industry, with each evaluator, oil and gas company, financial
agency, securities commission, and government department using its own version of the definitions.
The monograph represents our effort to find definitions and guidelines for the classification of
reserves that will be acceptable to all ofthese users.
When the concept of this monograph was first discussed, we wrestled with the question: "Should we
ask one or two professionals to prepare the whole monograph or should we ask a variety of specialists
to contribute to it?" In the end we concluded that we would not find one or two people with expertise
in all the topics concerned with oil and gas reserves, so we should use a number of knowledgeable
authors. We ended up with forty contributing authors and a group of reviewers who helped to polish
the thirty-seven topics covered in the twenty-six chapters ofthe monograph.
The topics have fallen into four major divisions that we have called "parts" in the monograph. Part
One presents the definitions and guidelines for the classification of oil and gas reserves. These have
been prepared by the Standing Committee on Reserves Definitions of the Petroleum Society of the
Canadian Institute of Mining, Metallurgy and Petroleum.
Part Two discusses the volumetric and material balance methods for estimating volumes of oil and
gas in place, various sources of data, and the interpretation of the data. Part Two also deals with
probabilistic methods for estimating the volumes of oil and gas contained in reservoirs, in addition to
the more common deterministic methods.
Part Three considers the estimation of recovery factors for oil and gas reservoirs, with particular
emphasis on volumes recoverable by enhanced recovery methods. Secondary and tertiary recovery
methods are discussed, as well as primary methods and the use of horizontal wells. Part Three also
addresses decline curve analysis and reservoir modelling by numerical simulation.
Part Four covers the other factors that must be considered in estimating reserves: cash flow analysis,
the assessment of uncertainty, the role of markets, and potential regulatory impacts that must be
recognized by evaluators. Part Four ends with a discussion of the uses that are made of reserves
estimates. This part proved to be very challenging to write as the diverse nature of the applications
of recovery estimates in economic evaluations led to some animated discussions between the
engineering and financial groups. But in the end, I think we put together some information that will
be useful to all the professionals who deal with economic evaluations.
(cont'd)

xxi

z
For simplicity, the nomenclature and units of measurement are defined following each equation. We
have used the metric system (SI), with Imperial units shown as well in some cases.
Following the text, we have included brief biographies of the authors and several lists for the
convenience of readers: Acronyms, Glossary, Bibliography, Author Index, and Subject Index.
It is our sincere hope that this monograph, Determination of Oil and Gas Reserves, will help to
simplify and standardize the science and art of estimating oil and gas reserves throughout the world.
Roberto Aguilera, P. Eng.
Calgary, January 1994

xxii
ACKNOWLEDGEMENTS

Associated with the publication of the monograph was the time-consuming and challenging task of
co-ordinating the material produced by forty authors with forty different backgrounds and forty dif-
ferent writing styles. The Reserves Monograph Advisory Committee did a superb job ofco-ordinating
the four parts of the monograph. As Chairman, I wish to thank the members of the committee for the
many hours they devoted to planning the work, meeting with the authors, and reviewing the drafts.
The following are the members of the committee with their company affiliations. We are grateful to
the employers for supporting the members in this endeavour.
N. Guy Berndtsson Energy Resources Conservation Board
Keith D. Brown Royal Bank of Canada
CAS. (Charlie) Bulmer Sproule Associates Limited
R.V. (Bob) Etcheverry CN Exploration Inc.
John Hewitt Martin Petroleum and Associates
R. V. (Bob) Lang Energy Consultant
W.V. (Bill) Mandolidis Saskatchewan Oil and Gas Corp.
Michael E. McCormack Fractical Solutions Inc.
r. Glenn Robinson Sproule Associates Limited
Roberto Aguilera, Chairman Servipetrol Ltd.
The work on the monograph involved authors and reviewers with backgrounds in government
regulations, banks, stock brokers, securities commissions, consultants, the University of Calgary,
and major, mid- and small-sized exploration and production companies. On the following pages are
listed the names and company affiliations of the authors of the various chapters and sections of the
monograph. These are the people who supplied the "meat" of the document through many volunteer
hours of labour-writing, revising, and consulting with others-on the material they were
responsible for.
In addition, we would like to thank the Petroleum Society ofCIM, Canadian Well Logging Society,
Society of Petroleum Engineers, Society of Professional Well Log Analysts, American Association
of Petroleum Geologists, and Alberta Energy Resources Conservation Board, as well as Western
Atlas International Inc., Schlumberger, Gulf Publishing Co., PanCanadian Petroleum Ltd., Chevron
Canada Resources, and PennWell Publishing Co. for permission to use material from their
publications.
We also express our gratitude to all of the various authors and organizations that have published
material on reserves estimation and thereby added to the body of knowledge on this subject.
Virginia MacKay, P.Eng., the professional editor for this monograph, undertook the daunting task of
editing the material written by the forty different authors and assembling it all into one coherent
document. She was assisted very conscientiously by lA. (Sandy) Irvine, P.Geol., who entered the
text and figures on the computer. Together they prepared the camera-ready copy for the printer. Mike
McCormack checked the nomenclature throughout the monograph and also contributed to the compi-
lation ofthe Subject Index. Our sincere thanks to Virginia, Sandy, Mike, and all the authors, reviewers
and co-ordinators for their dedication to the quality of the monograph.
Roberto Aguilera, P. Eng.
Calgary, January 1994

XXlll

7
AUTHORS

Part One
Standing Committee on Reserves Definitions
GJ. (Gerry) DeSorcy Chairman
Energy Consultant
George A. Warne Secretary
Energy Consultant
R. V. (Bob) Lang Co-ordinator
Energy Consultant
J. Glenn Robinson Co-ordinator
Sproule Associates Limited
Barry R. Ashton
Ashton Jenkins and Associates Ltd.
Graham R. Campbell
National Energy Board
David R. Collyer
Shell Canada Limited
John Drury
Consultant (Ontario Securities Commission)
W.O. (Bill) Robertson
Price Waterhouse
David W. Tutt
Bank of Montreal

Note: All committee members contributed to the writing of Part One.

xxiv
AUTHORS (cant'd)

Part Two
N. Guy Berndtsson Co-ordinator
Energy Resources Conservation Board
CAS. (Charlie) Bulmer Co-ordinator
Sproule Associates Limited
Brent Austin Co-Author of Sections 5.2,
PanCanadian Petroleum Limited 5.3,5.4,5.5
Robin G. Bertram Co-Author of Section 5.6 and
Talisman Energy Inc. Author of Sections 5.8, 5.9
Mike J. Brusset Co-Author of Section 5.6 and
Brusset Consultants Ltd. Author of Section 5.11
Merlin B. (Mel) Field Author of Chapter 7
Consultant
J.D. (Joe) Giegerich Author of Sections 5.7, 5.10
Chevron Canada Resources
DJ. (Dave) Hemphill Author of Section 5.1
Shell Canada Limited
Craig F. Lamb Co-Author of Sections 5.2,
Lonach Consulting Ltd. 5.3, 5.4, 5.5
Raymond A. Mireault Author of Chapter 6
Gulf Canada Resources Limited

xxv

R
AUTHORS (cont'd)

Part Three
R.V. (Bob) Etcheverry Co-ordinator and
CN Exploration Inc. Author of Sections 8.1, 8.2
John M. Hewitt Co-ordinator and
Martin Petroleum & Associates Author of Section 8.3
Soheil Asgarpour Author of Chapter 12
Gulf Canada Resources Limited
Anthony D. Au Author of Chapter 17
Servipetrol Ltd.
Keith M. Braaten Co-Author of Chapter II
Coles Gilbert Associates Ltd.
RonM. Fish Author of Chapter 13
Imperial Oil Limited, Resources Division
Mam Chand Gupta Author of Chapter 10
GM International Oil and Gas Consulting Corp
William E. Kerr Co-Author of Chapter 15
Joss Energy
Gobi Kular Co-Author of Chapter 14
Advanced Petroleum Technologies
Dana B. Laustsen Co-Author of Chapter II
Coles Gilbert Associates Ltd.
Margaret Nielsen Co-Author of Chapter 9
Petro-Canada
David C. Poon Co-Author of Chapter 14
Consultant, D.C. Poon Consulting Inc.
Ross A. Purvis Author of Chapter 18
Energy Resources Conservation Board
Darlene A. Sheldon Co-Author of Chapter 9
Petro-Canada
Phillip M. Sigmund Co-Author of Chapter 15
BRTR Petroleum Consultants Ltd.
Ashok K. Singhal Author of Chapter 16
Petroleum Recovery Institute
Andy Warren Author of Chapter 19
Energy Resources Conservation Board

XXVI
AUTHORS (cont'd)

Part Four

Keith D. Brown Co-ordinator and


Royal Bank of Canada Authorof Chapters20, 21
Janusz Bielecki Authorof Chapter 24
National Energy Board
Noel A. Cleland Author of Chapter 26
Sproule Associates Limited
David C. Elliott Author of Chapter 22
Geosgil Consulting
Harold R. Keushnig Authorof Chapter 23
Energy Resources Conservation Board
Tim J. Reimer Author of Chapter 25
Pan-Alberta Gas Ltd.

xxvii
PART ONE
DEFINITIONS AND GUIDELINES

FOR CLASSIFICATION

OF OIL AND GAS RESERVES

7
Chapter 1

OVERVIEW OF PART ONE

There are almost as many definitions for reserves of oil The Standing Committee believes that the recommended
and gas and related substances as there are evaluators, definitions and guidelines are suitable for use with re-
oil and gas companies, financial agencies, securities spect to all types of oil and gas and related substances,
commissions, and government departments. Each including offshore reserves and oil sands. Although
uses its own version of the definitions for its own those segments of the industry have used somewhat
purposes. In addition, because of today's unstable different terms and definitions, the principles reflected
economic conditions in the oil and gas industry, the in the definitions recommended here are applicable. The
lower quality of the reservoirs being discovered, and fundamental principle is that those quantities that are
the new recovery methods being developed, it is be- known to exist and to be economically recoverable are
coming increasingly difficult to estimate the reserves reserves. The total quantities, whether or not they have
that will be produced. All ofthese factors have made it been discovered, are resources. Reserves and resources
imperative to develop a universal set of definitions for are further categorized depending on the level of
reserves that will meet the needs of all users. certainty that they will be recovered.
Part One of the monograph contains the definitions of It is the view of the Standing Committee that current
key terms, the system of reserves classification, and reserves estimation methods and categories, in general,
guidelines to illustrate the application ofthe definitions match the recommended definitions and guidelines.
and the classification system. The committee, therefore, does not expect that major
The task of writing the definitions was undertaken by changes to reserves estimates would result from adop-
the Standing Committee on Reserves Definitions ofthe tion of the definitions, although it recognizes that for
Petroleum Society of the Canadian Institute of Mining, some specific reserves estimates (generally for small
Metallurgy and Petroleum, and Part One of the mono- pools) changes could be significant. The committee
graph has been published as a separate document hopes that, over time, reserves evaluators will increas-
comprising the committee's 1993 report. The commit- ingly conform to the recommendations presented in this
tee includes representatives of oil and gas companies, monograph and thus contribute to the overall quality
geological and petroleum engineering consulting firms, and consistency of reserves estimates.
Canadian industry associations, financial and account- The Standing Committee received assistance from many
ing organizations, regulatory agencies, and government. individuals and organizations in the form of comments
The definitions ofkey terms and reserves classifications as it formulated the definitions and guidelines. The
presented in Chapter 2 are similar to those currently in committee will continue to communicate with inter-
use by the oil and gas industry, particularly in North ested parties to ensure that its intent with respect to the
America. They have been reviewed by users in the in- recommended definitions is fully understood. The
dustry and representatives from regulatory agencies, committee welcomes comments on its recommendations
government departments, industry associations, and as well as any other aspects of reserves definitions and
technical and professional organizations. their application. Since comments are being sought from
those that use the recommendations, it is reasonable to
Chapter 3 presents the guidelines that illustrate the
expect that the definitions may change with time. If they
application of the definitions and the classification
do, the revisions will be available from the Petroleum
system. These are intended to complement the de-
Society.
tailed guidelines on reserves estimation methods and
procedures that follow in subsequent chapters of the
monograph.

?
Chapter 2

DEFINITIONS

2.1 INTRODUCTION sub-classifications. Reserves ownership is also discussed


The terminology recommended for the classification of in this chapter.
estimated quantities ofoil and gas and related substances,
at a particular time, is presented in Figures 2.1-1 and 2.2 RESOURCES
2.1-2. Each term is defined in this chapter. Figure 2.1-1 Resources are the total quantities of oil and gas and
and its related definitions set the framework for Figure related substances that are estimated, at a particular time,
2.1-2 and its related definitions. to be contained in, or that have been produced from,
The major classifications identified in this chapter are known accumulations, plus those estimated quantities
resources, remaining reserves, and cumulative pro- in accumulations yet to be discovered.
duction, each of which can be further divided into

Figure 2.1-1 Resources

4
-I
DEFINITIONS

2.2.1 Discovered Resources or Initial Future Initial Reserves


Volumes in Place
Future initial reserves are those quantities of oil and
Discovered resources, which may also be referred to as gas and related substances that are estimated, at a par-
initial volumes in place (Figure 2.1-1), are those quan- ticular time, to be recoverable from accumulations yet
tities of oil and gas and related substances that are to be discovered by known technology under specified
estimated, at a particular time, to be initially contained economic conditions that are generally accepted as
in known accumulations that have been penetrated by a being a reasonable outlook for the future.
wellbore. They comprise those quantities that are re-
coverable from known accumulations and those that will Future Unrecoverable Volumes
remain in known accumulations, based on known tech- Future unrecoverable volumes are those quantities of
nology under specified economic conditions that are oil and gas and related substances that are estimated, at
generally accepted as being a reasonable outlook for a particular time, to remain in accumulations yet to be
the future. discovered because they are not recoverable by known
Initial Reserves technology under specified economic conditions that are
generally accepted as being a reasonable outlook for
Initial reserves are those quantities of oil and gas and the future.
related substances that are estimated, at a particular time,
to be recoverable from known accumulations. They in- 2.3 REMAINING RESERVES
clude cumulative production plus those quantities that Remaining reserves (Figure 2.1-2) are estimated
are estimated to be recoverable in the future by known quantities of oil and natural gas and related substances
technology under specified economic conditions that are anticipated to be recoverable from known accumula-
generally accepted as being a reasonable outlook for tions, from a given date forward, by known technology
the future. (Figure 2.1-2 shows how initial reserves are under specified economic conditions that are generally
classified.) accepted as being a reasonable outlook for the future.
Unrecoverable Volumes 2.3.1 Remaining Proved Reserves
Unrecoverable volumes (Figure 2.1-1) are those Remainingproved reserves are those remaining reserves
quantities of oil and gas and related substances that are that can be estimated with a high degree of certainty,
estimated, at a particular time, to remain in known ac- which for purposes ofreserves classification means that
cumulations because they are not recoverable by known there is generally an 80 percent or greater probability
technology under specified economic conditions that are that at least the estimated quantity will be recovered.
generally accepted as being a reasonable outlook for These reserves may be divided into proved developed
the future. and proved undeveloped to identify the status of devel-
Unrecoverable volumes may be further divided opment. The proved developed may be further divided
into currently uneconomic volumes, which are those into producing and nonproducing categories.
quantities that are currently estimated to be technically 2.3.2 Probable Reserves
recoverable, but that are not economically recoverable
Probable reserves are those remaining reserves that are
under the specified economic conditions, and residual
less certain to be recovered than proved reserves, which
unrecoverable volumes, which are those quantities that
for purposes of reserves classification means that gen-
are unrecoverable by known technologies.
erally there is a 40 to 80 percent probability that the
2.2.2 Undiscovered Resources or Future estimated quantity will be recovered. Both the estimated
Initial Volumes in Place quantity and the risk-weighted portion reflecting the
Undiscovered resources, which may also be referred respective probability should be reported. These reserves
to as future initial volumes in place (Figure 2.1-1), are can be divided into probable developed and probable
those in-place quantities of oil and gas and related sub- undeveloped to identify the status of development.
stances that are estimated, at a particular time, to exist 2.3.3 Possible Reserves
in accumulations yet to be discovered.
Possible reserves are those remaining reserves that are
less certain to be recovered than probable reserves, which
for purposes of reserves classification means that

7
DETERMINATION OFOIL AND GAS RESERVES

generally there is a 10 to 40 percent probability that open at the time of the estimate. These reserves may be
the estimated quantity will be recovered. Both the esti- currently producing or, if shut in, they must have
mated quantity and the risk-weighted portion reflecting previously been on production, and the date ofresump-
the probability should be reported. These reserves can tion of production must be known with reasonable
be divided into possible developed and possible certainty.
undeveloped to identify the status of development.
Developed Nonproducing Reserves
2.3.4 Development and Production Developed nonproducing reserves are those reserves that
Status either have not been on production, or have previously
Each of the three reserves classifications, remaining been on production, but are shut in, and the date of
proved, probable and possible, may be divided into de- resumption of production is unknown.
veloped and undeveloped categories (Figure 2.1-2). The
developed category for proved reserves is often divided Undeveloped Reserves
into producing and nonproducing. Undeveloped reserves are those reserves expected to be
recovered from known accumulations where a signifi-
Developed Reserves
cant expenditure (i.e., when compared to the cost of
Developed reserves are those reserves that are expected drilling a well) is required to render them capable of
to be recovered from existing wells and installed facili- production.
ties or, if facilities have not been installed, that would
In multi-well pools, it may be appropriate to allocate
involve a low expenditure to put the reserves on pro-
the total reserves for the pool between the developed
duction (i.e., when compared to the cost of drilling a
and undeveloped categories or to subdivide the devel-
well).
oped reserves for the pool between developed producing
Developed Producing Reserves and developed nonproducing. This allocation should be
based on the evaluator's assessment as to the reserves
Developed producing reserves are those reserves that
that will be recovered from specific wells, the facilities
are expected to be recovered from completion intervals

Figure 2.1-2 Reserves

6
DEFINITIONS

and completion intervals in the pool, and their 2.5 RESERVES OWNERSHIP
respective development and production status.
The terminology that is recommended for reporting the
2.4 CUMULATIVE PRODUCTION ownership of quantities of oil and gas and related sub-
stances is presented in Figure 2.5-1. The terms are
Cumulative production (Figure 2.1-2) comprises those
defined as follows:
marketable quantities of oil and gas and related sub-
stances that have been recovered to date from known Gross remaining reserves are the total remaining
accumulations. reserves associated with the property in which an owner
has an interest.
2.4.1 Sales Company* gross remaining reserves are the company's
Sales are produced quantities of oil and gas and related lessor royalty, overriding royalty and working interest
substances that have been sold to date. share ofthe gross remaining reserves, before deduction
of any Crown, freehold, and overriding royalties
2.4.2 Inventory
payable to others.
Inventory consists of quantities of oil and gas and
Company* net remaining reserves are the company's
related substances that have been produced and are
lessor royalty, overriding royalty, and working interest
available for future use.

Other Owner
Interest Reserves


Lessor Royalty Interests
Payable
Overriding Royalty Interests
Payable

Figure 2.5-1 Reserves Ownership

* The word "Company"may be replaced by moresuitable adjectives to better depictthe ownership of reserves, e.g., ABC Oil
and Gas, 9367 LimitedPartnership, John Doe, etc.

7
DETERMINATION OFOIL AND GAS RESERVES

share of the gross remaining reserves, less all Crown, for each variable.' If a deterministic procedure is being
freehold, and overriding royalties payable to others. used and a probabilistic determination is not available,
the following equality is recommended to approximate
2.6 SPECIFIED ECONOMIC the expected reserves:
CONDITIONS
In order for oil and gas and related substances to be expected = (proved ) + (p x probable) + (p x Possible)
classified as reserves, they must be economic to recover reserves reserves b reserves S reserves

at specified economic conditions. The estimator should


where Pb =probability of recovering the
use, as the specified economic conditions, a price fore-
probable reserves (80-40%)
cast and other economic parameters that are generally
accepted as being a reasonable outlook for the future. P, = probability of recovering the
The revenue, appropriately discounted, must be suff- possible reserves (40- I0%)
icient to cover the future capital and operating costs that For individual pools, the amount for the expected or
would be required to produce, process, and transport risk-weighted reserves provides the evaluator's best
the products to the marketplace. A more detailed dis- judgement as to the quantity that will be recovered from
cussion of discounting future cash flow is presented the pool. The probability used to adjust the estimated
in Chapter 21, Cash Flow Analysis, and in Chapter 26, quantity for a specific pool should be that considered
Uses ofReservesEvaluations. by the evaluator to be appropriate for the particular cir-
Ifrequired by securities commissions or other agencies, cumstance, taking into account the available geological,
current prices and costs may also be used. In either case, geophysical and engineering data. It is likely, however,
the economic conditions used in the evaluations should that the quantity actually recovered from a specific pool
be clearly stated. Occasionally, the estimator also may will be more or less than the risk-weighted estimate. If
wish to determine the impact of higher or lower price the number ofpools for which estimates ofreserves are
forecasts on estimates of reserves as compared to the being prepared is sufficiently large, then the sum of the
most reasonable forecast. These cases (current, higher expected reserves should be the evaluator's best judge-
or lower prices) should not be reported as the most rea- ment as to the total quantity that will be recovered from
sonable reserves estimates, but should be identified as all the pools. According to the ranges specified in these
sensitivity cases with the assumptions clearly stated. definitions, the risk-weighting should result in an aver-
They illustrate the impact of different specified age risk-weighting of 60 percent for probable reserves
economic conditions on estimates of reserves. (the mid-point ofthe 80 to 40 percent probability range)
and 25 percent for possible reserves (the mid-point of
2.7 REPORTING OF RESERVES the 40 to 10 percent probability range).
ESTIMATES When the value of the risk-weighted reserves is being
2.7.1 Risk-Weighting of Reserves determined, the unrisked reserves must be used in the
Estimates economic analysis. Risk for both the reserves and val-
ues should only be applied after the economic forecasts
Remaining proved reserves, as defined in Section 2.3.1,
have been completed using total costs to develop the
are those reserves for which there is an 80 percent or
unrisked reserves.
greater probability that at least the estimated quantity
will be recovered. In instances where additional reserves 2.7.2 Aggregation of Reserves
are estimated in the probable and possible categories, Estimates
both the estimated quantity and the adjusted (risk-
Traditionally, when deterministic approaches are being
weighted) portion should be reported, particularly when used, the aggregation of a series of reserves estimates
the estimates are being aggregated. will have been made using the arithmetic method. How-
Proper statistical procedures may be used to derive the ever, with the increase in the use of statistical methods
expected or risk-weighted reserves from the data. In the in reserves determination, the arithmetic method of
deterministic procedure, the best estimate of each aggregation may not always be appropriate. Although
parameter is used in the calculation of reserves. The
probabilistic procedure quantifies the uncertainty in the
resource estimate by using the evaluator's opinion to
Theseprocedures are described in more detailin
describe the range of values that could possibly occur
Section 4.3.

8
DEFINITIONS

use of a statistical method of aggregation may be better is generally done by converting reserves that are not oil
for reserves estimates, the method of aggregation may to barrels of oil equivalent (BOE). The conversion can
be dictated by regulators, auditors or management. Thus, be made using either an energy equivalence or a rela-
when aggregating a series of reserves estimates, the tive value procedure, depending upon the purpose of
evaluator should state whether the method of aggrega- the conversion.
tion is arithmetic or statistical. If a statistical method is The energy equivalence is only relevant at the burner
used, the evaluator should state how it is done. tip and, since the value in the marketplace is different
If the proved reserves, which represent an 80 percent for various types of reserves and the costs to move the
confidence level, are summed arithmetically, the total various types from wellhead to the end-user vary con-
reserves will represent a confidence level that is much siderably, the value of the reserves at the wellhead (or
higher than would be achieved if the proved reserves in the ground) is only somewhat indirectly related to
were totalled using a probabilistic approach of all the energy content. Consequently, for making value-based
entities and an 80 percent confidence level. Conversely, . comparisons, the conversion should be based on the rela-
the proved plus probable reserves and the proved plus tive values of the gas and related substances compared
probable plus possible reserves will be overstated when to the values of oil reserves at the field level. The con-
summed arithmetically using a deterministic as com- versions to BOE are usually made to barrels of "light"
pared to a probabilistic procedure. oil equivalent. Since medium and heavy oil have values
On the other hand, the sum of the expected reserves, as much lower than light oil, it may be desirable that the
defined in the preceding sections, should be the same as medium and heavy oil reserves be converted to BOE
the deterministic (using arithmetic methods) and the of light oil as well as converting the gas and related
probabilistic procedures. This relationship is extremely product reserves, to better indicate their real value.
important in summing reserves, and therefore it is rec- Some companies may prefer to convert their reserves
ommended that risk-weighted reserves be used in the using gas as the common unit. The procedure would be
aggregation of reserves. In any event, the evaluator similar, except that the converted reserves would be
should state whether the method of aggregation is quoted as thousand cubic feet of gas equivalent.
arithmetic or probabilistic. It is important, when reserves are reported in BOE
or gas equivalent, that the method used and the respec-
2.7.3 Barrels of Oil Equivalent
tive conversion rates be disclosed. A more detailed
From time to time, it may be desirable to report reserves description ofthe procedure is presented in Chapter 26,
ofoil, gas and related substances in common units. This Uses ofReserves Evaluations.

9
Chapter 3

GUIDELINES FOR ESTIMATION


OF OIL AND GAS RESERVES

3.1 INTRODUCTION The use of probabilities to assist in the categorization


The quantification and classification of estimates of ofreserves does not eliminate subjectivity from the pro-
reserves are, by nature, rather subjective processes. cess. It remains incumbent on the evaluator to ensure
Estimates of reserves are developed under conditions that the basis for the estimate of reserves and the cat-
of uncertainty, and their reliability and classification are egory to which the estimate is assigned are clearly
directly related to the quality of the data available, as reported. The guidelines and examples given are
well as to the competence and integrity of the individual intended to assist in this regard. The reserves classifica-
responsible for preparing the estimates. The purpose tions and associated probability ranges are applicable
of this chapter is to elaborate on the classification of to estimates of reserves derived using either determin-
estimates ofreserves derived using the two primary res- istic or probabilistic (stochastic) calculation procedures.
erves determination procedures: deterministic and
3.2 METHODS OF CALCULATING
probabilistic.
RESERVES
The categories of proved, probable, and possible have
for some time provided a basis for differentiating esti- 3.2.1 Deterministic Procedure
mates of reserves to reflect the probability of recovery The deterministic procedure is the most commonly used
considered appropriate by the estimator. Stated in an- method ofreserves estimation in Canada. Ifthe true val-
other way, the assignment ofthe estimate ofreserves to ues of all parameters used in any calculation were
the three categories has provided a qualitative measure known, a true or deterministic value could be calculated.
of the probability that a particular estimate of reserves However, due to the uncertainties in the geological,
will, in fact, be realized. However, for some time there engineering and economic data, for the purposes of re-
has been discussion as to whether a more rigorous app- serves estimation using the deterministic procedure, the
roach should be adopted to describe the degree of "best estimate" ofeach parameter is used in the calcula-
probability associated with the specific reserves catego- tion of reserves for each specific case. As a result, the
ries. Some observers view the use ofterms such as "high probability distribution of the input parameters is gen-
degree of certainty" to describe reserves classification erally not formally considered in the classification of
categories as too subjective, and believe a definitive sta- reserves calculated using this method.
tistical probability of recovery would give users more Estimates ofreserves calculated using the deterministic
confidence in utilizing- the estimates of reserves pro- procedure should be assigned to the proved, probable,
vided for each of the categories. For this reason, and possible categories based on the probabilities in-
consideration has been given to a means to further quan- herent in the estimates. The assignment ofthe estimates
tify the degree of probability associated with each of of reserves to the respective classification categories
the categories. should be consistent with the prescribed ranges ofprob-
The probability ranges adopted by the Standing ability, taking into account factors such as the stage in
Committee on Reserves Definitions for the definitions the producing life ofthe reservoir, the amount and qual-
ofproved, probable, and possible reserves are intended ity of geological and engineering data available, the
to more explicitly quantify the probability of recovery availability of suitable analogous reservoirs and,
associated with each of the reserves categories, both on perhaps most importantly, the evaluator'sjudgement as
an absolute and on a relative basis. The ranges provide to the uncertainty inherent in the estimate.
an assessment that is more quantitative in nature than
some prior definitions.

10
GUIDELINES FOR ESTIMATIONOF OIL AND GAS RESERVES

The assignment of reserves estimates to the respective This method uses the statistical analysis of data.
categories using the deterministic procedure normally Relative frequency curves established for each variable
uses one of two approaches. describe the range of possible values for each, as well
In the first, the evaluator develops a "best estimate" of as the probabilities that these values will occur. After
reserves for each of the categories, using consistent frequency distribution curves have been established for
parameters. Using this methodology, the evaluator each variable to be used in a reserves classification, the
effectively establishes a range of estimates of reserves, Monte Carlo (described in Section 22.4.4) or a similar
with the proved estimate based on parameters for which method is used to estimate a value for reserves. A single
a high probability can be attributed, and additional sample of each variable is taken randomly from each
estimates of probable and possible reserves based on probability distribution and used to calculate a single
parameters for which there is a lesser probability of oc- value of the dependent variable. This procedure is
currence. The effect of this is to progressively increase repeated a large number of times to ultimately create a
the estimated quantity as it is moved from the proved to frequency distribution curve that describes the range of
probable to possible categories, with the overall range estimates of reserves and the probabilities of achieving
of estimates dependent upon the uncertainty inherent in particular estimates.
the specific parameters upon which the estimates are Once the measures of central tendency (the mean
based. or arithmetic average, the mode or "most likely" value,
In the second approach, a single estimate of reserves is and the median or "middle" value) and the dispersion
derived for the pool and then allocated to the respective (range, standard deviation, and percentiles), have been
reserve categories based on an assessment of the por- determined using this technique, estimates of reserves
tions of the estimate that would satisfy the probability may be assigned to each of the proved, probable, and
ranges for each of the reserves categories. In making possible categories.
this determination, the evaluator must make a subjec- The assignment of the estimates of reserves to the
tivejudgement as to the uncertainty inherent in the single respective categories should be consistent with the
estimate and, therefore, the extent to which it can be probabilities outlined in the reserves definitions, proved
allocated to the proved rather than the probable or reserves being those with an 80 percent or greater prob-
possible category. ability, and probable and possible reserves having lower
As already noted, where probable or possible reserves probabilities. The relative cumulative frequency distri-
have been estimated in addition to proved reserves, they bution curves may be used as the basis for the assignment
should be adjusted (risk-weighted) and added to the of estimated quantities to the reserves categories. Again,
proved reserves to result in the expected reserves. the evaluator must clearly describe the supporting
rationale for the categorization ofestimates ofreserves.
In summary, using the deterministic procedure, estimates
of reserves are calculated and assigned to the proved, Like the estimates derived using the deterministic
probable, and possible categories using primarily sub- procedure, the probable and possible reserves should
jective criteria, the overall basis being that the assigned be adjusted (risk-weighted). Since the probabilities have
quantities satisfy the probabilities established for each been established through the probabilistic process, they
of the categories. It is incumbent on the evaluators to should be used to adjust the respective estimates.
provide the supporting rationale for the categorization It should be noted that the probability associated with
of the reserves estimates. the estimate of reserves for a pool should increase as
the pool is developed and produced over a period of
3.2.2 Probabilistic Procedure time. As the overall probability of recovery increases,
The probabilistic or stochastic procedure is less the estimate of the proportion of reserves considered to
commonly used in Canada. It is more suitable for be proved is likely to increase, with a diminishing pro-
circumstances where the uncertainty is high, such as for portion in the probable and possible categories. The
reservoirs in the early stages of development, frontier objective of the evaluator should be to minimize the
areas, or areas where new technology is being applied. extent to which it is necessary to reduce estimates of
As the level of uncertainty increases, it is generally proved reserves over the life of a pool for reasons other
agreed that the probabilistic procedure becomes more than production, although there may be circumstances
relevant and the deterministic less reliable. Rapidly (i.e., a significant price decline) where such reductions
expanding computer applications also facilitate the use are necessary.
of the probabilistic procedure.

11

,
DETERMINATION OFOIL AND GAS RESERVES

3.3 GUIDELINES FOR SPECIFIC Single-Well Pools


METHODS For single-well pools, the area must be consistent
The guidelines and examples that follow are designed with the reserves category, recognizing the geological
to provide guidance for evaluators on the calculation of and engineering information with respect to the single
proved, probable and possible reserves, using the wellbore and the geological and other information
following methods for determining reserves: available for single-well pools in similar formations.
Volumetric In the case of an isolated gas well with little or no
Material balance geological control, it is a frequent practice to assign re-
Decline curve analysis serves to one section,* a frequently used regulatory
spacing for gas wells. However, one section should only
Reservoir simulation
be .assigned as proved reserves if a review of similar
This section also deals with the calculation of reserves wells in the same or a similar formation has satisfied
of natural gas liquids (NGLs) and sulphur. the evaluator that such an area can be assigned 'with
It must be emphasized that the guidelines touch on some a probability of 80 percent or more. If the review of
key factors related to reserves estimation, but are not similar wells shows that a smaller area, such as one half-
all-inclusive. In the final analysis, the calculation and section or even one eighth-section, can be expected to
categorization of reserves depend upon the judgement have a high degree of probability, this reduced area
ofthe evaluator as to the probability of recovery of the should be used for proved reserves. On the other hand,
reserves of oil and gas. in situations such as a blanker sandstone, the review of
It is intended that the guidelines will lead to more similar wells may justify the assignment of more than
uniform practices of reserves calculation in each cat- one section if it can be demonstrated with high prob-
egory, and thus to reserves estimates that will be more ability that the well will drain reserves associated with
comparable and consistent throughout the industry, the the larger area.
financial community, and the government agencies that In the event that an evaluator is reasonably confident
use them. that gas would be recovered from an area, say one sec-
tion, but not with a high enough probability for the
3.3.1 Volumetric Method reserves to totally qualify as proved, then some lesser
The volumetric method is the most commonly used area for which there is a high probability, say one half-
approach to estimating reserves in the early stages of section, should be assigned as the proved area. The
production from an oil or gas field. As more data remaining half-section ofthe normal spacing unit might
become available, the estimate may be refined, some- then be assigned to the probable or possible category,
times through the use of other reserves estimation depending on the degree ofprobability that such reserves
methods. Often the volumetric estimates are useful for would be recovered.
comparison with other methods. For single oil wells, the area assigned would generally
The volumetric method is used by employing the be less than for gas wells because the flow characteris-
standard reserves equation with the appropriate choice tics for oil result in smaller drainage areas. A typical
of parameters. For various parameters in the equation, practice is to assign proved reserves to areas ranging
the guidelines provide suggestions for choosing the ap- from one quarter-section for light crude oils to one
propriate value, according to the category of reserves sixteenth-section or less for heavy crude oils.
being calculated. Such assignments should be made only when a review
Pool Area of similar wells demonstrates that such reserves can be
expected with a probability of 80 percent or more. The
The parameter that often has the greatest variability process used to assign areas to single oil wells should
in the reserves equation is the area chosen to represent otherwise be similar to that for gas wells, with an as-
the areal extent of the pool. Thus, the choice of the signment that reflects the probability that the area
value for the area plays a particularly important role in can be drained at the level required for each reserves
computing reserves in each category. classification.

*One section = 259 hectares, 640 acres,or 1 square mile.

12
GUIDELINES FOR ESTIMATION OF OIL AND GAS RESERVES

In certain cases such as sheet sandstones, even though depending on information on pressure, drillstem test
only one well has penetrated gas or oil, information may results, and seismic data.
be available, as a result of knowledge about nearby
abandonments and the regional geology, that justifies Multi-Well Pools
the preparation of an isopach map. This situation is In multi-well pools, the area between wells should
illustrated for an oil pool in Figure 3.3-1, which shows be considered to contain proved reserves if the areas
the zero pay limit. If the probability of a one quarter- assigned on a single-well basis overlap or are separated
section pool is very high, based on a study of similar by a very small area, or if material balance calculations
pools in the area, then the one quarter-section contain- or production data and pressure response clearly dem-
ing the well could be assigned as proved reserves. The onstrate that the wells are in the same pool. There will,
remaining three quarter-section parcels offsetting the however, be many situations where such conclusive in-
well, and within the zero limits ofthe isopach map, could formation is not available and the evaluators must use
also be assigned reserves as additional proved or prob- their judgement, based on geological and other data,
able or possible depending on the degree of probability regarding the areal extent and the assignment of
that the oil will be recovered. These reserves, however, additional reserves to adjacent areas.
should be in the undeveloped category. For wells that are in separate pools, the preceding
The assigrunent of reserves for single gas wells with methodology for assigning reserves for single-wellpools
considerable geological control can be handled in a should be followed. If more than one well can be in-
manner similar to that detailed for the oil well in Figure cluded in a pool, the type of procedure described in the
3.3-1, except that the estimated drainage area for gas following example might be used.
will usually be larger, depending on the available
geological and other data. An area larger than the Example
assigned area determined as described may be used Figure 3.3-2 shows the zero pay limits for a multi-well
conventional gas pool. It is important to emphasize that

-<>- L-- ",-<>-


WELL LEGEND
I 0 0
\ o Location
------------ -~---~-~-~--
-<>- Abandoned

*
011
0

\ -, ) Gas

-<>-
t-...
-- [7
1 mi
1 km

Figure 3.3-1 Single Well Oil Pool with Good Geological Control

13

z
DETERMINATION OF OIL AND GASRESERVES

RANGE

36 31

1/
V -. \
36

~
0-
~
/ J:
en
z
s:0
/ I f- WELL LEGEND
~
/ 0 Location

1 6
/ 1 -<r Abandoned

36 31 1/ 36

~
Oil
Gas
\

-?- 1\ ~
~
L-4
D
<,
One Section

Figure 3.3-2 Conventional Gas Pool, Zero Limit of Net Pay Map

this example illustrates a procedure that is useful for the proved limits as an indication of the proved plus
conventional oil and gas pools. The areas assigned probable limits (Figure 3.3-5). As with the proved
relate to the particular natural gas reservoir and would reserves, any corridor less than one mile between the
differ in other geological settings. proved plus probable limits would also be assigned to
Knowledge respecting the geological formation is such the probable category (Figure 3.3-5). The procedure
that the evaluator is prepared to make a proved area would be continued for possible reserves ifany area were
assignment offour sections for a single well. The map left within the zero pay limits.
is constructed using all pertinent data, such as the net For oil, a similar approach for assigning areas in multi-
pays encountered in the three gas wells, and informa- well pools can be used, but the area assignments would
tion on dry holes that indicates the limits of the pool. usually be smaller.
Perhaps seismic information and pressure data, along
with experience in the area, suggest that the two wells
Presence of Hydrocarbons
in the west are in communication with the one in the In order to estimate any reserves, the presence of
northeast hydrocarbons must have been confirmed by pro-
The first step is to block in a 2 by 2 section area around duction data or by a demonstrated ability to flow based
the productive well and within the zero net pay isopach on the results of drillstem tests. If production and test
limit, as shown in Figure 3.3-3. These areas would be data are not available, reserves may be estimated based
assigned proved reserves. Proved reserves would also on information from cores, or provided that the reser-
be assigned to corridors of one mile or less in width voir is analogous (from the standpoint ofgeological and
between the proved areas around each well and any petrophysical characteristics) to producing or tested res-
intervening corridors between the proved areas (Figure ervoirs in the same area. Reserves should be assigned
3.3-4). After limits had been established for the proved only to reservoirs that have been penetrated by a
reserves, a border one mile wide would be drawn around wellbore; otherwise, quantities should be categorized as
a resource.

14
GUIDELINES FOR ESTIMATION OFOILAND GASRESERVES

RANGE

36 31
V- r-. 36

/' \
7 // /
0-

/
/ V~~
v //- V/
J:
en
Z
:s:0
WELL LEGEND

/ / 'r>. / l- 0 Location

I ~~V / -?- Abandoned

.v / / 'V 6
V
1

~
Oil

/ Gas

\ '/ / / /6 31 V 36
IZZ2I Proved

~ \ ~/ ~ V ~
Vvv
/
----- D One Section

Figure 3,3-3 Conventional Gas Pool, Zero Limit of Net Pay Map with Individual Well Assignments

RANGE

36 31
V- r-, 36

;7V
\
// /
0-

/ :/~ ~ J:
en
Z WELL LEGEND
/ / V/- / / :s:
/ '/ //V V ~ 0 Location

~/ ~ ~/ / -?- Abandoned

~/ //V r/ 1

~
011

/. / / /
6
/ Gas

\
/ // /
V //V V
6 31 V 36
IZZ2I Proved

\~ ~
/ ~ 'V
~
~
'< VV /
-- D One Section

Figure 3,3-4 Conventional Gas Pool, Zero Limit of Net Pay Map with Area of Proved Reserves

15

?
DETERMINAnON OF OIL ANDGASRESERVES

RANGE

36

a.
:c
en WELL LEGEND
z
s:0
t- 0 Location

-<?- Abandoned

Oil

*
Gas

36
IZZa Proved

Probable

D One Section

Figure 3.3-5 Conventional Gas Pool, Zero Limit of Net Pay Map
with Area of Proved Plus Probable Reserves

Reservoir Parameters Averaging these parameters over multi-well pools is also


Values ofpay thickness, porosity, and fluid saturations, important in estimating and categorizing reserves. If
when combined with area, permit a calculation of the reliable estimates for many wellbores exist for any or
volume of oil or gas contained in a reservoir. These all of the parameters, they should be applied over the
parameters are estimated from analyses of cores or intervening area between wells and the edge ofthe res-
petrophysical well logs. ervoir by contouring or other appropriate averaging
methods. The calculation of the average, particularly if
In many situations, core analysis is not available, and
it is by contouring, should have regard for the geology
well logs indicate the presence of oil or gas, but do not
and for any other factors that might influence the shape
allow reliable estimates ofporosity or fluid saturations.
of the reservoir.
Where the geological formation is known to be produc-
tive in the region, a pay thickness based on the logs for Where insufficient individual well data respecting any
the well and the values ofporosity and fluid saturations of these parameters are available to allow for contour-
taken from nearby wells in similar formations (values ing, averaging should be done in a manner consistent
that may be expected to have a high probability), may with the probability necessary to support the particular
be used to calculate proved reserves. In such cases, where category of reserves being estimated.
these parameters can only be estimated with a lower Certain other reservoir parameters are needed to
probability ofoccurrence, probable or possible reserves estimate reserves, particularly for purposes of convert-
might be calculated. ing the volumes of oil or gas contained in a reservoir
In the estimation of reserves, the values used for to volumes that will be recovered and marketed. These
pay thickness, porosity and fluid saturations must include reservoir pressure and temperature and
always be consistent. This requires proper use ofcutoff hydrocarbon fluid composition. The choice of such
values, well log calibration, and proper petrophysical parameters does not usually dictate the categorizing
calculation methods. ofreserves estimates as proved, probable, or possible.

16
GUIDELINES FOR ESTIMATION OF OIL AND GAS RESERVES

However, particularly for proved reserves, the are available. When economic producibility limits
parameters must be based on reliable data or be are coupled with the material balance, reserves are
determined through valid comparison to similar reser- determined. In its simplest form, the material balance
voirs in a manner that reflects the appropriate level of equation may be written as
probability.
initial volume = volume remaining + volume
Recovery Factor removed

Estimates of recovery factor are based on analysis of Since oil, gas and water are present in petroleum
production data from the pool in question, by analogy reservoirs, the material balance equation may be writ-
with producing pools in an analogous reservoir unit, or ten for the total fluids or for anyone ofthe fluids present.
by engineering analysis, without analogy or production For gas reservoirs, the frequently used plot ofreservoir
data. The estimator should keep in mind that recovery pressure, adjusted for the gas compressibility (P/Z), vs.
factors may be influenced by other factors, such as cumulative production is a material balance method.
well spacing, the anticipated compression, the drive Four groups of data are required for a material balance:
mechanism, and reservoir and fluid properties. Fluid production
For proved reserves, the recovery factor may be deter- Reservoir pressure and temperature
mined from a detailed reservoir study, or by comparison Fluid analysis
with detailed studies of analogous reservoirs where the
Core analysis and petrophysical logs
recovery factor can be estimated with a high degree of
probability. In addition to these data, it is highly desirable to know
the type of reservoir mechanism that is operative in
For probable and possible reserves, the value used for
order to expedite estimation ofthe volume of the initial
the recovery factor may be similar to that used for the
hydrocarbons in the reservoir. As with other methods,
calculation ofproved reserves, the different categoriza-
the better the quality of the data, the higher the degree
tion ofreserves being accounted for in other parameters.
of confidence in the results.
However, a larger recovery factor may be justified on
The evaluator, in categorizing reserves, must consider
the basis ofgeological data that indicates improved res-
the probability that the reserves in question will be re-
ervoir parameters such as porosity and permeability in
covered. The volume in place estimated by the material
certain portions of the field. Where a range of recovery
balance method might have a high enough probability
factors is known from analogous reservoirs with simi-
to be considered as proved in the following situations:
lar characteristics, values corresponding to the middle
to upper end of the range may be used for probable and - Where significant data are available, particularly
possible reserves estimates. fluid production and reservoir pressure data, and the
reservoir drive is known
In some cases the recovery factor for proved reserves
has been estimated on the basis of an 80 percent or - Where production and reservoir data are limited,
greater probability, and yet the characteristics of the but the reservoir is analogous to reservoirs in the
formation indicate that better recovery might occur. In immediate vicinity and same geologic horizon
other cases the recovery factor for proved reserves has - Where such data are of sufficient quantity and
been estimated lower due to an anticipated recovery quality to have established the reservoir drive
problem (i.e., water influx in a gas reservoir), but there mechanism
is only a chance that the problem will occur. In these - Where production and reservoir data are limited, but
situations the evaluator might use a higher recovery the estimate is supported by a calculation of the
factor and assign the incremental reserves to the prob- hydrocarbons in place by the volumetric method
able or possible categories, depending upon the degree For gas reservoirs, where there is a strong linear
of probability of their recovery. relationship between P/Z and cumulative production
3.3.2 Material Balance Method (Figure 3.3-6), the probability ofrecovery is likely high
enough to assign the quantity indicated as proved
The material balance method is employed to estimate
reserves. However, no additional reserves should be ass-
the volume ofhydrocarbons in place in a reservoir when
igned beyond the proved reserves, since no significantly
appropriate geologic, production and laboratory data
different interpretation ofthe data would be reasonable.

17

h _
DETERMINATION OFOILANDGASRESERVES

Average
Oat. Pressure Z PIZ Cum. Prod. I: :
30000 (kPa) (kPa) (10 8m')
ii~
72102 21540 0.875 24621 0.0 I:i

r-."
86107 20078 0.871 23063 96.0
87/08 18705 0.869 21532 209.0 I::
86107
89/02
14623
13258
0.874
0.879
16740
15086
582.0
724.0
IiiIX
20000
<, 10742 0.894 12018 920.0
f~
89/09

~
90/0B 7357 0.922 79n 1 210.0
PIZ

r-,
i."i i'i.
(kPa)

10000
<,

o
1-----1----- I- - - -E=r~.'!'~C-r~!. --r-. ~ --
-----
~
o 250 500 750 1 000 1 250 1 500 1750 2000
8 a
Cumulative Production (10m)
PROVED
8 ,
OGIP=1800x 10 m
6m3
ReserveS=1600xl0

Figure 3.3-6 Material Balance (Gas Reservoir)

There are a number of other situations where reserves data in terms of the type of pressure measurement
estimates from material balance or some portion of the (bottom-hole, drillstem test), and the type of recorder
estimate might have an associated probability level that (mechanical or electronic). With respect to Figure
results in their being considered probable or possible 3.3-8, the evaluator should develop an understanding
reserves: ofthe reservoir drive and depletion mechanism in order
- Where significant production data are available, but to accurately classify proved and probable or possible
the reservoir drive mechanism is uncertain or the reserves. The apparent bending of the material balance
magnitude of the reservoir drive is uncertain plot may be interpreted as gas migration from edge or
tight areas of the reservoir, or pressure support from an
- Where production and reservoir data are limited and
underlying aquifer. Use ofa reservoir simulation model
there are no analogous reservoirs in the immediate
might assist in this analysis.
vicinity
- Where production and reservoir data are limited 3.3.3 Decline Curve Analysis
and the estimate is not supported by volumetric The analysis of a production decline curve provides
determinations estimates of three important items of information:
For a gas reservoir, where the P/Z data do not give Remaining oil and gas reserves to be recovered
a definitive linear correlation, asin Figures 3.3-7 and Future expected production rate
3.3-8, the resulting reserves that should be classified as
Remaining productive life of the well or reservoir
proved are those that represent the quantity that can be
estimated to be recoverable with an 80 percent In addition, an explanation of any anomalies that
probability. Proved plus probable reserves might reflect appear on the graph is useful. The analysis is only valid
a larger volume than the data indicate may be recov- provided the well will not be altered (i.e., fractured or
ered. In Figure 3.3-7, the scatter of points should acidized) and the reservoir drainage is constant.
encourage the evaluator to analyze the quality of the

18
GUIDELINES FOR ESTIMATION OFOIL AND GASRESERVES

Average
40000 -,----,----,----.---rI Date Pressure Z P/Z Cum. Prod.
(kPa) (kPa) (10'm')
INIT. 30991 0.987 31391 0.0
76/06 31109 0.988 31479 13.4
a 81/06 21380 0.922 23182 72.7
84/09 20277 0.919 22075 103.4
86/09 16602 0.913 18179 122.9
86/09 19001 0.915 20762 122.9
87/05 18519 0.915 20237 128.6
P/z 89/07 18471 0.913 18036 144,8
(kPa)

10000 +----+---+----j----"'f.,;;:-=:O""d----l-----l
Economic Limit

o+---+---+----I----I-_ _~.L......:::>.I-..J--"'-I
o 50 100 150 200 250 300 350

Cumulative Production (10'm')


PROVED PROVED + PROBABLE
6m3 6m3
OGIP=300xl0 OGIP=350xl0
6m3 6m3
Reserves = 270 x 10 Reserves = 315 x 10

Figure 3.3-7 Material Balance (Scattered Datal

Average
Date Pressure Z PIZ Cum. Prod.
30000 (kPa) (kPa) (lo'm')
85/11 21067 0.924 22800 0.0
75/08 16858 0.899 18761 102.9
76/10 14844 0.902 16451 138.4
76/11 15306 0.901 16989 138.4
77/08 13631 0.906 15044 162.3
20000 78/09 12604 0.910 13852 190.5
.... 80/07 13411 0.920 14 SIT 237.1

~
PIZ
.... 86/05 8936 0.929 9618 340.6
87/08 8556 0.932 9184 358.4
(kPa)

10000
~ 88/06 8494 0.932
...
9115 368.2

'<,

- ~CEClOli9!~.!!-
~~
---- ----- -----
o
:"'-..l ::::---
o 100 200 300 400 500 600 700

Cumulative Production (10'm') PROVED


,,
OGIP=620xl0 m
PROVED + PROBABLE
OGIP=675xl0 m
6 ,

6m3 6m3
Reserves=550x 10 Reserves = 590 x 10

Figure 3.3-8 Material Balance (Reservoir Drive and Depletion Mechanism)

19
DETERMINATION OFOil AND GAS RESERVES

As with all other methods, the categorizing of reserves In a case where well-established trends are not evident,
by decline curve analysis is dependent upon the judge- proved reserves should be restricted to the minimum
ment ofthe estimator. Important considerations include quantity that the evaluator believes will be recovered
the amount and quality of data, the variability of the with an 80 percent probability. Figure 3.3-10 shows
profile, and an understanding of past and future such an example. Proved reserves are estimated by
production policy and the depletion mechanism. projecting the steepest portion ofthe production decline
Because ofthe empirical extrapolation, a decline curve data. In this case, the incremental volume of oil that
can usually have a wide range of interpretations. The may be recovered if the lower rate of production
range depends upon the production history of the prop- decline prevails might be classified by the evaluator as
erty. For example, if there is limited prior production probable or possible.
history, a wider range of interpretations is possible than This situation could also apply when the type ofdecline
for a well or property in the stripper stage of produc- pattern is not obvious. Figure 3.3-11 illustrates a case
tion. It is valuable to understand the production recovery where either an exponential or a harmonic decline could
. mechanism of the formation (or the same formations in be used to extrapolate the data. In this example, reserves
the area) and the various characteristics of the well (net determined from the exponential curve might be
pay, permeability, and zone of completion). Also, each assigned to the proved category, since there is a high
specific interpretation is a function of the experience, probability that at least this volume will be recovered.
integrity and objectivity of the individual doing the The harmonic curve reserves might be classified as prob-
evaluation. able or possible, depending on the probability of
Determining reserves from historical graphs of recovery, as judged by the evaluator. In this example
production data that exhibit strong consistent decline there is a large difference between the estimates using
characteristics should be straightforward. When a high the different interpretations, and this suggests consider-
degree of probability exists, as in Figure 3.3-9, proved able uncertainty. Thus portions ofthe quantity in excess
reserves only would be assigned. of the proved reserves could be classified as probable
and possible.

20

PROVEO
3m3
~
Reserves = 33 x 10
15
....."
~

-..
~
E

co
n.
II:
c
0 10
.LA .
'Y~
;:
U
::J

~v\
."
2
e,
(5 5
''\.."

~
f----------- _ E'<.O!!~,,!!"-Ll"!!!.. _ ----------- ~----
o
o 10 20 30 40
3
Cumulative Oil Production (10 m3)

Figure 3.3-9 Decline Curve, Proved Reserves

20
GUIDELINES FOR ESTIMATION OFOILANDGAS RESERVES

20

PROVED
6m:3
Reserves = 155 x 10
15 - I t - - - - , - - - - - + - I - - - - - - H

--
M PROVED + PROBABLE + POSSIBLE
Q
6m3
Reserves = 176 x 10

*
II:
c
o
:s
::J
10

'D
e
Q.
5-++----+-1-----
i5

Economic Limit
o+--------+------\--------f-l-"'"---..L.::::>...-J
o 50 100 150 200
3
Cumulative Oil Production (10 m )

Figure 3.3-10 Decline Curve, Cumulative Gas Production

16

PROVED
3m3
Reserves = 17 x 10
~
12
M
:E PROVED + PROBABLE + POSSIBLE
. Reserves = 25 x 10
3m3

Q)
~

'c"
II:

.,
0 8

~
U
::J
'D
1\
0
~
Q.
-,
i5 4
.~ .. """- ~Harmonic

Exponential/f~
o
ECOnOm!C Limit
t
.T ~ -
o 5 10 15 20 25 30
3
Cumulative Oil Production (10 m3)

Figure 3.3-11 Decline Curve, Cumulative Oil Production

21
DETERMINATION OF OIL AND GASRESERVES

3.3.4 Reservoir Simulation Method judgement of the evaluator and on information such as
A reservoir simulator is a tool that is used to simulate observed performance, the results of pilot projects, the
the processes that take place in producing a reservoir. performance of projects in analogous pools, and engi-
Simulation is often done to optimize recovery by an- neering studies. To illustrate, reserves attributable to
alyzing various reservoir development plans, methods improved recovery projects may be considered as proved
of production, and the complexity of the reservoir reserves provided certain conditions are met. Such situ-
itself. Although reservoir simulation methods are com- ations occur when the production response from a project
plex, they include a combination of the physical corresponds to the results predicted by engineering
principles and analytical techniques of one or more of analysis or where the improved recovery project has
the other methods of reserves estimation. been in operation for a considerable period and the analy-
sis of a decline curve can be used with confidence, or
The criteria for categorizing reserves would include the
where a history-matched simulation is available. If the
amount and quality ofproduction and pressure data, the
production response has fallen short of original predic-
validity of the model and its demonstrated reliability
tions, the observed production data should be used for
with comparable reserves, and the ability to history
calculating and categorizing reserves. Proved reserves
match. To illustrate, if sufficient amounts of good geo-
may be attributed to other areas of the pool where an
logical and performance data are available to allow for
improved recovery project has not yet been applied,
a reasonable history match, and if the estimator is using
provided that it is highly probable that a project will
an appropriate simulation model that has been used
proceed, and that the geological and other reservoir char-
successfully in reservoirs similar to the one being stud-
acteristics are equivalent or superior to those for areas
ied, projections ofrecovery under primary mechanisms
where an improved recovery project is in operation.
and the specified economic conditions might be con-
sidered proved reserves. Ifthe situation being modelled If a successful scheme has been implemented in a
is an improved recovery mechanism, these criteria and similar pool that has analogous reservoir characteris-
the guidelines given in Section 3.3.5 for categorizing tics, proved reserves due to improved recovery may be
improved recovery reserves generally apply. This means assigned, provided the evaluator is convinced that the
that for existing and operating improved recovery analogy is sound and that there is a high probability that
projects where an appropriate simulation model is be- a project will proceed and be successful.
ing used, adequate data exist, and the response to the Probable or possible reserves can be assigned in other
data is consistent with the simulation results; or where cases where the improved recovery method has been
future projects can be expected with a high probability applied successfully to analogous reservoirs, but where
in reservoirs ofthe type where the model has been shown there is a lower probability that a project will go ahead
to give reliable results, the simulated recovery can be and be successful. Proved, probable or possible reserves
considered as proved reserves. may be attributable to a planned workover treatment,
At least a portion of the simulated recovery should be improvement to equipment, or other procedures, de-
categorized as probable or possible or not considered pending on the evaluator's judgement respecting the
as reserves, depending on the evaluator's views on probability of success.
the probability that the additional oil or gas will be 3.3.6 Related Products
recovered in the following situations:
Natural gas liquids (NGLs) are the liquid hydrocarbon
- Where the model has not been shown to give reliable components recovered from natural gas. If they are re-
results for the same type ofimproved recovery project coverable, they must be calculated and reported as
in a similar reservoir reserves of either natural gas or natural gas liquids,
Where insufficient data are available to properly but not both.
use the model The first test of recoverability ofNGLs is whether they
- Where the installation of an improved recovery will be produced as part of the stream of raw natural
project cannot be predicted with a high probability gas. If the fluid properties and reservoir pressures are
such that the composition ofthe produced raw gas stream
3.3.5 Reserves from Improved Recovery
will significantly change with time due to retrograde or
Projects
other phenomena, this must be reflected in the calcu-
The calculating and categorizing of reserves from lated reserves. Components of natural gas that wiil
improved recovery projects should be based on the

22
GUIDELINES FOR ESTIMATION OF OIL AND GAS RESERVES

liquefy in the reservoir and not be recoverable must not and therefore neither the natural gas nor the NGLs could
be included in reserves of either NGLs or natural gas. be categorized as remaining proved reserves.
If cycling or other special means of producing the Where the removal of NGLs from the raw gas is
reservoir is planned in order to reduce the liquid losses not required but is being planned, the removal of
that might otherwise occur, the NGLs that would be so the liquids must be economically feasible or else the
recovered can be categorized only as proved reserves NGLs cannot be categorized as proved reserves. If the
where their recovery can be estimated with a high prob- removal ofthe liquids is not economically feasible, they
ability. This would require sufficient reservoir and fluid would be included as part of remaining proved reserves
data to make an accurate detailed projection ofproduc- of natural gas.
tion and, also, the special means of production would If raw gas containing NGLs that will be marketable
have to be actually in operation or expected with a high natural gas after processing is categorized as either
degree of probability. probable or possible reserves, the NGLs must be
Where the prevention of losses in the reservoir is less categorized in the same manner.
certain, such NGLs should be categorized as probable With respect to sulphur reserves, essentially all of the
or possible or not considered a reserve, depending on hydrogen sulphide and other sulphur compounds must
the probability of their recovery. be removed from the raw natural gas and converted to
For most reservoirs, the composition of the produced elemental sulphur to meet environmental and other stan-
gas will not significantly change with time. For these dards. The necessary technology exists, and the key
reservoirs, the only test of recoverability of NGLs re- question is whether the recovery of the sulphur is eco-
lates to whether they will be recovered as liquids or nomically feasible at the specified economic conditions.
remain in the natural gas. This is also a second test for If it is not, the natural gas would not be economically
those reservoirs previously mentioned where the NGL recoverable as marketable gas and thus could not be
content of the produced gas will change with time. categorized as reserves.
The first criterion in terms of their classification as If the sulphur in question is economically recoverable
reserves is that NGLs can only be categorized as proved but is contained in natural gas categorized as probable
ifthe raw gas from which they are to be removed will, or possible reserves, the sulphur must be categorized
after processing, result in marketable gas that is cat- in the same manner.
egorized as remaining proved reserves. In some reservoirs, usually where the gas has a very
Some portions of some hydrocarbon components, high HzS content, the pressure, temperature and fluid
particularly ethane and propane, may not have to be re- properties are such that some ofthe sulphur will liquefy
moved from raw gas to make the gas marketable. Since or solidify in the reservoir and will not be producible
the technology for removal of essentially 100 percent without special production measures. Where such con-
of all NGLs is well-proven, the only test of their recov- ditions are known to exist or can be expected, the sulphur
erability from a proved natural gas reserve relates to that would liquefy and remain in the reservoir cannot
whether the liquids would be recoverable at the speci- be categorized as proved reserves unless special pro-
fied economic conditions under which the estimates of duction measures for dealing with the problem have been
proved reserves are being made. demonstrated to work successfully. They would have
Where the removal of NGLs from the raw gas is to be feasible at the specified economic conditions, and
necessary in order to make the gas marketable, the re- either have been implemented or have a high probabil-
moval of the liquids must be economically feasible or ity of being implemented. Where these criteria are not
the natural gas would not be economically recoverable met, at least a portion of the sulphur should be catego-
as marketable gas at the specified economic conditions, rized as probable or possible or not considered as a
reserve, depending on the overall probability of its
recovery.

23
r

PART TWO
DETERMINATION OF

IN-PLACE RESOURCES

n
!
_
- I
..
Chapter 4

OVERVIEW OF PART TWO

4.1 INTRODUCTION the depositional environment of the reservoir beds, the


history of any structural deformation of those beds, the
Part Two deals with the estimation of hydrocarbons in
trapping mechanism for hydrocarbon accumulation, and
place, the economically recoverable portions of which
the positions ofthe various fluid interfaces.
are classified as reserves.
Mapping the extent and configuration of the hydro-
The estimation of initial in-place resources involves
carbon accumulation requires the evaluator to have an
contributions from several disciplines, primarily geol-
understanding ofthe geological concepts of sedimenta-
ogy, geophysics, petrophysics, and engineering, but
tion and the structural attitudes ofthe reservoir rock that
contributions in varying degrees may also be required
control the limits and define the geometry of the de-
from specialists in chemistry, physics, economics, and
posit. Well samples and cores, well logs, seismic and
other geological-engineering disciplines.
well test data, and pressure information are all used to
It is important that the size, or at least the range in size, interpret the extent of the oil or gas pool. Visualization
of a potential resource be determined using consistent of the accumulation in three dimensions is necessary to
approaches and considering the interrelationships ofthe portray a realistic mapped interpretation.
parameters used to make the estimate. The size of the
resource forms the basis for the determination of how Rock and Fluid Properties
much oil, gas, and related products may ultimately be The properties of the reservoir rock and the particular
produced for society's use, and for the formulation of hydrocarbon are also important factors in the volumet-
operation plans and the necessary business decisions. ric estimate of the resource. Although the volumes of
Volumes ofthese discovered resources may be estimated hydrocarbons are calculated at subsurface depths, they
by either a volumetric or a material balance method of are converted to standard surface conditions oftemper-
calculation. These methods are described in Section 4.2. ature and pressure for measurement and recording.
Section 4.3 describes the deterministic and probabilis- The standard surface conditions in a particular loca-
tic procedures for estimating in-place resources. Sections tion become the "base" temperature and pressure.
4.4 through 4.7 briefly discuss sources and reliability The following properties are. important in volumetric
of data, the interrelationship ofparameters, the ways in procedures:
which resource estimates are used, and the background
1. Porosity, $, which is the measure of the void space
and experience of evaluators.
(fraction of rock volume)
4.2 RESOURCE ESTIMATES 2. Permeability, k, which is the measure of the fluid
transmissivity in millidarcies (mD)
4.2.1 Volumetric Estimates
3. Fluid saturation, Sw'which is the portion ofthe pore
Reservoir Volume space that is occupied by oil, So, gas, Sg, and inter-
The first step in a volumetric calculation ofhydrocarbon stitial water (fraction)
resources is an estimation of the volume of subsurface 4. Capillary pressure, Pc' which is the force per unit
rock that contains oil and gas. The volume is derived area resulting from the interaction ofthe fluids with
from the thickness of the reservoir rock containing the the medium in which they exist in kilopascals (kPa)
hydrocarbons and the areal extent of the accumulation. or pounds per square inch (psia)
The important geological considerations in establish- 5. Electrical conductivity of fluid-saturated rocks
ing a realistic estimate of reservoir volume include

27

b
DETERMINATION OFOIL AND GAS RESERVES

6. Formation volume factor, Bo, which is used to Oil


convert subsurface volumes of oil to surface con-
The calculation of oil in place is based on the following
ditions (the conversion is a consideration ofa phase
equation:
change resulting in the liberation of gas (solution
gas) from the oil and the compressibility of
I
reservoir oil) N=VRx<p x -x(I-So) (I)
7. Gas compressibility factor, Z, which adjusts for the
Bo
compressibility characteristics in mixes of natural where N = oil in place (ml)
gas in the conversion of ideal gas volumes to actual VR = rock volume (m') = 104 x A x h
volumes A = drainage area in hectaries (ha)
(I ha = 104 m2)
Cutoff Values
h = average net pay thickness (m)
Reservoir rock and fluid properties are used to help <p = porosity (fraction of rock volume)
determine the thickness of the reservoir rock that con- Bo = formation volume factor
tributes oil or gas production based on testing or actual (res. m 3/stm3)
production. Relationships between porosity, horizontal Sw = water saturation (fraction)
permeability, and water saturation can be developed
In Imperial units, the equation is as follows:
from core and capillary pressure data to determine
cutoff values below which any known economic re-
covery method will be ineffective, based on present I
N=VRx7758x<px -x(I-So) (2)
technology. Bo
The limiting factor in oil and gas production is the where N= oil in place (bbl)
permeability, a measure of the flow characteristics of (1 acre-foot = 7758 stb)
the reservoir fluids through the rock pores. The per- VR = rock volume (acre feet) = A x h
meability to each of the three fluids-oil, gas and A = drainage area (acres)
water-varies in relation to the content of each of the h = average net pay thickness (ft)
other fluids in the reservoir. The contribution to pro- <p porosity (fraction of rock volume)
duction is best measured by the relative permeability of Bo = formation volume factor
the rock-a flow characteristic of a fluid in the pres- (res. bbl/stb)
ence ofanother fluid or fluids. For example, the relative
Sw = water saturation (fraction)
permeability of the reservoir rock to oil or gas may be
almost nil in the presence of a high saturation of inter- Natural Gas
stitial water, which would render the hydrocarbons
The in-place volume of natural gas is adjusted for
immobile. The magnitude of the in-place resource has
temperature and pressure in order to measure volumes
this limitation from a thickness perspective, being lim-
at standard surface conditions. The compressibility fac-
ited to the reservoir rock from which it is possible to
tor adjusts for the compressibility characteristics for
recover the hydrocarbons.
different mixtures of natural gas components in chang-
Hydrocarbons in Place ing from reservoir to surface conditions to account for
the variance from the Ideal Gas Law.
The volumetric calculation of hydrocarbons in place
consists of the following steps: Natural gas resources may be classified as follows:
I. Determine the volume of rock containing hydro- Solution gas
carbons from thickness and area considerations or Associated gas (gas cap)
from an isopach map of net pay. Nonassociated gas
2. Determine the average effective porosity. Solution gas is the gas liberated from oil produced from
3. Determine the volume percentage containing a reservoir. The rate of production of solution gas de-
hydrocarbons (from fluid saturations). pends on the rate of oil production, the relative flow
4. Correct for the volume of hydrocarbons measured characteristics of the reservoir fluids, and the state of
at the surface. depletion of the reservoir.

28
r

OVERVIEW OFPART TWO

For calculation of initial solution gas in place, Gs ' the VR = rock volume (acre feet) = A x h
folIowing equation is used: A drainage area (acres)
(1 acre = 43,560 square feet)
G, = N XR,i (3) h = average net pay thickness (ft)
where G, = solution gas in place (m") ljl = porosity (fraction of pore volume)
N = oil in place (m') T so = standard base temperature (ORankine)
R,i = gas in solution at Pi (m3/m3) (460 + OF)
Pi = original reservoir pressure (kPa) Pso = standard base pressure (psia)
In Imperial units, the solution gas in place is as follows: T f = formation temperature (ORankine)
(460 + OF)
G, = NXR,i (4) Pi = original reservoir pressure (psia)
where G, = solution gas in place (scf) Zi = gas compressibility factor at Pi and T f
N = oil in place (stb) The base pressure used varies with the location of the
R,i = gas in solution at Pi (scf/stb) resource, but is related to the pressure ofone atmosphere
Pi = original reservoir pressure (psia) at some elevation above sea level (e.g., in Alberta, 14.65
psia and in British Columbia, 15.25 psia). The base
Associated gas is the gas associated with an oil
temperature is normally 15.6C (60F).
reservoir as a gas cap. Most, if not all, of the energy in
the gas cap is required for maximum oil recovery, so The determination of the compressibility of the gas
associated gas reserves usually remain shut in until most involves the use of a gas analysis to provide a factor for
of the oil reserves have been produced. a particular mix of natural gas.
Nonassociated gas is gas that is not associated with The equations set out in this section give in-place
an oil reservoir. Production is limited only by market volumes of raw gas expressed at standard surface
availability and contract terms. conditions. Before the gas is delivered to the point of
sale, there are losses at the surface due to processing
For the calculation ofnonassociated and gas cap in-place shrinkage, fuel consumption, and metering errors. These
volumes, the folIowing equation is used: losses must be deducted from the raw gas volumes to
arrive at the pipeline gas resources.
T P
G = VR x ljl x (l-Sw) x " x -'- (5) In sweet, dry gas fields, the shrinkage is related only to
P"xT, Z; fuel consumption and line losses. For wet or sour gases,
where G= raw gas in place (m') the shrinkage may also be a result of recoveries of re-
lated products and an allowance for plant fuel. The
VR = rock volume (rn') = 104 XA x h
shrinkage may be estimated from a representative gas
A drainage area (ha)
analysis to obtain the content of the related products,
(I ha = 104 m 2)
and an estimate of the recoveries of each product.
h average net pay thickness (m)
Actual shrinkage for a producing field may be obtained
ljl porosity (fraction of pore volume)
from the ratio ofthe saleable pipeline gas to the raw gas
Sw = water saturation delivered to the plant.
T sc = standard base temperature (OK)
(273 + 0c) Related Products
Psc = standard base pressure (kPa) Natural gas liquids may be calculated from the volume
T f = formation temperature (OK) percentage of the product based on a representative gas
(273 + 0c) analysis and the gas-in-place volume. The volumes in
Pi = original reservoir pressure (kPa) place ofnatural gas products expressed in standard vol-
Z, = gas compressibility factor at Pi and T f umes per volume of raw gas are shown in Table 4.2-1.
Sulphur, which may be calculated from the weight
In Imperial units, the equation is as follows: percentage, is also shown in Table 4.2-1.
T P The recovery factor assigned to the in-place volumes
G = VR x 43,560 x ljl x (l-Sw) x " x-'- (6) depends on the method and efficiency of recovery.
P"xT, Z;
Actual gas plant statistics are a source of recovery
where G = raw gas in place (scf) factors for related products from a producing gas field.

29
DETERMINATION OFOILANDGASRESERVES

Table 4.2-1 In-Place Volumes of Related Products uncertainty associated with any estimate of volumes of
hydrocarbons in place is handled differently in the two
Liquid Volume per Volume of Raw Gas
procedures used for the calculation: the deterministic
Vol % Product and the probabilistic.
Product multiplied by
The deterministic procedure is the one most commonly
SI' Imperial' used. The best estimate of each parameter is used in the
(m31l06m3 ) (bbVI06 cf) calculation ofreserves. The accuracy ofthe estimates is
Propane 36.88 6.54 only as good as the quality and source of measurement
n-Butane 42.22 7.48 of each parameter used in the calculation and will re-
i-Butane 43.80 7.77 flect the experience of the professionals in selecting the
n-Pentane 48.53 8.60 best estimate for the parameters. After recovery factors
i-Pentane 49.02 8.69 have been applied to the in-place estimates, the reserves
n-Hexane 55.10 9.77 are classified as "proved," "probable," and "possible"
n-Heptane 61.80 10.96 to reflect the degree of uncertainty, in the view of the
n-Octane 68.59 12.16 evaluator, associated with each category. Degree of
n-Nonane 75.42 13.38 uncertainty is discussed in detail in Part One.
n-Decane 82.26 14.59 The probabilistic procedure quantifies the uncertainty
in the resource estimate by using the evaluator's opin-
SUlphur Weight per Volume of Raw Gas
ion to describe the range of values that could possibly
Vol % SUlphur occur for each variable, and producing relative frequency
Product multiplied by curves to describe the probability of the values occur-
(tonnesIl06m3 ) (It/I0 6cf) ring within that range. A combined relative frequency
Sulphur 13.60 0.377 curve is then generated to describe the possible range
for the in-place resources and the associated probability
of occurrence of each of the volumes within that range.
4.2.2 Material Balance Estimates A variety of methods exist to generate the reserves
Calculation of in-place volumes of hydrocarbons by volumes, the most common being the Monte Carlo com-
material balance requires equating the incremental puter simulation, which uses a computer to iteratively
expansion ofthe reservoir fluids upon pressure drop to calculate enough in-place values from the variable pa-
the reservoir voidage caused by the withdrawal of rameter ranges to construct the in-place frequency
oil, gas and water, corrected for any fluid influx or distribution.
injection. The process requires an accurate history of
With rapidly expanding computer applications, the
reservoir performance, including volumes ofoil, gas and
probabilistic procedure is gaining popularity in portray-
water produced or injected, and pressure changes. Five
ing the uncertainties associated with a range ofestimates.
to ten percent ofthe oil or gas must have been produced
However, there are alternative procedures to generate
before a reasonably accurate calculation can be made.
the in-place resource frequency distribution. The alter-
4.3 PROCEDURES FOR ESTIMATING native presented in Chapter 6 is a "short-cut" that can
INPLACE RESOURCES be performed on a hand-held calculator. It must be
stressed that, as in the deterministic, the reliability of
The calculation of an in-place resource volume of
the results using any probabilistic procedure is depen-
hydrocarbons does not yield an exact answer. The
dent upon the quality of the data and the experience of
accuracy of each parameter used in the calculation
the evaluator in selecting the range of values for each
depends on the validity ofits source and the accuracy of
its measurement. When all the individual factors in an variable. If properly derived. the probabilistic estimates
estimate are combined, the degree of variance can lead of resources in place and recoverable reserves should
compare closely with the proved. probable, and possible
to substantial differences in the answers obtained. The
volumes obtained using the deterministic procedure.
In order to understand the uncertainty associated with
all reserves estimates, the evaluator must have a good
Standard conditions of pressureand temperature are appreciation of probability theory and statistical
101.325 kPa, 15.6Cfor 81; 14.65 psia, 60F for methods. This knowledge is critical when applying
Imperial units.

30
OVERVIEW OFPARTTWO

classifications such as proved, probable, and possible Recovery factor may be dealt with independently when
to the values of resources or reserves. Uncertainty in adequate values for parameters such as drainage area,
reserve estimates is covered in more detail in Chapters net pay thickness, and pore volume can be assessed.
3,6, and 22. When the information available allows only an estimate
of gross productive interval (gross pay), or when the
4.4 SOURCES AND RELIABILITY area assigned may represent spacing or total pool area
OF DATA rather than effective drainage area, the recovery factor
Reliability of data is covered in various sections commonly incorporates the allowance for portions of
of Chapter 5 in the discussions of the individual the reservoir that may not contribute to the production
parameters used in the calculation of in-place volumes, in a given well. Allowance for this undrained volume
and in detail in Section 5.11, Quality and Reliability of would probably be better accounted for by adjusting the
Data and Results. The source of data and the accuracy parameters of thickness and area.
of measurement are the two key elements in selecting Competitive operation is another consideration that may
parameters with some confidence. There can be several affect the recovery assigned to an individual well.
different sources of data from which a given parameter Hydrocarbons in the subsurface do not recognize bound-
can be selected. Evaluators are usually faced with some aries of area ownership. Where reservoir continuity
conflicting values from which they must select either allows the movement of hydrocarbons across owner-
their best estimate or a realistic range of values for each ship boundaries, factors such as the date that production
parameter. The experience ofthe evaluator in assessing commenced and the rate of production have a greater
the validity ofthe data derived from each source is criti- influence on recoveries from individual wells than the
cal in explaining the difference and establishing the best in-place resource underlying the individual company-
value to be used in the calculations. owned tract. In such circumstances, a share of pool
Table 4.4-1 summarizes the sources for each of the reserves based on past production and current produc-
variable parameters used directly in volumetric esti- tion rates provides an acceptable method ofestablishing
mates. The source ofeach factor is shown, with a priority recovery for individual wells.
of source given for derivation ofthe specific parameter. Extrapolation of well-established production decline
The priority is valid only if the testing methods and curves is the most accurate means ofcalculating reserves
measurements are considered to be adequate. Resource and establishing recovery factors to be used with
estimates are valid only with the available data and volumetric estimates ofin-place volumes. Decline curve
at the time they were prepared. Constant revision is estimates, which are dealt with in detail in Chapter 18,
necessary as other sources of data become available. may also lead to re-evaluation of other volumetric
4.5 INTERRELATIONSHIP OF parameters. Decline curve methods may be used only
PARAMETERS when there is sufficient production data to define the
rate of decline, and when the capacity of a well to pro-
The various parameters used in the volume calculation
duce is actually declining. At times, apparent decline in
are interrelated and, despite their sources, must be
production may be due to mechanical limitations.
compatible to one another. For example--as mentioned
Extrapolation of past performance into the future
in the discussion ofcutoff values-porosity, permeabil-
assumes that the forces acting in the reservoir in the past
ity, and water saturation are related through the geometry
will continue to act in the same fashion in the future.
of the pore spaces in the reservoir rock. Pressure and
temperature are both dependent upon the depth ofburial 4.6 USES OF RESOURCE ESTIMATES
ofthe reservoir rock. The parameters selected must make Resource-in-place estimates are the starting point for
sense when viewed together. volumetric estimates of reserves. Regular reserve
The subject of recovery of hydrocarbons is covered estimates provide most exploration and production
in Part Three, which discusses the derivation of the companies with a yardstick of their performance. When
recovery factor chosen to convert the in-place resources current inventory is compared to production rates,
to reserves. Since the selection of recovery factor may an indication of the life ofthe current resource is avail-
be affected by other reservoir parameters that are dis- able at any time. Companies also report their reserve
cussed in Part Two, a few comments are in order here. inventories to conservation authorities, securities
commissions, and shareholders.

31

m _
DETERMINATION OFOILANDGASRESERVES

Government agencies require reserve reporting to used for purposes such as land sale acquisitions, explor-
prepare resource inventories of the province or country atory drilling operations, development prospects,
for the purpose of determining requirements for pipe- participation in third-party ventures, and implementa-
line construction and establishing a rationale for tion of enhanced recovery schemes.
approving spacing changes, setting allowables, and Uses ofestimates ofin-place resources and reserves and
approving secondary recovery schemes. evaluations based on these estimates are many and var-
Evaluations of reserves of oil and gas are used for ied; the amount ofdetail required is dependent upon the
acquisition and disposition of these assets, borrowing accuracy required for the particular purpose.
requirements for banking purposes, and illustrating in- The uses of resource estimates are covered in more
vestment returns to investors and joint venture partners. detail in Chapter 26.
Individual property evaluations (reserves analyses) are

Table 4.4-1 Sources of Data

Units
Parameter Symbol SI Imperial Order Source of Data Requirements

Area A hectares acres Isopach map net pay Sufficient well control, geophysical
control, and identification of depo-
sitional pattern and type of trapping
2
3
Assigned area
Spacing units } Establishing relation to drainage
and adequately applying average
thickness

Thickness h metres feet Core analyses Representative recovery


net pay Applying proper cutoffs
2 Porosity log deter- Establishing proper core-log
mination based on log relationship
core relationship Correlation for hole conditions
3
4
Log combinations
Porosity log } Proper identification of
lithology or rock matrix

}
S Other wireline log Assessment of gross pay
only may be possible
6 Geologist's log

}
Porosity decimal fraction Core analyses Assessing weighted average
porosity of net pay
2 Log analysis based on
Varied with lithology or matrix
log core relationship
3 Log combination Lithology identification and
4 Single porosity log } use of empirical relationships

S Derived from another


well in the same pool or
another pool in the
same zone
} Acceptable comparison

(cont'd)

32
r OVERVIEW OFPART TWO

Table 4.4-1 (cont'dl

Units
Parameter Symbol SI Imperial Order Source of Data Requirements

Water Sw decimal fraction Oil base core Noncontamination of sample


saturation
2 Capillary pressure test Representative samples for testing
3 Log analyses based on Adequacy of determination of
core correlation formation water resistivity, R", from
water sample or logs
4 Log analysis using Adequacy of determination of R"
combination logs from water sample or logs
S Resistivity vs. Variation of porosity affecting
estimated porosity resistivity
6 Cores and/or logs from Validity of comparison
samepool orname zone
7 From correlation with Establishment of correlation
porosity or permeability
Formation Bo m 3/sm3 bbl/stb 1 Oil analysis Acceptability of sample
volume factor
2 Comparison to similar Similar reservoir conditions
gravity crude
3 Correlation curves Validity of correlation
Gas Z dimensionless Gas analysis reservoir Acceptability of data
compressibility and pressure
factor
2 Comparison to reservoir Validity of comparison
at similar depth with
similar gas
Formation Pr kPa psia Bottom-hole pressure Adequate pressure buildup
pressure bomb gauge
2 From other wells in pool Representative of subject well
3 From other pools at same Acceptability of pressure-depth
depth relationship
4 Estimated from depth vs. Adequacy of correlation
pressure correlations
Formation Tf C OF Bottom-hole temperature Mechanical operation of
temperature measurement - bomb equipment
2 Logs Temperature of mud reflecting
formation temperature
3 From other wells in pool Adequacy of data
4 Other pools at same depth Validity of particular depth
correlation
S Depth vs. temp correlation Validity of particular depth
correlation

33
DETERMINATION OFOILANDGAS RESERVES

4.7 BACKGROUND AND EXPERIENCE of that answer-is a test in deductive reasoning. The
OF EVALUATORS process may be considered partly an art and partly a
An evaluator, in estimating oil and gas resources, must science.
play the role of a modem-day Sherlock Holmes. The The depth of experience of the evaluators plays a large
investigative process-sifting through conflicting role in the acceptability oftheir answers. Drawing from
evidence, checking the validity of data, selecting the many disciplines-geology, geophysics, engineering,
best parameters, putting together the conclusions in petrophysics, and statistics--evaluators require the full
terms of an answer, and testing the reasonableness background of knowledge in order to arrive at the best
answer possible given the available data.

34
r
Chapter 5

ESTIMATION OF VOLUMES
OF HYDROCARBONS IN PLACE

5.1 RESERVOIR AREA AND VOLUME Core for lithology, environmental analysis and
5.1.1 Introduction measurement of parameters
The two methods for estimation of original in-place Log response and evaluation
volume of hydrocarbons are volumetric mapping and Pressure and pressure transients
material balance. During the initial delineation and Fluid composition
development of a field, volumetric mapping is the key Fluid contacts
to estimation, possibly aided in the very early stages by
Test data and more extended production data
analogous field data. As depletion proceeds and adequate
production history becomes available, material balance 5.1.2 Acquisition of Data
may represent a practical second method and may
The scope of reservoir study and data acquisition
eventually become the most accurate procedure. Reas-
starting at field discovery and extending over the life of
onable confirmation between the two methods can
the pool must meet the technical objectives, but must
provide assurance that appropriate data and assumptions
also realistically reflect the cost and potential benefits.
have been used for each estimate.
The information collected should meet both short- and
Certain reservoir factors tend to reduce the applicabil- long-term requirements. Ifimportant data is not collected
ity of material balance and reinforce the importance of when it is available even though it is not yet needed,
volumetric mapping throughout the life of the field: there are likely to be serious regrets later when the in-
Moderate to strong water drive formation is no longer available or can only be obtained
Low average permeability at prohibitive costs.
Complex internal architecture and poor lateral or The very basic data items such as logs and samples
vertical continuity for formation tops are acquired rather routinely. Some
of the other items are discussed in the following
Any of these factors may make it difficult to obtain a
subsections.
representative average pool pressure in response to
production. Seismic Data
The capability of mapping the "container size" as the Seismic can be a useful tool for mapping, depending
basis for volumetric estimation is primarily determined on the geological setting and reservoir objectives.
by the interrelationship of the geological complexities Traditional seismic has been used to provide the transit
and the amount, quality, and type of data. Well control, time from reflection horizons to define depth and form
and the spacing of wells compared with the size of the of subsurface structures.
accumulation are usually the most important consider-
Seismic technology has advanced tremendously in the
ations. Where applicable, the quality, amount, and
last several decades. Digital recording leading to com-
positioning of seismic data may also be very important.
mon depth point seismic and the growing computer
Information on the following is also important to capabilities for data processing, have been keys to this
volumetric mapping: advance. However, in many instances the depth response
Formation tops from logs and sample data is still all that can be extracted from seismic. In a good
Cuttings samples number of geological settings where seismic quality per-
mits, "stratigraphic seismic" may also be important.
With this method, the amplitude response ofthe recorded

35
-
DETERMINATION OFOILAND GASRESERVES

signal may provide data relative to lithology, porosity Analogous Fields


and-when the seismic signalis particularlyclear-fluid
Another aspect to be kept in mind is that others may
content of the reservoir horizons.
have drilled or be drilling in analogous field settings
The "new kid" on the seismic block is 3-D seismic, relative to the field of specific interest. Utilizing
which has quickly gained major importance in many this data as it becomes available may help maximize
geological settings, particularly as a development tool usefulness of limited data sets.
with great potential for assisting in reserves mapping.
The basic response and data provided by 3-D seismic Extended Flow Tests
are no different than those obtained from conventional Horror stories are told of significant investment in
seismic. The difference is in the configuration of a 3-D facilities and equipment for a well that declined pre-
survey, which is set up to provide a closely spaced grid cipitously when put on production. If analogous field
ofdata points. This grid allows a more continuous three- data indicates a significant risk, an extended flow test
dimensional definition of structuraland other geological might provide insurance against such an occurrence. As
variations. the size of the project increases, the risk exposure in-
If seismic data is applicable to a reservoir, it probably creases proportionally. The running of extended flow
will have been gathered early in the exploration phase. tests must be weighed against certain considerations:
Ongoing interactive review incorporating new wells The level of apparent risk
must continue well into the development process. It also
The cost of the test
may be appropriate to shoot additional seismic to help
resolve problem areas or incorporate new technical ad- Whether it is practical, given the properties of the
vances. The potential benefits from 3-D seismic, for reservoir, to run the test long enough to resolve
instance, should be carefully considered, usually the possible lower size limits
sooner the better. Another aspect to consider in incor- Environmental and conservation concerns
porating seismic data is that processing capability Another option is to put a pool on production with
is continual1y improving. When field reviews are minimum investment to allow extended production data
undertaken, reprocessing may offer data improvement to be gathered. If warranted, further development
without the added cost and possible timing delays of optimization can then be undertaken at minimal risk.
new shooting.
5.1.3 Data Analysis
Original Pressure Data
Data accumulates rapidly during the delineation and
Undisturbed original pressure data can only be obtained early development phase of field development. The
before significant production is taken. Unless the reser- volume of data and pace of activity can often lead to a
voir is very small, normal production testing will not be tendency to handle one well at a time and lose some
a problem in this regard. Good initial pressures in gas, perspective on the big picture. Periodic field-wide re-
oil and water columns allow construction of pressure- views of all geological data and related engineering
depth plots for fluid contact definition. A geographic material provide the best chance for optimal solutions.
spread of original water phase pressures will assist in Also, careful management of data accumulation and
determining whether hydrodynamics are important in study scheduling will ensure that holes in data sets
the region. are minimized and that the cost-benefit ratio of data
acquisition is efficient.
Pressure Transient Analysis
In recent years high-resolution pressure recorders have Depositional Environments
provided another possible source of information relat- The recognition of depositional environments and their
ing to reservoir limits. This process relies on the relationship to reservoir development is basic to petro-
interpretation of very subtle pressure changes. Careful leum geology. The study of recent deposits as "a key to
design of the procedure in consultation with experts is the past" is a common theme of sedimentary geological
necessary, as well as care in the acquisition ofdata. One training. Outcrops and producing fields provide a record
of the difficulties, as with any kind ofreservoir simula- of ancient depositional environments and resulting res-
tion, is that the results are not unique and must be ervoir patterns. The extensive literature available on
corroborated with other information. these subjects should be searched for analogous field
data in any major field study.

36

s
ESTIMATION OFVOLUMES OFHYDROCARBONS INPLACE

Adequate core coverage is required to define environ- traps, may be used for reference. Analogous field data
mental concepts in the subsurface. Proper core spacing is also very important when considering trapping.
and intervals depend on the complexity of the patterns The exploration concepts that led to a discovery would
of reservoir development. Data gathering must be have included an interpretation of hydrocarbon source
appropriately resolved in the early stages of delineation and trapping. This interpretation should be reviewed and
and field development. Nearby analogous fields may refined or revised, if necessary, at an early stage. Most
add to tbe database. basins or play areas tend to have a limited suite of trap
Once depositional environments are resolved from core, types of economic importance. Trapping should be un-
it may be possible to expand the study into noncored derstood within the limits of available data before
wells by calibration to log response. However, there is detailed reserves mapping proceeds.
always more risk of error when using logs rather than
core for environmental interpretation. Reservoir Continuity
Larger scale structural and stratigraphic features are of
Primary Porosity and Diagenesis
first-order importance in determining the limits ofa res-
Primary porosity is retained in sedimentary rocks ervoir and the volume of gas or oil in place. Limits may
through deposition, initial burial, and lithification. This be defined by faults, folds, facies changes, diagenetic
type of porosity and the patterns of its occurrence are boundaries, or erosional surfaces.
easily related to depositional environment. Most sand- It is often unclear in the early stages of exploration and
stones and some carbonates are dominated by primary development whether an accumulation of oil or gas is
porosity. in a single pool ora series of pools in close proximity.
Subsequent to the formation of primary porosity, The keys to resolution ofthis question may be provided
sedimentary rock is often subjected to increasing or vary- by pressure; pressure-depth plots; gas, oil and water
ing temperature, pressure, depth of burial, and ground compositional data; and indications from fluid contacts.
water regimes. As a result, minerals may be dissolved The degree of internal continuity and homogeneity
or precipitated. Also, the reservoir rock may be within a pool is an important geological feature relative
fractured. The processes creating tbese changes in the to recovery efficiency. Detailed cross sections or fence
rock fabric and properties are called diagenesis. The dia- diagrams are usually necessary to resolve the details of
genetic overprint and the resulting porosity and internal reservoir architecture.
permeability changes mayor may not be closely related
to original depositional features and patterns. Diagenetic Fluid Interfaces
porosity development may, in fact, be controlled by Fluid interfaces important in reserves determination
something entirely different such as fault and fracture include the following:
sets or erosional surfaces. Diagenesis and its controls
Gas-oil
and results must be considered in reservoir mapping,
particularly in carbonate rocks. Oil-water
Gas-water
Type of Trap
Pressure-depth plots provide the best technical resolu-
Petroleum deposits may accumulate in three basic types tion oftbese interfaces when good quality pressure and
of traps: fluid density (gradient) data is available above and be-
Structural Traps, which are formed by rock layers that low the contact. This method defines a contact even in
have been folded or faulted undrilled or untested intervals (Figure 5.1-1).
Stratigraphic Traps, which are formed by depositional, In medium- and coarse-grained reservoirs of high
diagenetic or erosional processes porosity and permeability, the transition from hydro-
Hydrodynamic Traps, which are created by moving carbons to water will be sharp and easily defined by
formation water, buoyancy, and density interaction with well logs. Flow testing will also be conclusive to defi-
a hydrocarbon accumulation nition of contacts in this type of reservoir if wells and
test intervals are properly located.
These traps may occur alone or in combinations of
differing dominance. Mapping patterns and style depend Capillary effects in the small-diameter pore systems in
very much on the types oftrap. Petroleum geology texts, fine-grained rocks result in long hydrocarbon-water
which usually contain extensive detailed material on transition zones and considerable difficulty in

37
DETERMINATION OF OIL AND GASRESERVES

1700 5.1.4 Mapping

~ t- Gas Gradie~t
4.4 kPaim
Resolution ofthe "container size and shape" by a map
of the hydrocarbon-filled reservoir is the single most
important step in volumetric reserves estimation. Since
1800
the reservoir is a three-dimensional form, vertical

1\
-;;;-
'"
..
s: 1900
\ illustrations such as cross sections, fence diagrams,
or isometric drawings may also be required to under-

~
15.
Ql
\ stand pool geometry. Examples of forms requiring
c vertical diagrams include complex faulting, major
'~"
o
'E 2000 unconformities and salt dome intrusives. Once the
vertical geometry is better displayed and understood,
Ql
\\ 2028 TVD(m ss)
::> \(ree Water Level more accurate maps may be drawn.
>::
2100 Maps for Volumetric Estimation

I~
Water Gradient / The interplay of structure, fluid contacts, and porous
10'18 kPaim reservoir variations requires at least the combination of
2200 a structure map and an area or volume map. In many
34 36 38 40 cases, construction of a series of maps prepared in a
Pressure (mPa) logical sequence may be the best technical approach.
This could include some or all of the following:
Figure 5.1-1 Pressure-Depth Plot for Free Water Structure Maps, which may be:
Level Determination
Top formation or top porosity, showing location of
resolving the water level. For example, in the Turner faults and fluid contacts
Valley Formation gas reservoirs in the Alberta foothills, Base formation or porosity with limits as above
the change from fully water-saturated zones to irreduc- Fault plane structures
ible water saturations may occur over an elevation
Ifboth top and base porosity structure maps are drawn,
exceeding 100 metres. In this extreme case, accurately then a gross pay isopach map can be derived by cross-
defining water levels is difficult using only log or test contouring.
data.
Isopach Maps, which are maps of thickness variations
Gas-oil contacts may also be difficult to resolve. of gross or net pay showing reservoir limits controlled
Pressure-depth plots offer a technical solution when
by structural form, fluid contacts, depositional features,
quality data are available. Flow testing, including
diagenesis, erosional features, or combinations of these
wireline repeat formation tester (RFT) data, may be
controls. The isopachs of gross and net pay thickness
helpful. The neutron and density log combination can
variations are simple geometric depictions of the reser-
be definitive where the contact is located within a drilled
voir form that can be assessed for "geological
continuous porous section. reasonableness" with some confidence.
On rare occasions, reservoir character and seismic Porosity-Thickness (<I>h)* Maps, which may be drawn
quality may be sufficient to define fluid contacts by "flat directly or constructed by drawing maps on the
events" on seismic sections.
individual parameters and cross-contouring. Porosity-
Hydrodynamic trapping will result in tilted oil-water thickness mapping is particularly important where
contacts with a tilt proportional to oil-water fluid den- porosity in the reservoir is variable and average poros-
sity differences and flow velocity. Tilted contacts may ity would not approximate the reservoir void space in
not be evident where a very local area is under study, all areas.
but they become evident on a larger scale. Accuratereso-
lution of this type of contact may be extremely
significant to reserves definition. Gas accumulations
may also occur in hydrodynamic settings, but the den- Porosity is represented by thesymbol "1\>" inthismonograph
sity difference of water and gas is such that measurable and in the petroleum industry generally. The thickness of
tilts on gas-water contacts are unlikely. the reservoir is represented by the symbol "h."

38
ESTIMATION OF VOLUMES OF HYDROCARBONS INPLACE

Hydrocarbon Pore Volume (HPV) Maps, which may can remain uncertain well into the field development
be drawn directly or by cross-contouring ljlh with I-S w phase. Closely spaced drilling may provide the
values." HPV mapping is particularly important when only method for resolution of reservoir limits in this
water saturations are variable within the reservoir. circumstance.
Where a series of maps is drawn showing interrelated The Choice of Map Types
values, cross-contouring is required to ensure that the
maps are compatible. If cross-contouring is being done The final map to choose as a basis for volumetric
by hand, maps on two separate variables are overlaid calculation is a matter oftechnical judgement: a simple
and, at each point where contours ofthe two maps cross, productive area map, an isopach map depicting rock
a related variable is calculated by the appropriate arith- volume, a pore thickness (ljlh) map, or a hydrocarbon-
metic manipulation ofthe individual values. Figure 5.1-2 pore volume (HPV) map. The choice should be based
shows the derivation of a porosity-thickness (ljlh) map on careful appraisal of the degree of complexity that
on porosity and net pay thickness. The manual process can be fairly represented with the da!a available. Simple
is tedious, but current computer mapping software can maps such as productive area or gross pay isopach maps
handle it readily. represent physical forms that can be readily assessed
for realism. Maps that combine parameters are not as
The use of cross-contouring to combine parameters in a
easy to relate in detail to physical forms even though
technically rigorous process is warranted when indi-
they often tend to be dominated by a single variable
vidual parameters have consistent patterns that can be
such as gross pay thickness.
drawn with reasonable accuracy and with greater assur-
ance than the combined value. For example, a ljlh map Interpretive geological mapping offers the potential of
can be constructed by preparing a map of porosity varia- providing the best representation of the reservoir if ad-
tions and an isopach map ofnet pay, and then combining equate data is available and the practitioner is thorough.
them by cross-contouring. The less rigorous alternative One general rule worth considering even with interpre-
is to calculate and plot ljlh values at each well location tive mapping is that the simplest interpretation that fits
and construct the map directly from the combined vari- the data and the geological concepts is often the best.
able. If individual data such as ljl does have a defined Even with a thorough and technically sound interpreta-
trend, it may tend to be lost in this methodology. tion, if there is freedom to vary the reservoir size
significantly, interpretation can introduce the risk of
Reservoir Limits and Wedge Zones significant error. Careful assessment is required to
Structure maps based on seismic depth data and define when this leads from the booking of "proven" to
available well control are often the first maps constructed "probable" reserves.
on an oil or gas pool. Limits defined by structure and In summary, mapping concepts may be reduced to a
known fluid contacts may then be located. In dipping few simple concepts to consider:
reservoirs, the area of fluid interfaces, for example, the I. Assessing specific data available, analogous fields,
oil-water interface, produces a wedge area where the and geological concepts in order to understand and
geometry must be carefully handled. This wedge area visualize the feature to be mapped
is geographically defined when the structure is mapped
2. Separately mapping each significant data item that
on both the top and the base of porosity.
shows a definable pattern of variation
Dipping faults may also create wedge areas, and solu-
3. Combining maps by cross-contouring where appro-
tion of this geometry may require drawing a structure
priate (Figure 5.1-3 illustrates a series of maps)
map on the fault plane. When faults are steep, the wedge
area may become very small and may be reasonably Mechanically Contoured Maps
represented by a median line.
Where a large amount of data is available at reasonable
In stratigraphic traps, reservoir limits may not be spacing, an alternative method of reserves mapping is
defined by structure maps, evident gradational thinning, to use evenly spaced (mechanical) contours. This
or other simple techniques. Seismic amplitude response amounts to linear interpolation between actual well data
might be helpful in some cases, but stratigraphic limits points. The method may require some interpretation to
assign reservoir boundaries, but once this is done the
freedom to vary the result becomes limited. For this
Water saturation is represented by the symbol "Sw"
reason it is often used in unit or joint venture projects
throughout the monograph.

39
DETERMINATION OFOIL AND GAS RESERVES

I
/
I
/
/
/
/
/
/
/
o /
,,<:)
, <:).
/ ,
/ /
/ /
/ /
/ /
/ /
/
/ /
/ /
/ / /
/ /
/ _ O.Oe / /
/ /
/ /
/ I
/ I
/ I
/ I
I
'b I /
I
I /

\
I
I <:)'0
<:).
I
I ;'
/
I /
/

(a) Net Pay Isopach, h (m) (b) Average Porosity, $ (fraction)

(0) (0)
/
/
/
/
hX$=$h /

(1.0) 0 (1.0)
/ o
\/? (0) (0)

7~ / (a)
(2.0)
...
'0 (0)

X (1.6)
'"i::>
/ (.6) X (.6)
'b I
I I

I
I
,/
I
'"i::>
I
I

(2.4)
<:)'0
C). \
(2.4)
/
/ (1.2)
/

(c) Overlay h Contour and $ Contours


(calculate $h at intersections) (d) Contour Map of $h (m)

Figure 5.1-2 Cross Contouring

40
ESTIMATION OFVOLUMES OFHYDROCARBONS INPLACE

Gas-water contact Gas-water contact


(2603) intersects (2603) intersects
base reservoir top reservoir

I 1 mile I I 1 mile I

(a) Structure on Base Porosity (rn ss) (b) Structure on Top Porosity (m ss)

0.8

3.0
Note:
Gross thickness map was developed by
computer cross-contouring structure
maps.

I 1 mile I

(c) Gross Porous Thickness (m)

Figure 5.1-3 Series of Related Maps (zero edge from seismic, computer-contoured) (ZYCOR
Software)

41

n
DETERMINATION OF OIL AND GAS RESERVES

where variations in interpretations can lead to dis- capability to adequately represent complex forms
agreement and impasse. The mechanical method of depends very much on the quantity and spacing of the
contouring minimizes extension of high contour values data being mapped. Since computer mapping uses
into undrilled areas and, in contrast to an interpretive mathematically defined best-fit surfaces, the result
map, may provide conservative reserves volumes. is noninterpretive and tends to be somewhat mechani-
The strength of mechanical contouring is that if done cal. Combining computer mapping on individual values,
properly it honors the available hard data with minimal editing for geological concepts, and cross-contouring
interpretation. Its weakness is that unless the patterns the map series can produce a map that is geologically
are very simple it does a very poor job of representing sound.
the geological patterns and reservoir variations. It should A major benefit of computer mapping is the ability to
be recognized as only a simple approximation for joint use cross-contouring techniques and to calculate vol-
venture and reserves assignment. It is not a geological umes. Even where hand-drawn interpretive maps are
map. An example of an interpretive and mechanically required to capture the geological concepts, it may be
contoured map of the same data is shown in Figure appropriate to digitize maps into computer format to
5.1-4. use these computational capabilities.

Computer Mapping Another benefit (curse?) of computer mapping is that it


is possible to test a range of different assumptions and
Advanced software is available for computer mapping analytical approaches. This can be very useful ifproba-
ofreservoir parameters with a number of contouring op- bilistic reserves estimates are being prepared. Preparing
tions. The computer is very good at handling simple a range of map interpretations can be an onerous task
surfaces such as structure maps, but may have problems without computer technology.
with complex surfaces and fault discontinuities. The

/I
Yankee

1 mile 1 mile

(a) Offshore bar cut by meandering shale filled channel. (b) Samedata as used in (a) but contoured ignoring
Environmental concepts may be assisted by log, core, environmental concepts. Apparenttrap integrity and
seismicdata, or nearby analogous fields. volumes are quite different from (a).
Source: AfterWeinmelster, 1989.

Figure 5.1-4 Examples of Mechanical and Interpretive Mapping

42
ESTIMATION OF VOLUMES OF HYDROCARBONS IN PLACE

5.1.5 Refinement of Volumetric References


Estimates Weinmeister, M. 1989. "Calculating Recoverable Gas
With time and addition of data in any of the areas in Place from Volumetric Data." Shale Shaker,
discussed, it is reasonable to expect that the uncertainty May-Jun. 1989.
of volumetric estimates can be narrowed. The best
answers are obtained when the maturity ofthe field pro-
vides an extensive database, all reasonable sources are
incorporated in the solutions and-where discrepancies
between sources arise-preconceptions are challenged
and either confirmed or revised. On occasion, new tech-
nology such as 3-D seismic, wellbore image logs,
or other similar advances may supply better answers.
Using all of the data sources may require crossing
technical discipline boundaries; thus working in
multidiscipline teams is a growing trend in many
companies.

43

R
DETERMiNATJONOF OIL AND GAS RESERVES

5.2 THICKNESS At this stage geoscientists will map "gross reservoir"


and "net reservoir." Later, after the bulk reservoir el-
5.2.1 Introduction ements have been adequately defined and mapped,
Next to the areal extent of the reservoir under study, the economic considerations will come to the forefront as
thickness value referred to in engineering terms as "net the reservoir engineer asks the geologist to produce a
pay" is the most variable component of the oil-in-place map showing only the outlines of the hydrocarbon
equation. It is frequently the most poorly defined and accumulation.
misunderstood term in discussions of reserves. The terms "gross pay" and "net pay" are used to
The confusion stems mainly from the differences in describe reservoir thickness. Gross pay, referring to the
focus of the two contributing disciplines: geology and total hydrocarbon-bearing zone, frequently includes
reservoir engineering. The geologist is concerned first intervening nonproductive intervals that may be present
with mapping the discrete reservoir elements in ques- in the reservoir (Figure 5.2-1). Net pay refers to the sum
tion irrespective of any real or commercial segregation of the productive sections of the reservoir and is deter-
dictated by gas-oil or oil-water interfaces. mined by the application of cutoffs, which are the
specified lower limits of core or log data (porosity,

OPHI 0.0
0.6000 0.0

.-..."""-CNL Porosity
FOe Porosity

, -
-e..-_ _

---
,
--
,,
\
\

\
c;:"
-
..... ---- , ,
:::

-.----ill
\

CAL - caliper DS - bitsize GR - gamma ray (APi) NPHI - neutron porosity


CNL - compensated neutron log DPHI - densityporosity ILd - deepinduction resistivity SFL - sphericallyfocused
CSU - cyber service unit FDG - compensated formation urn- medium induction resistivity laterotoq
density SP - spontaneous potential

Source: Schlumberger of Canada, 1985.

Figure 5.2-1 Reservoir Interval Terminology

44
ESTIMATIONOF VOLUMES OFHYDROCARBONS IN PLACE

permeability, and fluid saturations) below which a because they represent the first available evidence of
formation will be unable to achieve or sustain economic the productive potential of a well.
production. Cutoffs are determined by using existing Beyond the obvious quantitative porosity estimates
production information from the subject or similar for- afforded by neutron, density, and sonic tools, there are
mations, and by constructing correlations between the spontaneouspotential (SP), caliper, gamma ray (GR),
production, porosity, permeability, and water saturation and microresistivity devices such as the microlog. These
and the recoverable reserves requirements. provide further qualitative evidence that a zone is
While porosity and water saturation calculations (which capable of fluid production.
are discussed in subsequent sections) are subject to In heterogeneous reservoirs with thin beds of widely
certain inherent errors, none are large enough to change varying quality, some logs may not properly define net
the results by several orders of magnitude. The same is pay due to their tendency to average or smooth porosity
not true for net pay. over larger intervals. This problem is most acute in
Net pay is also important in determining the total amount previously explored areas with a high number of older
of hydrocarbons in a reservoir so that the total amount logs.
of energy in that reservoir can be calculated. Net pay in
this context can be much higher than the value used in Core
the oil-in-place equation because here it can include Full-diameter or wireline-retrieved small-diameter cores
intervals located in transition zones and even below pro- offer a further level of definition beyond that accorded
ducing oil-water contacts. by logs alone. Permeability measurements may be
Another major criterion in determining net pay is the matched to porosity to confirm or enhance the selection
potential oil available for future secondary or tertiary of the lower level of producibility. It is useful to note
recovery programs. In such programs displaceable net that the absolute value of permeability for a given res-
pay may not equate to net pay in a pressure depletion ervoir and reservoir fluid dictates what the equivalent
process, particularly in the case ofa very heterogeneous porosity cutoff will be, and not the reverse.
reservoir.
Porosity-Permeability Cutoffs
Net pay may also be used during the unitization
The empirical selection ofporosity cutoffs to determine
process either as a stand-alone figure in net pay maps or
net hydrocarbon pay is best accomplished for normal
as a guide for development drilling programs. Clearly,
oil and gas reservoirs by using core permeability-
the purposes for which net pay calculations will be used
porosity cross-plots. Using minimum air permeability
will dictate how they should be determined.
values of 1.0 mD (for medium to high gravity oils),
5.2.2 Defining Net Pay 0.5 mD (for wet gas), and 0.1 mD (for dry gas) will
yield approximate effective porosity cutoff levels for
Logs commercial hydrocarbon production into wellbores.
Wireline logs of all types have been incorporated into These cutoffs are empirical (i.e., based on testing and
the process of defining net pay. Porosity tools, by their actual production) and are a function of many param-
very nature, offer the most universally consistent net eters such as fluid viscosity (mobility), rock grain size
pay criteria. Where single porosity tools are utilized to and pore size (pore geometry), rock cementation and
characterize reservoir porosity, the analyst will typically infill, wettability, and capillary pressure properties.
determine the tool reading corresponding to the appro- Porosity cutoffs usually increase with decreasing pore
priate lower limit of porosity and draw a vertical line and grain size as illustrated in Figure 5.2-2. This plot
down the log. All reservoir exceeding this lower limit was generated from a large database of actual core data
may be integrated to arrive at a value for net pay. acquired from dozens ofclastic and carbonate reservoirs
Where multiple porosity tools have been run and a more scattered across the western Canadian sedimentary
sophisticated solution approach has been employed, basin.
cutoff values, typically in the 2 to 4 percent range for Exceptions to the cutoffs listed are gas accumulations
most carbonates and 7 to 10 percent for many sand- in the microdarcy range 0.1 mD) and heavy oil in
stones, will be applied to the computed data. In this way unconsolidated sands. Although sophisticated, large
logs are employed as the primary filter for net pay fracture treatments have been employed on wells in
the microdarcy range; however, such low-rate gas

45
DETERMINATION OF OIL AND GASRESERVES

1000 when applied to net pay computations, but it is often


essential in the evaluation process to estimate even semi-
:;;: quantitatively the effective permeability of the reservoir.
100 ~
::;
i;::
.s The open-hole drill stem test option affords the best
0-
g

0
~
-e
c
'"
e
overall assessment of net pay criteria because, under
ideal circumstances, large volumes ofthe reservoir fluid
e 0
~ 10
:;; {j
~
~ can be recovered and studied in addition to the exten-
sive drawdown and buildup pressure data that is
'"
~


LL
~
E
~ obtained.
~
()
Q. 1.0 r
c
~
0
'in 5.2.3 Data Acquisition Programs
~'"
()

0.1 .= Logs
The earliest methods for using logs to select net pay
intervals involved the use ofSP or OR logs. Using curve
inflection criteria for determining the top and the base
o 10 20 30
ofeach reservoir unit remains a valid method ifthe strati-
CGL::: conglomerate
Core Porosity ('Yo)
Source: PanCanadtan Petroleum Lid. graphic unit is a simple clean sandstone-shale sequence
with very porous and permeable sandstones present.
Figure 5.2-2 Air Permeability vs. Porosity However, the blanket assumption that all porous and
permeable reservoir units are capable of production is
production is considered to be uneconomic at the present dangerous. Bitumen can be present in different forms: a
time. The porosity cutoff for commercial primary pro- tar mat or solid pyrobitumen. Disseminated shale, py-
duction of heavy oil from wellbores is estimated to be rite particles, bitumen, or other blocking or cementing
approximately 27 percent. Air permeability cutoffs materials can seriously impair the capacity of a reser-
should not be used for heavy oil sands because the voir to produce hydrocarbons and thereby disqualify it
measurement of air permeability in disturbed and ex- as net pay.
tracted heavy oil sand is quite meaningless. At this When conditions such as these are known to exist or
porosity level, the sand is becoming poorly cemented where the reservoir approaches the lower limits of the
and mobile, permitting the heavy viscous oil to move producing porosity-permeability regime, more sophis-
sufficiently for economic production. These oils have ticated logging methods must be considered. Here, all
the capacity to carry loose sand grains, as well as small the porosity measuring devices may be employed de-
amounts of connate water or gas bubbles. This flow pending on availability, cost constraints and hole
mechanism is far different from that ofconventional oil conditions. In clastic sequences, the neutron-density-
and gas reservoirs. caliper combination in conjunction with the microlog
and a standard induction resistivity device will resolve
Flow Tests
most net pay situations satisfactorily.
The ultimate test of the ability of a reservoir to give up In mixed lithology carbonate reservoirs, where gas
fluids is the actual flow test. During the drilling process may be present, additional care must be exercised, par-
and just prior to the decision to run casing in a well, an ticularly in the choice of the proper resistivity device.
operator has two options available: Where matrix porosity is low and water saturation is at
I. Open-hole/closed-chamber drillstem test (DST) or near irreducible conditions, resistivities can easily
2. Wireline formation test (WLT) exceed 2000 ohm-metres. The choice ofa laterolog over
Judicious use of these tests can enhance the reservoir an induction device may be advisable if resistivity is to
analyst's ability to discriminate between pay and non- be used as a net pay discriminator.
pay zones. Approximate values of in situ permeability An additional environmental consideration involves
can be calculated from WLT data, the object being to thin bed resolution. Thin beds are defined not only as
sample a cross section of the elements of a reservoir vertical variations in lithology, but also may include
unit and project the permeability data to cover the en- any closely spaced changing petrophysical parameter
tire reservoir. WLT techniques are at best "quick-look" that makes evaluation difficult. Rapid fluctuations in

46
ESTIMATION OF VOLUMES OF HYDROCARBONS INPLACE

porosity type, rock texture or pore type may combine to wetlability, relative permeability, and sensitivity to
preclude proper evaluation with standard logging meth- completion fluids and methods. In order to determine
ods. Where thin hydrocarbon-bearing laminae are the appropriate analyses required, the core retrieval and
thought to be present, the addition of a mud-gas log to analysis program must be designed so that all coring
the open-hole logging program is advisable. objectives may be achieved.

Core A flow chart depicting the process of designing and


implementing a core analysis program in net pay deter-
Core data are used to supplement and calibrate log data mination is shown in Figure 5.2-3. Ofcritical importance
when net pay is being determined. In addition to poros- is identification of the reservoir properties that must be
ity and permeability, other properties may be measured measured in the laboratory to aid in the determination
in the laboratory to determine whether the interval of of net pay. Once the coring objectives have been
interest possesses the properties required for inclusion defined, the operator must design the retrieval and analy-
in net pay. These supporting properties include water sis programs in conjunction with the relevant service
saturation, electrical properties, capillary pressure,

I Establishment of Coring Objectives I


I
rDesign of Core Retrieval Program I
I
Core Retrieval and Preservation
j
I Core Gamma I
j
Core Description and Sampiing
For Basic Core Analysis
I
Basic Core Analysis
Porosity
Permeability
Fluid saturation
j
I I
I Sampling For Reservoir I Sampling ForSupplementary I
Quality Analysis Core Analysis
I I
Petrologicai Studies Sample Screening
x-ray methods
I
and Reservoir
QuaiityAssessment I
Supplementary Tests
Electrical properties
Clay swelling
FInes mobilization
Wetlability
Capillary pressure
Relative permeability
I
j
I Data Synthesis I
I
Net Pay Calculations I

Figure 5.2-3 Flow Chart for a Core Analysis Program

47

rtn-. _
DETERMINATION OFOIL ANDGASRESERVES

companies. Factors such as core barrel type, drilling porosity, post-depositional processes in sands such as
fluid and core preservation methods may be important. compaction and cementation can shift the porosity-
Once the core has been retrieved, it is shipped to the permeability trend line. For example, increasing poros-
laboratory for appropriate analyses. ity associated with constant permeability might indicate
the presence of more numerous and smaller pores.
Well Testing
The concept of mean hydraulic radius is gaining
A wide variety oftesting services and equipment is avail- acceptance as a better method to distinguish reservoir or
able to accomplish the objectives of the reservoir hydraulic units (Amaefule et al., 1988). Mean hydraulic
engineer in a safe and efficient manner. If the limita- radius distinguishes pore morphological changes that
tions ofvarious systems are understood, factors such as porosity and permeability alone cannot characterize.
excessive downhole pressure and temperature, rough
borehole conditions, and the presence of highly toxic Water Saturation
hydrogen sulphide can be dealt with in advance to Water saturation is the next most frequently employed
arrive at an optimum testing strategy. Service company parameter used by reservoir engineers to describe the
experience has shown that the presence of those three quality ofthe reservoir unit being investigated. Clearly,
factors in the Foothills region of western Canada seri- lower water saturations are indicative of better hydro-
ously limits the application of open-hole testing. Such carbon production potential. Water saturation, or any
limits apply to a lesser degree to the remainder of the fluid saturation for that matter, may be affected by a
basin except where the presence of H2S is suspected. multitude of rock properties (composition, grain size or
An effective program must start with a clear idea of the shape, packing, sorting and cementation); therefore, use
priorities given to the following objectives: ofa single saturation cutoff could have serious implica-
1. Reserve definition for either primary or secondary tions in rapidly changing rock types.
horizons Fluid Contacts and Transition Zones
2. Stimulation treatment design criteria for follow-up
The identification of the various fluid contacts, the
completion attempts
location of the transition zone, and the determination
3. Gathering of reference data to allow drilling and of other petrophysical, geological, and production
completion engineers to plan future wells for maxi- characteristics are essential for accurate assessment of
mum efficiency by reducing reservoir damage what constitutes net pay in the wellbore. This data
created by the drilling or completion process may then be used to estimate reserves, hydrocarbon
5.2.4 Data Interpretation column heights, productivity, water cut, and production
economics.
Net pay has been defined as reservoir rock that meets
various quantitative cutoffs such as porosity, effective Fluid contacts may be identified using core analysis
permeability, and water saturation. The parameters used (capillary pressure), logs, or pressure data. In a reser-
to distinguish net pay are usually well-defined for the voir that is thick enough, a plot of formation pressure
formation and pool or area from a history ofproduction vs. elevation can yield both formation fluid type and
characteristics for the area. For a specific well to be kept interface location. Several pressure readings in gas, oil
for production, it normally must have a net pay thick- and water zones are required. Plotting and connecting
ness sufficient to contain enough hydrocarbon reserves points of common slope identifies the fluid types.
to pay for the well completion plus an acceptable profit. Extrapolation ofthe lines to points ofintersection yields
Wells with less net pay than this should be abandoned hydrocarbon-fluid contacts as illustrated in Figure
ifthey are not required for other purposes such as water 5.2-4.
injector or disposal wells. The analysis of these plots to determine vertical
pressure continuity in a single well or horizontal conti-
Porosity nuity from well to well is not straightforward because
Porosity is the most popular reservoir quality indicator, permeability barriers can also be present.
and this is unfortunate because the same enviromnental Where determinable, the most useful values are the free-
and depositional factors that influence porosity water level (the water level if no rock material were
also influence permeability. Although increases in present), the 100 percent water level (the level to which
permeability are frequently associated with increasing water rises due to the presence of the rock material and

48
T ESTIMATION OFVOLUMES OFHYDROCARBONS INPLACE

.
.c
~ 15.
Q)
Cl

- -
-
- - -
- - - -
- - - ::: ::: -
- - - - -
- - -
- - - - - - - - - - - - -
- - -
- - - - - -
- - - - - - - - -
- - - - - - -
- - - - - - - -
- - - - - - ------------

~ Gas~~- ~

<;
Oil
\
- - - -
Water
-
\ \
-
- - -
- - - -
- - - - - -
-
-
- - - -
-
- - - -
- \
- - - - -
- - - - - - - - - - -
- - - - - -
- - - - - - - - - - - - - -
- - - - -
- - <> / /

O~
/ -----.- A--
- -
-:;/ / / / /
/ / / / / .r- Pressure
Source: Computalog Gearhart Ltd., 1990.
/ / /

Figure 5.2-4 Hydrocarbon Fluid Contact Identification from Pressure Gradients

the resultant rock-water capillary forces), the bottom of every logging tool. Except in extremely hostile (hot and
the transition zone (the same as the lOa percent water corrosive) environments (as encountered in deep sour
level), and the top of the transition zone. Across the gas reservoirs in the Alberta foothills), these two fac-
transition zone, water saturations will vary from 100 tors are normally manageable and ofminor importance.
percent at the bottom (lOa percent water level) to irre- Other factors that can, and often do, contribute to criti-
ducible water saturation at the top ofthe transition zone. cal errors are rugosity (roundness or smoothness) ofthe
Due to the varying relative permeabilities across the tran- borehole and the depth of invasion of the drilling or
sition zone as saturations change, the hydrocarbon and coring fluids employed.
water cuts will change from bottom to top, A "no flow" Most logging service companies employ sophisticated
situation is also possible. algorithms to correct their porosity tools for hole irregu-
larities, and use electrical devices to minimize the effects
5.2.5 Factors Affecting Data Quality
of drilling fluid contamination. However, the reservoir
Adverse Borehole Environments analyst must use caution when these corrections have
been employed near "the edge ofthe envelope." In cases
The reliability ofthe various net pay parameters, water
ofextreme borehole rugosity, for example, density logs
saturation, porosity, and net pay, when calculated from
become totally unreliable for porosity. Unless other tools
open hole logs or measured in full diameter cores, is
that are less affected by rugosity (i.e., the neutron and
directly related to the knowledge and understanding
sonic logs) are available, the use of nearby well control
of the borehole environment from which this data
data might be moreadvisablethan porosity data that
was drawn. A number of factors can influence this
seems "a bit high."
reliability level. The principal factor is the physical con-
dition ofthe borehole at the time oflogging. Bottom-hole Similarly, a quick scan of the log header on the primary
temperature and pressure can affect the functioning of resistivity device for evidence of either anomalously

49

e
=

DETERMINATION OF OIL ANDGASRESERVES

high mud weights or fluid loss characteristics is always core intervals. Occasionally they are also useful in
a worthwhile precaution. Either ofthese conditions may helping to reconstruct the correct depth sequences of
lead to excessive overbalancing and consequent flush- misoriented core.
ing of the reservoir which, in tum, can create thick Normally a core gamma logger is operated as a "total
mudcake buildup and lead to erroneous calculations of instrument," measuring all radiation in a certain, wide
water saturation. range of wavelengths. However, spectral components
Determination of net pay thickness is usually not due primarily to potassium, uranium and thorium
susceptible to direct measurement errors except where emissions may also be measured. Methods for using the
directional or slant drilling techniques have been spectral components to determine clay types, cation
employed. exchange capacities, clay volumes, and even to
Penetration ofany reservoir at anything less than a right evaluate source rock have been or are being developed.
angle to bedding will give erroneously high thickness To properly assess the problem of representation, it is
indications. Routine examination of the geological first necessary to measure the core and determine the
framework for the area, coupled with due diligence in amount ofrecovery vs. the length ofthe interval drilled.
the area of borehole trajectory, should remove this as a Ifthere is missing core, the lost core interval is custom-
concern in most instances. arily placed at the bottom ofthe interval. Often this does
not represent the true picture. The actual missing inter-
Core Representation val can be determined by a detailed comparison of the
When core data is being used to assess the net pay core gamma log to the downhole gamma log.
interval, it is important to realize that the core may, in
fact, not represent the true reservoir interval. The rea- Formation Heterogeneity
son for this is that often the entire zone is not cored or Most logging devices respond to particular properties
core may be lost, and therefore, there may be pay that of a formation that are related to the depositional and
must also be considered above or below the retrieved post-depositional history of the rocks. The search for a
interval. Proper sampling is essential if the resulting better understanding of porosity and permeability dis-
basic core analysis data is to be representative of the tributions in reservoir rocks has inevitably led to the
reservoir. Friable unconsolidated sandstones, fractured conclusion that geological environments may be recog-
reservoirs and reservoirs with alternating competent and nized from log shapes in correlatable zones. The first
incompetent layers often are not fully recovered during clues to the presence of nearby reservoir boundaries or
coring operations. Small (em scale) to large (m scale) heterogeneities may be derived rapidly and cheaply even
intervals may be ground up or washed out, leaving only when very little physical sample material (cuttings or
the competent zones and some rubble. Unfortunately, it cores) is available from wells. However, as the multi-
is the competent zones that are often tight and, there- tude of examples in Figure 5.2-5 illustrates, care must
fore, the core may represent only the poor part of the be exercised because log shapes are much more charac-
reservoir. teristic than diagnostic. Log shapes also tend to be more
The sampling should be based upon the lithological predictable and reliable in clastics than in carbonates.
distribution, porosity and permeability variations within Various logs are useful to calibrate geologic data.
the lithological units and the distribution of hydrocar- Spontaneous potential logs have long been used to
bons. The samples should be representative of the infer not only the presence, but the depositional envi-
interval from which they are chosen, with three to four ronment of sand bodies and thereby provide an indirect
samples being selected per metre. Where possible, sam- estimate ofareal extent. The gamma ray log will in most
pling intervals and sizes should be uniform in order cases reflect lithology better than the spontaneous
to minimize statistical errors. In certain intervals, potential log, particularly where high hydrocarbon satu-
plug samples may be taken rather than full diameter ration exists. Acoustic logs can give clues to the presence
samples, but the latter type of sampling should be used of unconformities and faulting and may be an early
in heterogeneous reservoirs such as those that are waming that more than one reservoir unit is present.
fractured, conglomeratic, or vuggy. Resistivity logs are often helpful in qualitatively assess-
Core gamma logs are used in the core analysis ing vertical grain size variations. The recent introduction
laboratory to aid in correlation of core depths with log of formation imaging technology, which presents
depths and to determine the precise location of missing either an acoustic or an electrical image of the rock

50


ESTIMATION OF VOLUMES OF HYDROCARBONS IN PLACE

GENETIC SAND UNITS


Cut and Fill Offlap Fillln Cut and Onlap
I i i
Alluvial Alluvial-Deltaic Distributary Delta-Marine Barrier Transgression
Point Bar Point Bar Channel Fill Fringe Bar on
Unconformity

[ CC L[
Slightly
Serrate
Smooth
Bell
Smooth
Cylinder
Slightly
Serrate
Smooth
Cylinder
~ Serrate
Funnel
\
Serrate
Funnel
~II~
Thin
and
Bell Bell Resistive
Thick 20-150ft. 10-150ft. 10 - 300ft. 10-100ft. 20-75ft. 5-20ft.
Form Linear; m~ Linear Linear Blanket Linear Blanket
be very wi e
Trend Parallelto Parallel to Parallel to Parallelto
depositional depositional deroSitiona, slope, shoreline
slope slope bu variable

AMPLIFIED SAND UNITS


Cut and Fill Offlap Fill-In Fill-In
i
Point Bar Buildup Delta-Marine Barrier Bar Submarine Canyon Buildup of
Alluvial Plain or Fringe Buildup BUildup Graded Beds
Valley Buildup

(Smooth Bell
Slightly Serrate
Bell
~ Multiple
Serrate
Funnel
c: Multiple
Smooth
Funnel
Smooth Cylinder
Slightly Serrate
Cylinder
Smooth Cylinder
Slightly Serrate
Cylinder
Thick 5 M 1000 ft. 50 - 300 ft. 50-tOOOft. 50 - 500 ft. 30 - 300 ft.
Form Linear to Blanket Linear, butmay Fan Linearto blanket
blanket be very wide
Trend Parallel to Parallel to Normalto Parallelto axis
depositlonal shoreline shoreline; normal of basin
slope orparallel toaxis
ofbasin
HYBRID SAND UNITS
Systematic
I
Progradation of Alluvial Serrate Trahsgression
Over Delta-Marine Fringe Over Della

Serrate Funnel
WithThin
Resistive Streak
Blanket

Smooth BellOn
Serrate Funnel
Blanket
Source: After Shell Development Company, 1970.

Figure 5.2-5 Sand Unit Shape Diagram

51

3
DETERMINATION OFOIL AND GAS RESERVES

surrounding the borehole, shows great promise in between the various tools and how these differences
assisting both the geologist and the reservoir analyst. relate to geological variations will result in the analyst
Image data is particularly helpful in defining the areal being better able to understand and evaluate the
extent of the pay zone before pressure transient data reservoir.
becomes available. In summary, the patient analyst has
many tools available in the search for clues to the char- References
acter of reservoir heterogeneity. Every avenue must be Amaefule, J.O., Kersey, D.G., Marschall, D.M.,
explored at this early stage to reduce the uncertainty Powell, J.D., Valencia, L.E., and Keelan, D.K.
regarding the most critical parameter in the volumetric 1988. "Reservoir Description: A Practical
equation: drainage area. Synergistic Engineering and Geological
Tool Resolution Approach Based on Analysis of Core Data."
Paper presented at SPE, Houston, TX, Oct. 1988,
Many types of logging tools are utilized in the SPE 18167.
determination of reservoir parameters and net pay. The
Computalog Gearhart Ltd. 1990. "The Selective
vertical resolution of each tool is dependent upon the
Formation Tester." Calgary, AB.
requirements ofthe particular measurement. The deeper
measuring tools, designed to overcome or minimize the Schlumberger of Canada. 1985. Open Hole Log
effect of the flushed zone, are limited in their vertical Interpretation. Course notes, Calgary, AB.
resolution. Conversely, tools that are designed for Shell Development Company. 1970. Reservoir
shallow measurements often have superior vertical reso- Geology ofSand Bodies. Houston, TX.
lution. Knowledge of the limitations and differences

52
ESTIMATION OF VOLUMES OFHYDROCARBONS INPLACE

5.3 PERMEABILITY through, and a pressure drop across, a sample of known


length and cross-sectional area, for a fluid of known
5.3.1 Introduction
viscosity. This data is then analyzed by means of
Permeability does not appear in the volumetric 0'Arcy's Law. In theory, the nature of the fluid should
equation, but it is difficult to have any meaningful dis- not be important; however, in practice, the nature ofthe
cussion about the concept of volumetrics without fluid is very important if the rock and fluid interact.
addressing this key attribute of all commercial hydro-
The measurement methods for permeability (American
carbon reservoirs. Permeability is a measure of how
Petroleum Institute, 1952), which are currently under
easily a single fluid (gas or liquid) will flow through the
review, may be divided into classes based on the sample
connected pore spaces when a pressure gradient is ap-
type (plug or full diameter core), the fluid used (gas or
plied. The permeability, k, of a reservoir rock is related
liquid), and the technique (steady or unsteady state con-
to the volumetric flow rate, Q, through the rock by means
ditions). The sample type controls the amount and
of'D'Arcy's Law:
quality of information that can be obtained. For a plug,
only a unidirectional permeability can be measured,
k LlP
Q=-A- (I) while for a full diameter sample, the vertical permeabil-
11 LlL ity plus the permeability in any horizontal direction can
be determined. Although gas permeabilities are the
where Q = volumetric flow rate (mLls) simplest ones to obtain, they suffer from two major
k = air permeability (mO) laboratory problems that are only occasionally encoun-
11 = fluid viscosity (cp) tered in the field: slippage flow (Klinkenberg effect)
A = cross-sectional area (cm-) and inertial (Forcheimer) effects. These problems, al-
t>P = pressure differential (atmospheres/em) though theoretically possible, are rarely observed when
t>L = unit length (em) liquid permeabilities are being measured. Steady and
This permeability is more properly termed specific (or unsteady state techniques may be used for both types of
absolute) permeability: the permeability of a reservoir samples and both types of fluids.
to a fluid when the fluid fills 100 percent of the pore The gas permeability ofwhole core samples is typically
space. determined and reported in three directions: one verti-
Specific permeability is not usually directly applicable cal and two horizontal. The two horizontal directions
to petroleum reservoirs. Essentially all reservoirs, are at 90 to each other, but otherwise are not usually
whether they produce oil or gas, contain at least two oriented in any particular direction. However, ifthe core
components: hydrocarbon and water. Calculations was oriented when it was originally cut, the horizontal
relating to reservoir conditions require effective perme- permeabilities can be related to actual directions in the
ability: the permeability to the fluid of interest at reservoir.
the conditions of interest. Effective permeability may Liquid permeability may be measured using the
replace specific permeability in Equation (I) when the principles ofgas permeability, but the fluid used is brine
conditions are specified under which the permeability or oil instead of gas. Except for possible fluid-rock
applies. The main "condition" in this regard is the fluid interactions, unsteady state liquid permeability measure-
saturation. For this reason, there is yet another perme- ments on plugs do not encounter any major problems
ability measure termed relative permeability: the that would affect reservoir applications.
effective permeability at the fluid saturation of interest Test procedures are available to evaluate fluid-rock
divided by the specific permeability. Relative perme- interactions. These tests involve measuring the perme-
ability is mainly a function of fluid saturation, but also ability of a rock as a function of time (investigation of
depends to varying degrees on other parameters such clay swelling) or as a function of flow rate (investiga-
as saturation history, temperature, pore pressure, tion of"fines" migration). The degree to which the clays,
overburden pressure, and interfacial tension. Permeabil- (most commonly smectite) in a sample have adsorbed
ity is interpreted from well test data or logs, or is directly water can significantly change the size of pore throats,
measured on core samples in the laboratory. and hence the value of permeability. Even when clays
5.3.2 Permeability from Core do not swell, they may contribute to fines migration.
Mineral debris may become detached from the pore
All laboratory methods for determining permeability rely
walls and entrained in the moving fluids above a
on a measurement or an interpretation of a flow rate

53
--
DETERMINATION OFOILANDGAS RESERVES

certain critical velocity. These particles are then carried There are currently no industry standard methods for
along with the flow until they come to pore throats determining relative permeability, and much research
through which they cannot pass. The particles lodge in is ongoing, but there are two basic methods of obtain-
the pore throats, accumulate, block the throats, and ing relative permeability data: steady state and unsteady
thereby decrease the permeability. state. For the steady state method and a two-fluid sys-
Fines migration and clay swelling behaviours are tem, the two phases are injected at a certain volumetric
encountered during liquid permeability testing. In gas ratio until both the pressure drop across the core and the
permeability tests, neither phenomenon is normally composition of the effluent stabilize. The saturations of
observed. However, if clays have been dehydrated dur- the two fluids in the core are then determined. If this
ing the cleaning of hydrocarbons from the pore system, experiment is conducted at various volumetric flow ra-
significant changes in gas permeability may result as tios, a relative permeability vs. saturation curve may be
the test progresses. derived. This method of testing is generally too time-
consuming and expensive. to be practical for many
The advantages of the steady-state plug liquid
commercial reservoir engineering purposes.
permeameter (the apparatus used for permeability
measurement) are that the data interpretation is straight- The unsteady state method is based on interpreting an
forward and liquid permeabilities are more applicable immiscible displacement process. For a two-phase sys-
to reservoir calculations than gas permeabilities. How- tem, a core either in the native state (preserved) or
ever, the apparatus is complicated and relatively restored to the saturation conditions that exist in the res-
expensive and, consequently, the procedure is more ervoir is flooded with one of the phases. Typically the
difficult than in the case of the gas permeameter. flood phase is water or gas since in the reservoir one or
Measurements of liquid permeabilities on whole-core the other ofthese phases usually displaces oil. The flood
samples are less common because of even higher costs. process to obtain relative permeability data is interpreted
by means of a theoretical model or else by computer
5.3.3 Relative Permeability simulation.
Measurement It is sometimes claimed that the steady state and
Although the concept of relative permeability is very unsteady state methods yield the same values of rela-
simple, the measurement and interpretation of relative tive permeabilities. Although undoubtedly true under
permeability vs. saturation curves are not. There is evi- some circumstances, this statement is not generally true.
dence that relative permeability is a function of many For most cases, relative permeability is known to be a
more parameters than fluid saturation. Temperature, function of saturation history. Because the history of
flow velocity, saturation history, wettability changes and the core is completely different in the two cases, it is
the mechanical and chemical behaviour of the matrix reasonable to expect a difference in the resultant rela-
material may play roles in changing the functional de- tive permeabilities. The unsteady state test would seem
pendence ofrelative permeability on saturation. The best to be the more physically realistic in the context of the
defined of these secondary dependencies is the varia- usual reservoir processes, because all such processes
tion of relative permeability with saturation history; involve one phase displacing another.
relative permeability curves show hysteresis between
drainage processes (wetting phase decreasing) and References
imbibition processes (wetting phase increasing). American Petroleum Institute. 1952. "Recommended
Practice for Determining Permeability of Porous
Media." API RP 27 (3rd ed.), Dallas, TX.

54


ESTIMATION OFVOLUMES OFHYDROCARBONS INPLACE

5.4 POROSITY into whatever places they will fit and as the constituent
spheres become irregular or nonrounded. The porosity
5.4.1 Introduction ofrocks, therefore, decreases as the variation in particle
Porosity is the fraction ofthe reservoir bulk volume that size and shape increases. The porosity of competent
is filled with fluid or nonmineral matter-in other words, rocks is also reduced as the amount of cementing mater-
the "storage capacity" of the rock. ial in the matrix increases, since the cementing material
While various methods for determining porosity by core tends to bridge the contacting surfaces of mineral
and log analysis are described in Section 5.2.2, an un- particles and line the pore surfaces.
derstanding ofthe many ways pores may be distributed In addition to "primary" porosity created by the inter-
in reservoir rocks is necessary to fully appreciate the granular spaces in most clastic rocks and some uniformly
concept of porosity. Figure 5 A-I illustrates what is called deposited carbonates such as oolites, "secondary"
"cubic packing" of spheres and is one example of the porosity can result from vugs and fractures that are gen-
packing of spherical sand grains. erally created after deposition. Vugs are those pore
spaces that are larger than would be expected from the
normal fitting together of the grains that compose the
rock framework. They may originate in many ways,
and the type of vug implies some features of its geom-
etry and interconnection. Vugs may vary from tubes or
planes that traverse the matrix to vesicles isolated from
each other. Fractures and fracture porosity result from
earth movements that create joints and faults through
which fluids may move. Although fractures may
only contribute up to I or 2 percent porosity to a res-
ervoir, they will have a significant effect on reservoir
permeability.
Hydrocarbons have been produced commercially from
rocks with porosities as high as 50 percent. Fractured
carbonates, such as those in the Foothills belt of west-
ern Canada, are prolific, although matrix porosity may
be as low as 1.5percent. Some nonproductive rocks also
have high porosities. Clays and shales and certain chalky
carbonates may have fractional fluid volumes or
microporosity greater than 40 percent; yet these rocks
are seldom productive. Porosity, therefore, cannot be
considered the sole criterion for the determination of
reservoir productivity.
5.4.2 Sources and Acquisition of Data
Core Analysis
Porosity, .p =
l
L' - (Lid)' (ltd' /6 0.4764 (1) Core analysis has been called the cornerstone upon
L'
which formation evaluation rests, as it provides the only
Figure 5.4-1 Porosity of Cubic-Packed Spheres directly quantifiable measurement of fundamental
reservoir parameters. Measurements are made on full
Even though porosity is independent of the size of the
diameter and plug samples obtained from conventional
spheres, the porosity of a uniform sphere system can
coring devices, and on plug samples obtained by rotary
vary from over 25 percent to nearly 48 percent depend-
or conventional sidewall coring tools.
ing upon the packing geometry. Ifpart ofthe pore space
of the model is filled with mineral particles of smaller The appropriate procedures are described in the
size than the spheres, porosity is decreased. The poros- Recommended Practice for Core Analysis Procedure
ity continues to decline as ever smaller particles are put (American Petroleum Institute, 1960). An overview of
the most commonly used methods follows.

55

m _
DETERMINATION OF OIL AND GASRESERVES

Porosity measurements are made after a sample has been I. Clean liquids from the rock samples.
selected and cut to form a right cylinder, and the hydro- 2. Measure the mass of each cleaned sample (dry
carbons have been removed. The method of cleaning mass).
and subsequent drying can have an effect on the mea-
3. Determine the volume of each sample (bulk
surements. Samples are normally cleaned in a vapour
volume).
phase unit or in a Dean Stark apparatus using toluene
as a solvent. For tight, competent samples, a pressure 4. Measure the volume of the open space in each
core cleaner may be used. The samples are then dried in sample (pore volume) or the volume of the solid in
an oven to remove the residual toluene. If the samples each sample (grain volume).
contain significant amounts ofclays, the samples should The remaining properties may be calculated from the
be humidity (45 percent) dried or dried in a low tem- measured values of dry mass and any two of the three
perature oven to minimize dehydration. Excessive volumes (bulk, pore or grain).
dehydration results in porosity values that are too high. Methods for determining porosity are oftwo basic types:
A group of properties, including pore volume, those that yield porosity directly, and those that yield
porosity, bulk volume, bulk density, grain volume, and values for grain volume, pore volume or bulk volume
grain density, are generally determined in the labora- independently. Several analytical methods may be em-
tory by means of a single test procedure. Typically, the ployed in the laboratory, as shown in Table 5.4-1. The
steps in this procedure are as follows: following are the most commonly recommended ofthese
methods:

Table 5.4-' Comparison of Techniques of Determining Porosity

Measured Method Calculated Accuracy Need for Need Sample Sensitivity Sensitivity
Property Precision Measurement of for Size to Surface to
Noneffective Cleaning Vugs Calibration
Pore Space

Porosity Summation Poor Fair No No Moderate No High


of Fluids O.69% 1.0%

Direct Good Good - Yes Any - Low


Grain O.OI cc O.OI cc
Volume Gas Good Good - Yes Any - High
Expansion O.02 cc O.02 cc

Steeping Good Good No Yes Any Yes Low


O.OI4 cc O.05 cc
Pore
Volume Gas Good Good No Yes Any No High
Expansion O.OI7 cc O.05 cc

Steeping Good Good - Yes Any Yes Low


O.014 cc O.05 cc
Mercury Good Good - Yes Any Yes Low
Bulk Archimedes O.OI4 cc O.05 cc
Volume Bulk
Volume
Caliper Good Fair - No Any No Low
O.015 cc O.OI5 cc
Source: Geotechnical Resources Ltd., 1991.

56
ESTIMATION OFVOLUMES OFHYDROCARBONS INPLACE

Gas Expansion Method. This is used for determining Except in the presence of gas, the difference between
grain volume; it is also known as helium porosimetry apparent density, Pa, read by the tool and true bulk
and the Boyle's Law method. density, Ph' is trivial.
Mercury Archimedes Method. This method, used to Acoustic logging tools employ one or more transmitters
determine bulk volumes, is based on the fact that a that emit a sound pulse and receivers that record the
nonwetting fluid will not spontaneously invade a sample. pulse as it passes them. The acoustic log represents a
Caliper Method. This method is used to determine bulk recording ofthe time required for a compressional wave
volume by measuring the length and diameter of a right to traverse one metre of formation. This interval transit
cylinder sample. time is the reciprocal of the velocity of the wave.
Summation-of-Fluids Method. This method is used Interval transit time, <it, is dependent on lithology and
for quick determination of the porosity of uncleaned porosity, <1>, as illustrated by Equation (4):
sa~ples.

Log Analysis (4)

Porosity is also obtained from a variety of downhole


measuring devices where tool response is a function of
where <it = interval transit time (us/m)
<itma = transit time in the matrix (us/rn)
the formation porosity, the fluid in the pore space, and
the matrix properties. When the fluid and matrix end
<itr = transit time in the fluid (us/m)
points are known or can be determined accurately, tool Neutron logs respond primarily to the amount of
response can often be reliably related to porosity. hydrogen in the formation. In clean formations with
All three logging devices (acoustic, density, neutron) pores filled by water or oil, the neutron log indicates
respond to the characteristics of the reservoir immedi- the amount of liquid-filled porosity present. Rock has
ately adjacent to the borehole. The depth ofinvestigation essentially negligible hydrogen content and therefore
is shallow (only a few inches on average) and usually does not contribute to the porosity response.
completely within the flushed zone created by invasion In the operation of the neutron log, high-energy fast
of drilling mud filtrate from the wellbore. neutrons are emitted continuously from a radioactive
At present, the density log is the primary porosity log source in the sonde or tool. These neutrons collide with
for most reservoir engineering applications. In opera- formation nuclei in a billiard ball fashion and at each
tion, a radioactive source applied to the borehole wall collision lose some energy. Within a few microseconds,
emits medium energy gamma rays into the rock. As these the neutrons have been slowed down from initial ener-
gamma rays collide with the electrons in the formation, gies of several million electron volts (eV) to thermal
they lose energy, but continue to travel and are counted velocities around 2.5 eV and proceed to diffuse ran-
as an indication of formation density. Density tool re- domly until captured by the nuclei of atoms such as
sponse depends on the electron density which, in tum, chlorine, hydrogen or silicon.
depends on the density of the rock matrix, the forma- The capturing nucleus then becomes intensely excited,
tion porosity and the density, of the fluids filling the emitting a high energy gamma ray of capture. Depend-
pores. For a clean formation of known matrix density, ing on the type oftool, either the capture gamma rays or
formation bulk density, Ph' is given by Equation (2): the neutrons themselves are counted by a detector in
the sonde. The counting rate at the detector is inversely
(2) proportional to the hydrogen concentration. Therefore,
low count rates infer high porosity and vice versa, and
where Ph = formation bulk density (g/cm") this relationship will generally hold true except where
Pr = fluid density (g/cm") gas is present in the region of investigation of the tool.
<I> = porosity (fraction)
Pma= matrix density (g/cm") Industry Databases
Porosity, <1>, is therefore given by Equation (3): Except in rank wildcat environments, the reservoir
analyst should be aware that an important source of
<I> = Pm, - Pb reliable data exists in those wells that have already been
(3) logged or cored in the vicinity ofthe study well or area.
Pm, - P,
Many governments, as part of the management of

57

$
-
DETERMINAnON OF OIL AND GASRESERVES

nonrenewable resources, require that data recovered 2.54 g/cm'' produces porosity values ranging from
during the drilling and completion of a well be submit- 6.6 percent for sandstone to 17.5 percent for a dolomite
ted to the managing agency. In Alberta, for example, all matrix.
activity is reported to the Energy Resources Conserva- Because sound travels more slowly in a fluid-filled pore
tion Board (ERCB), which maintains a core and cuttings than in solid rock, for each rock type a unique relation-
storage and examination facility as well as copies of all ship exists that relates the measured transit time to
data derived from the wells (logs, core analyses, special porosity. The industry has adopted the Wylie Time-
core analyses, well tests, and production histories). The Average Equation as the standard for computing poros-
ERCB also maintains a comprehensive database com- ity from acoustic logs in clean consolidated formations
posed of all key reserves criteria for the oil and gas pools with uniformly distributed small pores. Figure 5.4-6
in the province. demonstrates this porosity vs, transit time relationship.
5.4.3 Analysis of Data For example, a value of216.5 us/m (66 ils/ft) produces
three different values for porosity depending on the
Statistical Techniques for Core Data nature of the matrix mineral.
Porosity values for each sampled interval, along with Neutron log porosity readings are computed and
related permeability and fluid saturation data are tabu- recorded directly on the log. These logs record porosity
lated in a core analysis report (Figure 5.4-2). in linear units for a particular lithology. An internal pro-
Typically, the reservoir analyst will group core data gram automatically provides corrections for the varying
measurements into beds or layers that closely approxi- effects of mud weight, salinity, temperature and hole
mate the stratification evident on the open-hole logs. size variations. Once the appropriate lithology has been
The interpretation ofthis data is aided by cross-plots of determined, porosity can be read directly from the
horizontal permeability vs. porosity (Figure 5.4-3). By service company chart as illustrated in Figure 5.4-7.
comparing core porosities to individual log response, Cross-plotting techniques have evolved because use of
the reservoir analyst can more accurately calibrate the a single tool to determine porosity is valid only where
open hole logs over the uncored portion of the interval the lithology is known to consist of a single mineral
of interest. that is clean and water-filled. In nature, very complex
Great care must be exercised in the use of core porosity mineral assemblages are the norm. Here, even the na-
data because many factors can affect the representative- ture ofthe pore structure itself can affect tool response.
ness of this data. In reviewing core analysis reports, the Under these circumstances, data from two or more
reservoir analyst should ensure that a summary sheet porosity devices is needed to resolve the response to
describing all core retrieval and analysis procedures is differing matrix minerals to the presence of gas or light
included (Figure 5.4-4). this information provides the oils, and to the pore geometry. By far the most univer-
best basis for assessing the quality of core data. sally accepted and utilized ofthese is the neutron-density
cross-plot.
Porosity from Logs Today it is almost standard practice to run the neutron
Anyone or, more frequently, a combination of all three and density logs in tandem or combination and present
conventional porosity devices are typically run when a porosity from both logs on a compatible porosity scale.
well has reached total depth or when a protective inter- This overlay presentation provides the experienced
mediate casing string is to be set prior to drilling deeper. petrophysical analyst with an additional qualitative in-
The science and art of interpreting these logs for terpretation of the nature of the porosity and the host
lithology and can aid in the detection of gas-bearing
porosity and fluid saturation is embodied in the term
petrophysics. Petrophysics seeks to express the physi- zones in the wellbore.
cal and chemical properties of rocks as they pertain to In Figure 5.4-8, a reading of 21 percent limestone
the evaluation of hydrocarbon-bearing layers. Each log porosity from the neutron log is cross-plotted against a
has its own unique application. 15 percent limestone porosity from the density log, de-
fining a point, P, lying between the limestone and
Figure 5.4-5 illustrates the method used for computing
dolomite curves. If the lithology is known to be a mix-
porosity from a density log for a clean formation
ture ofthese two minerals, it is appropriate to proportion
of known matrix density, Pm.' containing a fluid
the distance on a line connecting equal porosity values
of average density, Pr. The lithology dependence ofthis
on both curves and assume that it represents the
tool is evident in the fact that a log reading of

58

=
"TI m
<0' en
<: CORE ANALYSIS REPORT --<
~ ~

'"
'"
:.,.
Sample Depth Thick- Sample Sample Permeability Porosity Saturation Grain Remarks* --<
5
, Number ness Depth Length kmax k". Oil H,O Density z
k"".
'" (m) (m) (m) (m) (mD) (mD) (mD) (%) (%) (%) (kg/m' ) 0
"T1
--i <
-c BELLY RIVER FORMAnON 0
r-
"C
(j' CORE # I 1023.00 m - 1041.00 m RECOVERY/CUT: 17.85 m/ 18.00 m c
Ol
s:m
1023.00-1025.41 2.41 sh en
o 1025.41-1025.60 0.19 1025.43 0.13 82.94 78.49 8.59 20.8 12.6 11.9 0
0
~
I 2683 FD "T1
1025.60-1025.80 0.20 1025.67 0.12 9.53 8.57 1.89 13.3 10.4 35.8 2668 FD :I:
'=:J"

2
3 1025.80-1026.42 0.62 1026.14 0.13 5.12 4.82 3.16 18.0 14.2 35.4 2675 FD
-<
0
:0
Ol
4 1026.42-1027.32 0.90 1026.60 0.14 0.12 0.11 <0.01 10.6 TR 68.4 2677 FD 0
-<
IJ)
n

:0
IJ) OJ
::3J 0
Z
'"0
"C
en
Z
....
~
-e
r-

10 1029.38-1029.63 0.25 1029.52 0.13 57.52 56.57 45.97 19.7 11.6 31.4 2643 FD ()
m
11 1029.63-1030.07 0.44 1029.71 0.14 88.48 84.96 64 .29 19.9 8.4 24.8 2640 FD
12 1030.07-1030.47 0.40 1030.12 0.13 24.47 23.38 17.80 23.4 9.3 25.2 2646 FD
13 1030.47-1030.75 0.28 1030.55 0.12 25.68 25.23 7.63 19.4 11.9 35.0 2647 FD
14 1030.75-1031.18 0.43 1030.80 0.15 84.63 74.86 3.04 16.3 8.2 39.6 2650 FD
1031.18-1031.39 0
1031.39-1031. 7
103 1.73~ 1032.00
1032.00-1032.28
Hl32.28-1032.60
20 1032.60-1032.81 0.21 1032.67 0.12 12.50 12.16 3.78 19.6 13.9 33.0 2661 FD
21 1032.81-1033.64 0.83 1033.21 0.14 0.38 0.32 0.Q3 18.1 TR 20.3 2682 FD
22 1033.64-1034.66 1.02 1034.32 0.15 0.55 0.53 0.22 18.4 TR 30.9 2682 FD
1034.66-1035.61 0.95 calc ss
23 1035.61-1035.80 0.19 1035. 66 0.09 3.44 3.38 1.30 20.2 TR 46.6 2668 FD

calc ss
MISSING

Source: PanCanadian Petroleum Ltd., PCP Ferrybank 6-23-43-28W4. Date: Nov. 17, 1987, File: 87-GC-422.
* FD = full diameter, P = plugged sample, sh ~ shale, calc ss ~ calcareous sandstone.
** Plug permeability-sample not suitable for full diameter measurement.
v.
-c
DETERMINATION OF OIL ANDGASRESERVES

Formation: Belly River Equation: log (kh) = -2.7496 + 0.2128 <il


Depth: 1025.41 m to 1037.12 m Correlation Coefficient: 0.5998
1000
~
/
/
/
/
I- /
...+,./
~

c
100
i=
~
.+. . +~
/
.. I- +;1"
>- +
=
:.,a 10
/
'" +
t / T
...
'E"
/

~ I- /
/
...+
...
'"
a. I- /
/
...
iii
~
~
/
c /

~
0 /
N /
.;: /
0 I-
J:
.1
/
/
...
/
/

~ /
/

I- /
/
, ,
.01
o 6 12 18 24 30
Porosity (%j

Source: PanCanadian Petroleum Ltd., PCP Ferrybank 6-23-43-28W4.

Figure 5.4-3 Porosity vs. Horizontal Permeability

Core Intervals Recovery/Cut Formation No. of Boxes


1023.00-1041.00 m 17.85/18.00 m Belly River 16
Coringequipment Diamond
Coringdiameter 101 mm
Core fluid Water-base mud
CLEANING
Solvent Toluene
Extraction equipment Vapour phase
Extraction time 22 days
Dryingequipment Convection oven
Drying time 24 hours
Dryingtemperature 150'C
ANALYSIS
Pore volume measured by Boyle's Law heliumporosimeter
Grain volume measured by Boyle's Law heliumporosimeter
Bulk volume measured by Mercury/caliper
Fluid saturation measured by Retort
Source: PanCanadian Petroleum Ltd., PCP Ferrybank 6-23-43-28W4.
Notes: Plugs are I inchdiameterunlessotherwise noted.

Figure 5.4-4 Core Analysis Report: Analytical Summary Sheet

60
40

$ = Pm.' P.
Pm.' P,
30

~ Dolomite
~
-e-
.i- 20
'w 17.5%
e
e Limestone Pma = 2.71 g/cm
3
10.0%
10 ~-----------
3
Sandstone Pm. =2.65 g/cm
3
P, =1.0g/cm
O+-L---'C-.L--'--,-- .- -,- --,
2.9 2.7 2.5 2.3 2.1 1.9
3
Bulk Density, Pb (g/cm )

Figure 5.4-5 Porosity from Formation Density Log

50

$=
40

Dolomite .6.tma = 143 }.ts/m ---,,r/


rf 30 Limestone ./ltma = 156 jls/m
.".
;6
.~

~ 20
15.4%
~----------------------
~--------------------
13.0%
-
10 Sandstone Alma = 182 us/rn
I>t, =161511s/m
7.7%

O.J----L~-..L-_,_~-----~------~
100 200 300 400
IntervalTransit Time, I>t (lls/m)

Figure 5.4-6 Porosity from Sonic Log

61
DETERMINATION OF OIL AND GAS RESERVES

40

30 Sandstone

12.6%
-----------------------
10.0% Dolomite
10

O+-----'~:::..---_+---_r---___,----
o 10 20 30 40
Neutron Index (Apparent Limestone Porosity)

Figure 5.4-7 Neutron Porosity Equivalence Curves

volumetric proportion of the two minerals. Therefore,


40
the interval represented at P would be composed of 40
percent dolomite and 60 percent limestone and have a Limestone 30
porosity of 18 percent. 30
25
While knowledge of the matrix constituents is always Sandstone ~
important, an error in choosing or assuming the matrix 20
pair does not have a great impact on the porosity deter- ~ 20
mined except in very low porosity carbonates. This
C 25

feature ofthe neutron-density cross-plot, combined with


its inherent gas identification properties, makes it the
"
<::
o
00 10
Q)

most popular technique. E


2- o
.... 0 10
Correlation of Log and Core Porosity
Many reservoir analysts prefer to use core analyses in 5 ' " Dolomite
reservoir studies, particularly where equity determina- -10
tion is a key issue. While computer-processed suites of
log data may represent the only continuous source of f~AnhYdrite
computed reservoir parameters, it has long been recog- -20 + - - - - , - - - , - - - - - ; r - - - - - , - - - ;
nized that log-derived values are not absolute numbers. o 10 20 30 40
In core-log matching exercises, the objective is to stan- <I> CNL (Limestone) (%)
dardize the output results in such a way that differences CNL = compensated neutron log
in results from well to well represent relative changes
in reservoir quality. Therefore, it is common prac- Figure 5.4-8 Porosity and Lithology
tice to use the core data as the reference point and Determination from
fit log analysis data to it. A paper by Hamilton and Neutron-Density Log
Stewart (1983) outlines a step-by-step procedure for
conducting this type of analysis.

62
ESTIMATIONOF VOLUMES OFHYDROCARBONS IN PLACE

5.4.4 Factors Affecting Data Quality contribute to reductions of porosity with increasing
depth.
Preservation of In Situ Conditions
There is strong evidence of a continuous reduction in
The quality ofthe results obtained from core analysis is porosity with increasing pressure differential applied
directly related to the quality ofthe core when it reaches between the interior and exterior of a sample. The ana-
the laboratory. Therefore, in cutting and retrieving the lyst should be aware that in situ porosity will be lower
core, precautions must be taken to preserve, as much as than that measured under atmospheric conditions in the
possible, the conditions that exist downhole in the res- laboratory. Pore volume compressibility tests may be
ervoir. The cutting and retrieval ofcore to surface results conducted to determine the appropriate reduction
in the removal of overburden pressure, the introduction factor for the reservoir under study, and this type of
of dril1ingfines, and some modification ofthe clays, al1 measurement is now virtual1y routine.
of which can affect porosity measurements.
Reservoir Heterogeneity
Shale Content
The results of sampling with wireline logging tools or
The most important problem that has eluded solution core samples can be misrepresentative of the reservoir.
since it was recognized by early logging over 50 years The actual volume of reservoir sampled even with well
ago is that of shaly sands. logs is insignificant in comparison to the unsampled
The presence of shale or clay minerals in the interstices reservoir volume and is never statistical1y random.
of sedimentary rocks affects log analysis by moving the Certain geologic environments such as marine sands can
resistivity of the porous and permeable zones toward be predictable over distances in the order ofkilometres,
the normal shale resistivity on the log. Shales also im- while carbonate reservoirs may vary significantly over
pact porosity measuring devices. With densities between distances in the order of centimetres. The effects ofres-
2.4 and 2.7 g/cm-, shales can show up on density logs ervoir heterogeneity on the quality ofthe data being used
as having nil to moderate porosity. On acoustic and neu- to characterize the reservoir can be minimized only by
tron logs, shales may appear to have moderate to high careful geological investigation.
porosity. In extreme cases the effects on resistivity and With respect to reservoir heterogeneity, three main
porosity logs can cancel out in the computation of wa- criteria should be considered: sample homogeneity, the
ter saturation. However, ifthey do not cancel, the analyst presence of fractures, and sample size. As a basic rule
may misinterpret or overlook prospective pay zones. The of thumb, the larger the sample, the better it will rep-
amount of shale must therefore be determined to permit resent the range of microscopic variations in the rock.
its contribution to be subtracted from the measured Most reservoir rocks, even those that visually appear to
parameters. be homogeneous, exhibit variations in permeability over
The impact of clays on the results of core analysis is relatively smal1 distances. In highly fractured reservoirs,
equal1y difficult to resolve. The main obstacle encoun- there are real1y two permeabilities of interest: matrix
tered is in distinguishing pore water from nonliquid clay and fracture permeability. To determine the matrix com-
mineral water. In addition to retaining the clay lattice ponent in such reservoirs, plug samples are used because
water, the core analyst must be careful to preserve the al1 fractures must be excluded from the samples. In this
last few molecular layers of adsorbed water on the clay case, the general rule "the bigger the sample, the better
minerals. the sample" does not apply. Fracture permeability should
Figure 5.4-9 illustrates the complexity that the presence be measured on whole core samples. To get representa-
of clay minerals can introduce to the process of tive values, however, the samples should be restressed
porosity determination from either cores or logs. to overburden conditions. The procedures utilized
for fractured reservoirs are also applicable to vuggy
Rock Compressibility carbonate reservoirs.
In the assessment of data quality and reliability, it Measurement Precision and Tool Resolution
must be remembered that most laboratory porosity
determinations are based on information obtained at sur- Anyone who has ever attempted to use wel1 logs and
face conditions. Rocks are elastic media and can be core analysis data to accurately characterize a reservoir
compressed and decompressed when subjected to the knows that even with the wide range of tools available
stress and release of overburden pressure. Mineral one rarely gets the same answer from each tool.
elasticity, grain movement and, final1y, grain failure al1

63

r+
DETERMINATION OFOILANDGAS RESERVES

---VC1ay
'I' <I> Effective

I
Petrophysical Qualities <I> Total

<I> Free Fluid


Clay
,, Bound
Water Free Water
Dry : Clay
Clay :, Water
,

~~<I>cor.
(After Overburden Correction)

f--- <I> NML

<I> Density

Log Measurements
1----------- <t> Neutron

V Clay = volumeof clay


<t> Sonic
NML = nuclear magnetic log

Source: Schlumberger, 1988.

Figure 5.4-9 Impact of Clay on Log and Core Measurements

The sources of errors in logs and core analyses are both References
random and systematic and are introduced by the American Petroleum Institute. 1960. "Recommended
implicit limitations imposed on the measuring device Practice for Core Analysis Procedure." API RP
by design considerations. Statistical variation in radio- 40, Dallas, TX.
activity measurements is an example ofa random error;
Geotechnical Resources Ltd. 1991. "Porosity." In The
improper or degrading calibration in a logging tool
Science and Technology of Core Analysis (2nd
or pressure recorder is an example of a systematic or
ed.). Course notes, Calgary, AB.
constant error.
Hamilton, J.M., and Stewart, J.M. 1983. "Thin Bed
By far the most serious source of error is introduced by
Resolution and Other Problems in Matching Log
the unavoidable complexity ofthe reservoir rock. What
and Core Data." SPWLA 24th Annual Logging
is referred to here is any closely spaced variation in petro-
Symposium, Calgary, AB.
physical parameters. When petroleum engineers are
confronted with thinly bedded strata, they must be even Schlumberger. 1988. "Measuring Porosity, Saturation
more aware of the vertical resolution limitations of the and Permeability from Cores: An Appreciation of
measuring device. the Difficulties." The Technical Review," Vol. 36,
No.4, Oct. 1988.

"Material from The Technical Review is printed with the


permission of The Oilfield Review.

64

7
ESTIMATION OF VOLUMES OF HYDROCARBONS INPLACE

5.5 HYDROCARBON SATURATION the mass of oil originally in the sample is calculated by
difference.
5.5.1 Introduction
The sponge corresponding to each sample is similarly
The saturation of a given fluid is defined as the fraction
analyzed in order to obtain the total fluid content of the
of the pore volume occupied by that fluid. This defini-
core.
tion, while simple, provides no insight as to how or
where the fluids are held within the porous network of Oil-Base Coring for Connate Water Saturation
the rock; it merely states that some fraction of the pore
With oil-base core, the core is drilled with lease crude
network contains the given fluid.
or an appropriately designed fluid as a lubricant. The
5.5.2 Saturation Determination From crude will only displace oil and, therefore, it is possible
Core to accurately determine connate water saturations. The
The saturations of hydrocarbons (both liquid and recovered core is kept immersed in this fluid until it is
ready for analysis in the laboratory.
gaseous) and water in petroleum reservoirs are two of
the most important properties of interest to the reser- The recovery of an oil-base core and the successful
voir analyst. However, because these fluids are generally measurement of an average connate water saturation,
mobile, they are not always recovered during conven- Swo' requires balancing the need for accurate water satur-
tional coring operations. Therefore, by the time the core ation data with the realities of conducting a potentially
is analyzed in the laboratory, the fluid saturations do hazardous coring operation with minimal risk and rea-
not necessarily represent those that exist in the reser- sonable expense. Careful consideration must be given
voir. For this reason, fluid saturations measured by core to the selection of the proper coring fluid to preserve
analysis are generally treated as qualitative numbers the native wettability in the core. (Wettability is defined
rather than precise values. With proper precautions, such in Section 5.5.5.)
as drilling with lease crude and using pressurized or To determine a reliable connate water saturation, the
sponge coring techniques, saturation measurements may optimum placement of the core location is, as far as is
be made more accurately. However, these techniques feasible, above the local oil-water contact. Detailed
add considerable expense to the core retrieval. It should knowledge ofreservoir pressure permits maximum over-
be noted that the inaccuracy ofthe measurements is not balance reduction to minimize the stripping of connate
due to the laboratory techniques, but to the difficulty in water during the coring process.
obtaining proper samples. When all elements of the operation are carefully
For accurate estimates ofsaturations in a reservoir, both controlled, laboratory analysis (Dean Stark) on full-
core and geophysical well log data must be used; fur- diameter core samples for connate water saturation com-
thermore, the log data must be interpreted accurately. pares favourably with other methods such as single well
This means that calibration constants for electrical prop- tracer testing and open-hole log evaluation.
erties should be measured on core samples. When proper The economic attraction of such an operation is easily
care is taken, reliable saturation values can be obtained appreciated, considering that reductions in recognized
from logs. water saturation may approach or even exceed 50 per-
More accurate saturation data may be obtained by cent and may result in increases ofas much as 20 percent
using sponge core or oil-base core techniques. With the in the perceived original oil in place. Changes of this
sponge core technique, core is recovered by means of magnitude can impact not only estimated reserves, but
an aluminum inner core barrel that has a sponge lining. also field development plans and production through
Fluids escaping from the core are absorbed by the increased maximum rate limitations.
sponge. Samples are cut from the core and analyzed for
fluid content using the Dean Stark technique. In this Saturation Measurement
process the sample is weighed and placed in the Dean Three general families of techniques are available for
Stark apparatus, and the extraction solvent is boiled and the measurement ofsaturations in rocks: chemical, which
condensed repeatedly. The water-solvent vapour mix- includes retort and distillation methods; electrical, which
ture rises and condenses, with the water collecting in a includes both laboratory and geophysical log methods;
graduated collection tube. Solvent cleans oil out of the and nonintrusive, which includes X-ray and nuclear
sample. The volume of water is measured directly and magnetic resonance. The chemical techniques are

65
DETERMINATION OF Oil AND GASRESERVES

currently the universal choice for routine core analysis ljl = porosity (fraction)
operations, and electrical, for wellbore measurements. m = cementation exponent
The nonintrusive techniques are gaining acceptance S; = water saturation (fraction)
as on- line saturation methods for displacement and n = saturation exponent
enhanced oil recovery studies, but are not generally used As a consequence ofArchie's work, the exponents m=2
to determine routine oil and water saturations and will and n=2, and the coefficient a= I are generally used in
not be discussed further. formation evaluation; "a" is a constant, also used in
Equation (3). However actual values of "a," "rn,' and
Chemical Methods
"n" can be determined in the laboratory for any specific
The procedure for determining fluid saturations by the reservoir,
retort method is based on taking two companion samples. At this time, a recommended procedure does not exist
One is weighed, thoroughly cleaned, and then its for formation factor measurement. Although most
porosity determined (porosity sample); the other is laboratories use custom-built apparatus, all have the
crushed, placed in a retort oven, and heated for analysis same basic principles of operation.
of its oil and water contents. In the distillation method,
The sample is capped with mandrels and placed
the sample is placed in a Dean Stark apparatus with tolu-
inside a pressure containment cell fitted with electri-
ene. As the toluene is heated and condensed, fluids are
cally insulated end caps. The chamber is pressurized
removed from the rock, and the water is captured and
and the sample is then saturated with brine.
measured. Oil values are determined by calculation.
Ifthe tests are to be performed at reservoir temperature,
Generally, the sum ofthe water and oil saturations does
the pressure containment cell is placed in an oven. The
not total one, but is a fraction of the porosity because a
resistivity of the sample is measured and the formation
gas saturation has developed with the depressuring of
factor, F, is calculated using the following equation:
the core sample.
Electrical Methods
(2)
Because brine is electrically conducting, it seems
reasonable to expect the electrical conductivity, or its
inverse, the electrical resistivity, to vary with brine satu- where R, = resistivity of water- saturated formation
ration. This expectation is the basis of the electrical (ohm-m)
method of saturation determination. The ultimate objective offormation factor measurement
During the 1930s, a large number ofworkers performed is to determine the values of "a" and "m" that charac-
tests to determine the relationship between the resistiv- terize a reservoir. For this reason, a suite of samples
ity of rock samples and the brine content. In general, it should be chosen having a range ofporosities that spans
was found that correlations existed, but it was not until the range found in the reservoir. A prerequisite to
the comprehensive work ofArchie (1942) was published obtaining representative values of "a" and "m" is a
that these correlations were placed in their modem con- very careful sample selection procedure.
text. Archie's work was based on GulfCoast sandstones Formation factors and porosities (preferably measured
in the porosity range of 10 to 40 percent, saturated with under stressed conditions) are determined for this suite
brines of salinity between 10 000 mg/L and lOa 000 of samples. The values for all samples tested are then
mg/L of NaCI. The work covered both fully saturated plotted on log- log paper as illustrated in Figure 5.51
and partially saturated samples, and presented the and fitted with an equation of the form:
classical empirical equation still employed today by
log F = log a - m log ljl (3)
petrophysicists and formation evaluation experts:
The determination of the "n" exponent in the Archie
aR" (I) equation (Equation I), is considerably more complicated
R, = ljlms: than formation factor measurement because it necessi-
tates measurement of not only a resistivity, but also a
where R, = true formation resistivity (ohm-m) saturation at each data point. Samples are commonly
a = constant desaturated by one of two methods: centrifuging, or
R,. = formation water resistivity (ohm-m) using a porous diaphragm.

66
ESTIMATION OF VOLUMES OF HYDROCARBONS IN PLACE

50
,
~, ,
-.
'. <,
", <,
'. .
Hard
30 <, 1
y, F = -$'
20 "

~~
<,
<,
~ '.
<,
,
>!i.
g.... ". <,
-: ,
-e- .... :-:. "-
~ 10
Ul
eo SOf!(HUm/ c..,(S"-'"
a.. ". . '" ~ - 1 87 + 0.019
m-.
F = 0.62
$,.1. ".~ $
5
,
~
". <,
'.

F = 0.81
/ . ...., -,
". <,

$' '.
<,
<,
<,
-,
2
<,
<,
<,
<,
<,
<,

1 3
"
10 10' 10
Source: Schlumberger, 1972. Formation Factor, F

Figure 5.5-' Porosity vs. Formation Factor

Once a set of saturation-resistivity data has been where the tubes represent pore throats interconnecting
obtained, the saturation exponent is found by plotting individual pores. For a hydrocarbon accumulation to
this data in log - log format as illustrated in Figure occur, the pore spaces must be continuously interconn-
5.5-2 and fitting the data with an equation of the form: ected and the capillary pressure of a water-filled pore
must be exceeded by the pressure of the encroaching
log I = -n log Sw (4) hydrocarbons. This threshold pressure, also referred to
where I = formation resistivity index as the displacement pressure, determines whether or not
hydrocarbons can accumulate in a pore on the micro-
Capillary Pressure Studies
scopic scale or in a particular geologic structure on the
It is usually accepted that hydrocarbons displace water macro scale. In the case of a cap rock or reservoir seal,
in a reservoir rock during the normal process of accu- it determines the maximum height a hydrocarbon
mulation. Because sedimentary rock is usually deposited column can reach before the seal is breached.
in a water environment, the pore network must have The density differences between the hydrocarbon and
been originally full of water. To gain a better under- water phases results in a force called buoyancy effect,
standing ofpresent fluid distributions, it is necessary to which is the principal motive force causing oil or gas to
understand how hydrocarbons displace water to form migrate upwards through water-saturated rocks in the
the hydrocarbon accumulation in the first place. subsurface.
The pore geometry of sedimentary rocks is frequently
described in terms of the "bundle-of-tubes" concept,

67
DETERMINATION OFOIL ANDGASRESERVES

Company: PanCanadian Petroleum Ltd. Formation: Basal Belly River


Well: PCP Ferrybank 2-23-43-28 Field: Ferrybank
Location: LSD 2-23-43-28W4M Province: Alberta

I \
I ! I
\
R, 1.00
-=--
Ro S~68
1\
\
\
\
10 -. \
\

\-
\
~

~
~ ,\.
~
~
~

10" 1.0
Source: PanCanadian Petroleum ltd. Brine Saturation (fraction)

Figure 5.5-2 Formation Resistivity Index

Opposing this upward force, however, is the capillary the analyst to combine data from many samples to more
pressure of the reservoir which depends on three appropriately model the reservoir under study. Several
factors: methods are available to average capillary pressure
1. Radius of the pore throats of the rock curves. A frequently used method is one developed by
Heseldin (1973) in which he uses a displaced rectangu-
2. Interfacial tension of the two fluids
lar hyperbolic function to relate porosity to bulk volume
3. Wettability of the rock hydrocarbon for varying levels ofpressure and, in tum,
Capillary pressure data is generally obtained from small relates capillary pressure to water saturation for various
core samples which represent a tiny fraction of the res- levels of porosity. This method has been used success-
ervoir. In the laboratory, an air-mercury fluid system is fully in Alberta in the Waterton, Jumping Pound and
often used to represent the reservoir system. Air-brine Virginia Hills fields.
and oil-brine systems are also used. It is essential for

68
T
ESTIMATION OF VOLUMES OFHYDROCARBONS INPLACE

Another method used is one developed by Leverett


(1941). This method employs a correlating function _ (cr cos 0)'/H.
commonly called the "J function," which was originally PCa/ Hg - PC w/0 (6)
(o cos 0)'/w
proposed as a means to convert all capillary pressure
data to a universal curve. However, experience has where PC olllg = air-mercury pressure (kPa)
shown that significant differences in the correlation
PCw10 = water-oil pressure (kPa)
of the J function with water saturation occur from
formation to formation. 3. Calculate PC olllg for any height above the free water
level for the selected rock type.
The prime use ofcapillary pressure curves is to confirm
water saturations in difficult evaluation environments.
Other uses include determination of rock characteris- (cr cos 0)'/H.
Pc,,". = 0.433h (SG w - SG,) (7)
tics such as average pore throat size, pore throat size (o cos 0),/w
distribution and permeability; calculation of depth of
4. From the air-mercury capillary pressure curves
free water level or oil-water contact; and determination
(Figure 5.5-3), read the percentage bulk volume
of the extent of the transition zone. The manipulation
occupied by Hg at that level for the selected rock
ofcapillary pressure curves is fraught with many uncer-
type and convert it to Sw' or read Sw (wetting phase
tainties, and only an experienced reservoir engineer
saturation) directly.
or petrophysicist should attempt such an exercise.
Accurate knowledge ofthe specific gravities ofthe res- For reservoir systems with fluid characteristics similar
ervoir fluids, interfacial tension between fluids and rock, to the laboratory systems, conversion factors are
and rock wettability is required for translating capillary not required. However, if the characteristics differ,
pressure data into equivalent oil-water or gas-water data. adjustments similar to these steps must be taken.
Table 5.5-1 lists commonly used values for wettability, 5.5.3 Saturation Determination From
0, of a water-wet system and interfacial tension, o, in Logs
dynes/em.
All water saturation calculations in theoretically shale-
Table 5.5-1 Wettability and Interfacial Tension free formations assume a homogeneous intergranular
pore system. These determinations are made from re-
System 0 Cos 0 cr a Cos 0 sistivity logs and are based on some form of Archie's
Air-water-solid 0 0
I 72 water saturation equation. As with the computation of
72
Air-mercury-solid 1400 -0.766 480 porosity from the various geophysical logging combi-
-370
Oil-water-solid 00 I 35 nations, the determination of fluid saturation from
35
various resistivity and porosity logs has generated many
When all data has been assembled, the process for unique approaches.
interpreting water saturation in an oil-water system from Nearly all these techniques are derived from the
air-mercury capillary pressure curves is a four-step classical Archie equation, and the results are wholly de-
process: pendent on the accuracy of the basic input parameters:
I. Determine the capillary pressure - height relation- R", F and R,. The analyst usually selects the deep resis-
ship in the reservoir. tivity reading from either the induction or the laterolog
device and after correcting it for environmental, bore-
Pc w/ , = 0.433h (SGw - SG,) (5) hole, bed thickness and invasion effects, adopts it
as true resistivity, R,. Porosity derived from the sonic,
where PC w10 = capillary pressure of the water-
the neutron-density, or some combination of log
oil system (kPa)
and core coverage will be matched with the appropriate
h = height (m)
lithologically dependent porosity-formation factor
SG = specific gravity, relative to water
relationship. Finally, R" will be determined either from
2. Convert the reservoir water-oil pressure system into log calculations, test recovery, or a sample of produced
the laboratory air-mercury pressure system using water from a nearby water-bearing zone in the same
the appropriate rock-fluid values and fluid specific geological formation. In shale-contaminated reservoirs
gravities. and in low porosity complex carbonate rocks, Sw can
only be accurately calculated by employing the most

69

it
-
DETERMINATION OFOIL ANDGASRESERVES

Company: PanCanadian Petroleum Limited Formation: Basal Belly River


Well: PCP Ferrybank 2-23-43-28 Field: Ferrybank
Location: LSD 2-23-43-28W4M Province: Alberta
14 105

Air-Mercury Capillary Air-Mercury Capillary


12 Pressure Curve I- Pressure Curve
10'

10
<?
o,
""x <? 103
8 a.
'"0 ~
:::::.. ~
:::J
~
~'"
:::J
6
'"'"OJ a, 10'
a.
~

\
4

10
I~ r-...
2

o
.2 o
\
.4
r-;
.6 .8 1
1
1 1~ 1~
\ 1~
Wetting Phase Saturation (fraction of pore volume) Bulk Volume Occupied Hg (volume fraction)
Source: PanCanadian Petroleum Ltd.

Figure 5.5-3 Air Brine Capillary Pressure Test

advanced computational routines that in themselves rely 5.5.4 Flow Test Procedures for Gas and
heavily on data support from special core analysis stud- Oil Saturation
ies. The casual analyst is well-advised to seek expert Well test analysis has always held great interest and
advice in these areas because improper selection of in- attraction for drilling and reservoir engineers because it
put parameters could lead to solutions that grossly offers the potential to assess not only the true saturation
misrepresent true reservoir conditions. condition ofthe formation, but also formation transmis-
Figure 5.5-4 represents a flow diagram of a typical sibility. As advances were made in mathematical
petrophysical evaluation based on saturations deter- modelling theory, early field data that was frequently
mined from electrical resistivity relationships. ambiguous became more amenable to resolution. With
The resultant water saturation is the fraction ofthe pore the advent of very sophisticated electronic pressure
volume of the reservoir that is water-filled. That por- gauges, high speed computers and advances in the field
tion not filled with water is assumed to be filled with ofmathematics, a new frontier has opened. Addition of
hydrocarbons. the pressure-time derivative to log-log type curves now
permits the identification of multiple reservoir bound-
aries and heterogeneities such as fractures and layered
formations.

70
,
ESTIMATION OF VOLUMES OFHYDROCARBONS IN PLACE

Rock Formation
Type Fluid Tests
~-------------------------+
k
---------------------+ Permeability
Cores.
1-0-- Sidewall Samples.
Drill Cuttings
---------~
I
I
I
Drilling I
+--- Time
------------+1I Quantitative
I
I
I
I
I ----- Quantitative Under
Natural I Special Circumstances
---- Radiation
I
I
I
I
I
I
I
Induced I
Radiation I
I--

Acoustical
<I>
Porosity -
Velocity
-
---- Spontaneous
Potential Rw
I-- Formation
Water -
Resistivity R.
Produced Water-bearing
Water Formation
Resistivity

Electrical
------------------------+
Resistivity Rt
True
Formation Sw
Resistivity r-- Water
Saturation

Source: After Shell Development Company, 1969,

Figure 5.5-4 Log Interpretation Flow Chart

71

It
DETERMINATION OFOIL AND GAS RESERVES

In designing any test, reservoir engineers integrate as In 1968, continuous measurements of rock CEC in situ
much open-hole logging and geological information as were not possible and, for practical purposes, a Dual
possible. Some of the flow regimes that can be recog- Water Model was proposed as a solution.
nized during a pressure test include infinite acting, In this approach, clay is modelled as consisting of two
pseudo-steady state, and steady state. It is important that parts: bound water and clay minerals, with the clay min-
the test be designed to recognize and capture data from erals assumed to be electrically inert. The Dual Water
all flow regimes. Critical formation properties like per- Model as applied to shaly formations is illustrated in
meability and skin factor can be determined only from Figure 5.5-5.
the infinite acting flow period. Reservoir size and shape
can be deduced from the pseudo-steady state phase, and
Solids Fluids
the steady state phase can give clues to that most-sought-
after parameter: drainage volume. Pressure transient tests
Bound Free Hydro-
can be conducted either in the open hole or in perfor- Matrix Silt Dry Clay
Water Water carbons
. ated casing. The open-hole drillstem test (DST) employs
a valve, packer, and pressure gauge. A more sophisti- Effective
Matrix Shaie
Porosity
cated production logging tool string run in a cased hole
can measure temperature, pressure, fluid density, and Total Porosity
Source: Schiumberger, 1987.
flow rate in addition to gamma ray activity and bore-
hole diameter. In both cases, the goal is the same: to
assess the fluid content and transmissibility of the res- Figure 5.5-5 Dual Water Model
ervoir as well as the extent of the producing formation
away from the wellbore. The analyst determines R. and R.b and inputs them to
any ofa number ofgeneral computer interpretation pro-
5.5.5 Factors Affecting Data Quality
grams for clastic sequences, such as the schematic of a
Presence of Shale or Clay typical process illustrated in Figure 5.5-6. To evaluate a
shaly formation, four parameters must be determined:
Shale- or clay-free environments are rare occurrences
water conductivity, C; (or R.), conductivity of bound
in nature. Shale is, in fact, one of the most common
water, C wb (or R.b)' total porosity, li>, and bound Water
constituents of sedimentary rocks.
saturation, Swb' In practice, a cross-plot of neutron and
Aside from the negative effect on porosity and perme- density logs generates acceptable values of li>,. Any of a
ability, as previously discussed, the unique electrical variety of shale-sensitive measurements, usually the
properties ofthese complex mineral assemblages greatly gamma ray, can be the source of Swb'
influence the determination of fluid saturation.
Most analysts resort to one oftwo techniques to resolve
Presence of Bitumen
water saturation in a shaly sandstone environment. The Bitumen, in either the fluid or solid (pyrobitumen) phase,
Waxman-Smits relationship (Smits and Waxman, 1968) is observed in significant quantities in many reservoirs
attempted to relate the resistivity contribution ofthe shale in western Canada, particularly in the Devonian carbon-
to the cation exchange capacity (CEC) of the shale: ates that account for nearly 70 percent of all oil and 20
percent ofall gas produced. When present, pyrobitumen
. ,
Is; BQ,Sw
-=--+-- (8)
is a major source of uncertainty because of its effects
R, F*R w F* on porosity, permeability, wettability and chemical
adsorption, properties that can have a major impact on
where F* = formation resistivity factor for shaly hydrocarbon recovery processes. On the other hand,
sand bitumen in the liquid phase can be a reserve in itself, as
B = equivalent conductance of clay ex- for example, the 50 x 10' m 3 of resources assigned to
change cations (sodium as a function the Devonian Grosmont Formation ofnorthern Alberta
of C; at 25C (mho ern- meq") and Saskatchewan.
Q, = concentration of clay-exchangeable When a reservoir engineer encounters a reservoir with
cations per unit pore volume (meq either bitumen or pyrobitumen, careful study and analy-
ml,") sis are necessary to adequately gauge the impact that its
presence could have on production and production

72
ESTIMATION OF VOLUMES OF HYDROCARBONS INPLACE

j
I Correlate logs I
j
I Mark permeable beds (SP, ML) I
I
Break beds into zones SP = spontaneous potential
Induction Lateroloo
ML = microlog
<; R'h = resistivity shale
/ P'h = bulk density, shale
Conductive" 2' I Zones" 2' Llt'h = sonic travel time, shale
Resistive " 5' Igr = gamma ray index
I
In shale zones, determine average values for
I $N
Ro
= neutron porosity, shale
= wet resistivityof undisturbed
zone
R'h P,h Llt'h eneutron., Z = shaliness index
I $. = effective porosity
Determine shale volume usingshale scalar Rw = formation water resistivity
Chart 1 and Chart 2 v; = volume, shale
I
Rt = true resistivity
I Start zone analysis
j
I
Read conductivity (or resistivity) and Igr for zone I
I I j
Density One of: density, Cross-plot
neutron, acoustic two logs
P'h = 2,65
Correctfor shaliness
Yes No Llt Chart 3
I P Chart 4
neutron Chart 5

1$ from Chart 41
j
Solve shaly sand equation to get R 0.' Z
(need $., Rw' Vsh' R'h)
i
Solve for Sw
(need Roo, a, Z)
I
Last zone
Yes No

\
The End

Data Required Charts Required


Resistivity-induction, dual induction, laterolog 1. Shale scalar
Gamma ray 2. Relationship for gamma ray vs. percent clay (V'h)
Porosity log(s) - density neutron, acoustic 3,4,5. Acoustic, density, neutron response
Water resistivity

Figure 5.5-6 Shaly Sand Interpretation Process

73

't
-
DETERMINATION OF OIL AND GASRESERVES

strategies. Reservoir rocks with organic-based Wettability


pyrobitumen frequently exhibit strong tendencies to oil
Wettability is defined as the tendency of one fluid to
wetness, resulting not only in abnormally low calcu-
spread on or adhere to a solid surface in the presence of
lated connate water saturation, but also in high effective
other immiscible fluids. Wettability is a major factor
water permeability. And more important to those con-
controlling the location, flow and distribution of fluids
cerned with reserves and estimating ultimate recovery,
in the reservoir. The wettability of originally water-wet
these reservoirs frequently suffer "premature" water
reservoir rock can be altered by the adsorption ofpolar
break-through on waterflood recovery schemes.
compounds or the deposition of organic material. The
Reservoir Heterogeneity wettability of the reservoir can affect the estimation of
in-place hydrocarbon volumes as well as estimates of
As noted in the discussion on the use of capillary hydrocarbon recovery.
pressure curves, each plug represents the characteris-
tics of only the rock type present in that tiny sample. It The estimation of hydrocarbons in place is affected
is imperative, therefore, that the reservoir engineer have because the understanding of fluid saturations, re-
some appreciation ofthe variability that can be encoun- sistivity measurements, capillary pressures, relative
tered within the total reservoir under study. Each discrete permeability and residual saturations is changed when
layer is itself susceptible to subtle changes, both verti- the system varies from being strongly water-wet to
cally and horizontally, that may escape the eye of even strongly oil-wet.
the most careful investigator or lie beyond the depth of Recovery estimates can also be significantly affected
investigation of any borehole logging devices. because the initial and residual saturations, relative
While logs and cores provide data that is useful in permeability, primary, secondary and tertiary recovery
calculating water or hydrocarbon saturation, logs processes are different for the oil-wet and water-wet
represent a moving observation point. This running cases.
average, when compared to the stationary observation References
data point derived from core data, can result in a lack of
Archie, G.E. 1942. "The Electrical Resistivity Log as
conformity between samples of differing geometrical
an Aid in Determining Some Reservoir
character. It is important, therefore, that common sense
Characteristics." Trans., AIME, No. 146,
be employed when comparing saturation data derived
pp.54-62.
from differing measurements and differing rock vol-
umes. Good correlation between widely diverse Heseldin, G.M. 1973. "A Method of Averaging
measurements might indicate the presence of a homo- Capillary Pressure Curves." Canadian Well
geneous reservoir and permit the analyst to employ fairly Logging Society, Vol. 6, No. I, Dec. 1973, pp.
large-scale approximations ofthe reservoir. Conversely, 33-46.
poor correlation could signal the presence of extreme Leverett, M.C. 1941. "Capillary Behaviour in Porous
heterogeneity in the larger reservoir sense. Solids." Trans., AIME, Vol. 2, T.P. 1223, pp.152-
169.
Schlumberger. 1972. Log Interpretation Charts.
Houston, TX.
- - - . 1987. Log Interpretation Principles!
Applications. Houston, TX.
Shell Development Company. 1969. Petrophysical
Engineering. Course notes, Houston, TX.
Smits, L.J.M., and Waxman, M.H. 1968. "Electrical
Conductivities in Oil-Bearing Shaly Sands."
Trans., AIME, Vol. 243, pp. 107-122.

74
ESTIMATIONOF VOLUMES OF HYDROCARBONS IN PLACE

5.6 TESTING AND SAMPLING stabilized conditions. The valve in the tool may be
opened and closed as often as required once the packers
5.6.1 Introduction have been set. A typical DST would include a 5-minute
The flow capability of a well is generally found by preflow, a 30-minute shut-in, a main flow of 60
measurement of actual production. Two general types minutes, and a final shut-in of 90 minutes.
of flow tests, the drillstem test and the production test,
The flow rate during a DST is usually measured when
are often used to measure production rates and obtain
reservoir fluid appears at the surface. Gas and liquid
flow pressures. In addition to collecting this data, flow
rates are easily measured by the service company pro-
tests provide good opportunities to gather samples of
viding the DST equipment. Flow rates may be estimated
produced fluids for further analysis. This section will
in cases where reservoir fluid does not reach the surface
discuss flow tests, as well as the reasons and procedures
by observing the amount ofliquid recovered in the drill
for collecting fluid samples.
string after the test is complete because any fluid that
5.6.2 Drillstem Tests travelled past the valve in the DST tool during the test
would be trapped in the drill stem after the valve was
The drillstem test (DST) is often the first opportunity to
closed for the final buildup. Many experienced rig su-
observe the flow characteristics and record the pressure
pervisors are able to accurately determine the amount
of a reservoir. A DST meets three objectives when
of fluid recovered in the drill stem while retrieving the
conducted properly:
DST tool. Average flow rates are estimated by dividing
1. To obtain a stabilized initial reservoir pressure the flow times into the volume of liquid recovered.
2. To obtain an indication of stabilized flow rates Pressures are recorded by gauges inserted in the DST
3. To obtain samples of reservoir fluids tool. Drillstem test tools allow the placement of gauges
The majority of wells today are drilled using the rotary in a variety of locations so pressures can be measured
drilling technique, which consists of rotating a bit that above the DST valve, outside the tool, and below the
is fastened to a drill string made up of pieces ofthreaded tool. The most important measurements are those re-
pipe called the drill stem, and drill collars. The drill col- corded inside the tool itself. Analysis ofthese pressures
lars are heavy pieces ofdrill stem and allow a downward indicates the hydrostatic head of the mud column and
force to be applied to the bit. The bit is rotated by the drawdown and buildup' pressures. Pressure gauges are
drill string which, in turn, is rotated at the surface by the discussed in more detail in Section 5.8.
drilling rig. Using this rotary drilling technique, the drill Closed-chamber DSTs are run in much the same
hole is deepened until the prospective zone is reached. manner as regular DSTs, but the fluids are not allowed
A DST is conducted by replacing the drill bit with a to flow to the surface. A pressure gauge at the surface
drillstem test tool, attaching it to the bottom ofthe drill records the increase in pressure as fluids enter the drill
string and lowering it into the hole. The tool consists of string. A detailed analysis of the pressures obtained at
one or two sets of isolating packers, a valve for allow- surface, the pressure measurements recorded downhole,
ing reservoir fluid to flow, and locations where pressure and the liquid recoveries will yield production rates.
recorders may be placed. A packer is an expandable
5.6.3 Production Tests
rubber element that is squeezed up against the hole.
When the packers are expanded, or set, the zone of in- Production tests are performed on completed wells; the
terest is isolated from the fluids trapped between the tests provide the engineer with insight into the produc-
hole and the pipe (also known as the annulus). Figures tion potential of the reservoir. Production tests may be
5.6-1 and 5.6-2 illustrate a typical DST tool in unset conducted immediately after the well has been com-
and set position. It is important to ensure that the pleted or after the well has produced for several years.
packers are set in a zone that will allow a tight seal. This is an important consideration as reservoir charac-
teristics do change through the life of the reservoir.
Once the packers have been set at the proper depth, the Parameters such as pressure and flow potential all change
valve inside the tool is opened, allowing reservoir flu- as fluid is withdrawn from the pool.
ids to flow up the drill string to the surface. Produced
The equipment necessary for a production test can
liquids (oil, condensate, water) are sent to tanks, and
vary from well to well. The basic requirements are press-
gases are generally sent to a flare pit or flare stack.
ure recorders to continuously measure flowing and
After a set period oftime, the downhole valve is closed,
buildup pressures, and surface equipment that is able
and the reservoir pressure is allowed to increase to

75

b
DETERMINATION OF OIL AND GASRESERVES

Figure 5.6-1 Drillstem Test Tool (Unset Position) Figure 5.6-2 Drillstem Test Tool (Set Position)

76

r
ESTIMATION OFVOLUMES OFHYDROCARBONS INPLACE

to accurately measure the flow rates of the well. conventional, modified isochronal, or single point. All
Generally, pressure recorders are placed downhole close three yield information about the AOF potential of a
to the producing formation. Pressure recorders are avail- gas zone. Drawdown tests are conducted to determine
able in various pressure ranges. It is unwise to expose reservoir characteristics such as damage, permeability
the recorder to more than 75 percent of its maximum and flow potential. Pressure buildup tests yield much
range. Flow rates are best measured on single phases, the same information as drawdown tests with the
so test separators are used. A two-phase separator sepa- addition of stabilized reservoir pressure.
rates gases from liquids, while a three-phase separator
Another aspect ofproduction test design deals with the
separates gas, oil, and water. Surface equipment must
duration of flow rates and any corresponding buildup
be sized correctly to ensure that it will not be a bottle-
times. Generally, flow rates should be of sufficient time
neck for the producing stream.
to allow the flow rate to reach stable conditions. As this
In the design, implementation, and analysis of a time period is usually dependent upon the parameters
production test, several factors must be considered: the the test is designed to determine, field experience and
purpose ofthe test and the data that is required, the res- rules of thumb are generally used. Typically, buildup
ervoir and fluid characteristics, the type of test, the test times must be at least twice as long as the preceding
equipment necessary, and any operating difficulties. flow rates. Exceptions to these rules occur in some AOF
The purpose of a production test often depends upon a tests, where the flow time and buildup time are set and
number of considerations, the first of which is the life are independent of whether the reservoir has reached
of the well. The data needed from a well that has just stabilized conditions. The question of the actual flow
been completed may be different from the information rate is usually dependent upon previous production data.
needed for a well that has been on production for sev- It is recommended that the well be flowed at the antici-
eral years. The determination of information such as pated delivery pressure, or if the delivery pressure is
delivery rate, reservoir damage, drainage area and not known, at 50 to 70 percent of the well's AOF.
boundaries, stabilized flow conditions, and the need for
5.6.4 Sampling
formation stimulation treatment must all be factored into
the purpose ofthe test. Many tests are conducted to ex- Collection ofrepresentative samples of reservoir fluids
amine the success offormation treatments, or to recover is necessary for many reservoir engineering applications.
representative reservoir fluid samples. Gas, oil and condensate samples are needed for
compositional analysis and PVT (pressure-volume-
Knowledge of the characteristics of the reservoir and
temperature) analysis. Water samples yield information
the fluid is important for the design ofa production test.
relating to the water salinity and solids content. Special
Many tests yield inadequate data because of avoidable
care must be taken when sampling, so that samples col-
problems. Reservoir damage may occur due to high flow
lected are representative of the fluids found in the
rates, or the well may freeze offdue to hydrates. Knowl-
reservoir. The inability to gather good samples may
edge of reservoir and fluid characteristics will lead to
compromise many calculations and studies performed
the collection of data that is as accurate as possible.
at a later date. Two methods are commonly used in ob-
There are many different types ofproduction tests, each taining reservoir fluid samples: subsurface sampling
of which will yield important data. Each type may be and surface recombination sampling.
run alone or in combination with other tests. The
In subsurface sampling, a sample chamber is run to the
following are common types oftests:
bottom of a flowing well on wire line. The sample is
Interference collected at bottom-hole pressure and then isolated
Absolute open flow (AOF) of gas wells through the closing of the inlet valves. The well is kept
Constant and variable rate flowing during the process to avoid fluid segregation
(and thus an unrepresentative sample). The seemingly
Pressure buildup
simple process of obtaining representative samples is
A well is generally "cleaned up" after a zone has been easily hampered by the presence ofmore than one phase
completed or worked over. This allows completion in the wellbore. If the reservoir is initially undersatu-
fluids to be withdrawn from the reservoir to prevent fur- rated above the bubble-point pressure, an accurate
ther formation damage. A segregation test helps to sample is easily obtained. However, if the reservoir is
determine if one zone is in pressure communication initially at the bubble point, it is difficult to assess
with another. AOF tests can be one of three types:

77
q

DETERMINATION OFOIL AND GASRESERVES

whether the oil and gas are being collected in the saturation pressure, the samples are taken while the wen
correct volumetric proportions. Wen conditioning can is shut in. Well conditioning procedures are given
alleviate this problem. The principal drawback of sub- in API Recommended Practice No. 44 (American
surface sampling is that only small volumes of wen fluids Petroleum Institute, 1966).
are sampled. Furthermore, it is necessary to take sev- In the course of sampling, care must be taken to ensure
eral downhole samples so that saturation pressure can that the sample containers are properly purged to
be compared at the same temperature. prevent air contamination.
In surface recombination sampling, separate volumes
of oil and gas are taken at separator conditions and re- Gas Samples
combined to give a composite fluid sample. Sampling By regulation in Canada and as good operating
points should be chosen in order to provide homoge- practice, gas samples are obtained whenever a drillstem
neous, preferably single-phase, sample mixtures. Surface or production test results in flows of gas. Usually, the
sampling allows the collection of fluid samples at the samples are obtained at the surface from the outlet of a
operating conditions of the surface production facili- separator at relatively low pressures (200 to 700 kPa
ties. Samples are usually collected by fining a cylindrical range). Steel sample containers are used in the case of
container with valves at both ends. Due to the location sweet gas. Where hydrogen sulphide (HzS) is present in
of the sampling point, a much larger sample may be the gas, it is important to use special containers because
obtained. Because the samples are taken over several steel containers will absorb small concentrations ofHzS
hours of flow, this method gives a fairly accurate pro- and thus prevent its detection during laboratory analy-
ducing gas-oil ratio (GOR). As in subsurface sampling, sis of the sample. If these are undetected, the results
the well must be conditioned to ensure stability during could be small concentrations ofHzS, improper design
sampling. If done correctly, both sampling techniques of gas processing facilities, and high costs to effect
should yield identical samples. changes. Determinations for HzS are often made at the
Prior to any sampling of fluids, whether at surface or wellsite to ensure that any small amounts of HzS are
bottom-hole, it is important to consider whether the fluid detected. In fact, when there is any doubt, Tutweiler or
to be collected represents the reservoir fluid. When fluid Gas-Tech measurements should always be made at the
is withdrawn from the reservoir, the pressure changes wellsite.
caused by the withdrawal sometimes cause liquid and Gas samples are sometimes obtained in conjunction with
vapour to separate. If a collected sample contains a dis- PVT sampling at bottom-hole conditions and transferred
proportionate part of either of the two phases, the to special high-pressure containers for transportation and
subsequent fluid analyses will give erroneous results. analysis at appropriate laboratories. Conventional anal-
To prevent this problem, it is recommended that the wen yses usually identify the mole percentages of various
be conditioned to remove from the sample point any hydrocarbon components as well as carbon dioxide,
fluid that may compromise the sample. hydrogen sulphide, helium, and nitrogen. The spec-
Conditioning is generally accomplished by flowing the ific gravity and heating content of the gas are also
wen at low drawdown rates so that any altered fluid is determined.
displaced by true reservoir fluid. Well conditioning re- Gas analyses are used in reserves determinations to
duces the amount of free gas present at the wellbore by calculate the compressibility factor of the gas mixture
essentially pushing it back into solution. The first stage and to estimate the volumes of sales gas, recoveries of
of a conditioning program involves producing the well natural gas liquids, and processing shrinkages.
at a low stabilized rate at constant temperature and gas- In Canada, gas analyses can generally be obtained quite
oil ratio. This reduces the free gas saturation below the readily through public sources and, in particular, through
critical gas saturation for gas flow in the formation. This the conservation and regulatory authorities of each
first stage may take as little as a few hours or as long as province.
several days. Any remaining gas is forced back into
solution through pressure buildup (the wen is shut in). Water Samples
The shut-in period is dependent upon the transmissibil- Formation water samples can be obtained from the
ity of the formation and can last up to 72 hours. If the recoveries of drillstem, wireline, and production tests,
wen was initially undersaturated, it is flowed at a low and during routine production operations. Care must
rate during the sampling. If the well was initially at be taken to use only analyses of samples that are

78

...
ESTIMATION OF VOLUMES OF HYDROCARBONS INPLACE

uncontaminated by drilling mud filtrate and the various PVT Samples


chemicals used during production and treating. In
For a better understanding of the physical properties of
many cases, determining whether the sample is repre-
a reservoir fluid, a PVT study should be performed early
sentative of the formation is based on rather subjective
in the life of the reservoir to obtain truly representative
judgement.
samples ofthe reservoir fluid. Generally, it is better that
Analyses of oil field water samples usually identify the PVT studies be performed on subsurface samples.
major constituents and total solids in milligrams per
litre or parts per million. Total solids can range from Tests
a few hundred to over 200 000 parts per million in After a representative sample has been obtained, the
Canadian oil field formation waters. Specific gravity following five tests are normally performed to assess
and resistivity are also measured. the fluid behaviour and properties:
Water analyses are generally used to identify the source Pressure-Volume Test. A pressure-volume (PV) test
of the water or to obtain the resistivity of the water in involves the constant composition expansion of the fluid
order to calculate interstitial water saturations from sample at reservoir temperature. The sample is initially
porosity information and electrical well logs. undersaturated (reservoir pressure is greater than bubble-
Analytical results are often presented graphically to point pressure). As the pressure is reduced towards the
enable visual comparisons or "fingerprinting" of wa- bubble-point pressure, the oil compressibility is identi-
ters to be made. The Stiffdiagram (Stiff, 1951) is widely fied. The actual bubble-point pressure is also measured.
used for this purpose. Below the bubble point, the two-phase volume is
Useful compilations offormation water resistivities are measured as a function of pressure.
available for the majority of productive reservoirs in Differential Liberation or Vapourization Test. In a
the western Canada sedimentary basin and other parts differential liberation test, the sample is subjected to an
of Canada. One such compilation is published by the incremental pressure reduction from the bubble point
Canadian Well Logging Society (1987). The published to zero. As the solution gas evolves, it is removed from
formation water resistivities represent the best informa- the system. As a result, the composition of the fluid
tion available at the time of publication, but care must sample is always changing. This test identifies the rela-
be taken to use the data most appropriate to the specific tive density of gas, the gas deviation factor, the gas
application. formation volume factor, the relative oil volume factor,
and the gas-oil ratio (the gas remaining in solution at a
Oil Samples given depletion pressure as compared to the volume of
residual oil at stock tank conditions). During this
Conventional Surface Samples
process, the oil density at each pressure increment
Crude oil samples are obtained and analyzed for a is determined by mass balance. A quality control
variety of characteristics that are ofimportance in res- check compares the calculated oil density at the deple-
ervoir work, production operations, wellsite treating, tion pressure (through mass balance) to the measured
pipelining, and refining. This brief discussion is re- oil density at this point.
stricted to crude oil samples as they apply to reservoir Viscosity. Viscosity is measured at reservoir tempera-
engineering. A distinction will be made between con- ture at a series ofpressures above and below the bubble
ventional crude oil samples obtained at the surface and point.
crude oil samples obtained at reservoir conditions in
Flash Liberation or Separator Tests. In a flash
order to measure PVT characteristics in the native state.
liberation test, the sample is again subjected to a press-
Conventional surface crude oil samples are generally ure reduction from bubble point to zero. The oil and
obtained from crude oil storage tanks, at the wellhead, liberated gas, however, are kept in equilibrium through-
and from drillstem test recoveries. The American out the expansion. This test identifies the formation
Petroleum Institute has published guidelines that should volume factor and the solution gas-oil ratio at separator
be followed in obtaining reliable oil samples conditions. One or more flash liberation tests should be
(American Petroleum Institute, 1966). done to determine the behaviour of the reservoir fluid
as it passes up the tubing, through the separator(s), and
into the stock tank.

79
DETERMINATION OFOILAND GASRESERVES

Compositional Analysis. Most reservoir fluid In an undersaturated oil reservoir,depletionbegins as a


parameters can be estimated fromcompositional analy- flash processand eventuallybecomes a combinationof
sis. In general, the more fluid parameters sought, the flash and differential liberation processes. Because of
more detailedthe analysis must be. A typical composi- this, care mustbe taken to ensure that the correct data is
tional analysis includes a separation of components being used in engineering calculation. Flash data must
through C10 as a minimum. More sophisticated equa- be adjusted using differential liberation volumes to re-
tionsof statemayrequire analysis through C30orhigher. flect the variouspressureregimesinthe reservoirduring
It is important to note that due to the nature of the depletion.
expansion, the flashand differential liberation processes References
yield different vapour-liquid splits. The degree of
difference depends mainly on the composition of the American Petroleum Institute. 1966. "Sampling
initialsystem. In general, in low volatilityoils in which Petroleum Reservoir Fluids." API RP 44,
the solution gas consists mainly of methane and ethane, Washington, DC.
the resulting oil volumes for either form of expansion Canadian Well Logging Society. C,J. Struyk (ed.).
are essentially the same.For highervolatility oils,which 1987. Formation Water Resistivities ofCanada.
contain a relatively high proportion of intermediates, Sep. 1987, Calgary, AB.
the resulting oil volumes can be significantly different. Stiff, H.A., Jr. 1951. "The Interpretation of Chemical
Water Analysis by Means of Patterns." JPT., Vol.
192,pp. 15-17.

80
ESTIMATION OF VOLUMES OFHYDROCARBONS INPLACE

5.7 RESERVOIR TEMPERATURE after the casing is cemented could be affected by the
heat released in the setting reaction of the cement.
5.7.1 Introduction
The most representative BHT data is probably obtained
Reservoir temperature is of prime importance in the following the completion of the well after it has been
determination of in-place volumes and recovery factors shut in long enough for temperature equilibrium to be
for gas and oil. In estimating gas reserves, a knowledge established between the wellbore and the formation. An
of temperature is necessary to calculate the gas com- ideal time to measure BHT is during a static bottom-
pressibility factor and gas formation volume factor. T.o hole pressure survey, or pressure buildup following a
estimate oil reserves, knowledge of the temperature IS flow test, or during the process ofbottom-hole sampling
critical if laboratory PVT data is to be measured under following the completion ofthe well. In some instances,
reservoir conditions. Temperature also affects other it is a good practice to run a temperature-depth profile
parameters such as oil viscosity and miscibility, and on each producing well using a continuous recording
thereby impacts reservoir engineering estimates of OIl thermometer.
recovery.
In the early stages of development and production of a
Often values ofreservoir temperature are estimated from field or reservoir, measured temperature data may be
data in the literature or from readings obtained during too sparse to provide a reliable estimate ofinitial condi-
logging or testing operations. Such data may be accept- tions. In this case, regional correlations may be helpful.
able under initial conditions, but should always be The following list provides correlations for estimating
confirmed or adjusted using more reliable data as it be- formation temperature for several regions in North
comes available. The most reliable source of temperature America [T, = formation temperature in C (OP);
data is a bottom-hole temperature (BHT) measurement D = depth in m (ft)]:
taken with a continuous recording subsurface tempera-
ture gauge under stabilized bottom-hole conditions. Alberta (average) Tf = 1.7 + 0.0366D
Other methods, such as using maximum reading ther- (T, = 35.0 + 0.0201D)
mometers during testing or logging operations, are Alberta Bashaw T, = 0.0 + 0.0341D
considered less reliable. (carbonale complex) (T f = 32.0 + 0.0187D)
Although temperature is usually a function of depth, a Alberta Rimbey-Meadowbrook T, = 9.4 + 0.0304D
number of other factors affect temperature as well. (carbonate complex) (T, = 49.0 + 0.0167D)
Isotherms at depth may not always follow surface AlbertaWindfall-SwanHills T, =
0.0 + 0.0352D
topography. (carbonatecomplex) (T, = 32.0 + 0.0193D)
This section describes various techniques used for Louisiana Gulf Coast Tf = 23.3 + 0.0228D
measuring or estimating BHT and points out the short- (hydropressure zone) (T, = 74.0 + 0.0125D)
comings in some ofthe values obtained.
North Texas T, = 15.6+ 0.0306D
5.7.2 Data Sources (T, = 60.0 +0.01675D)
Temperature measurements are made in conjunction OklahomaAnadarko Basin T f = 18.9+ 0.0202D
with a number of operations conducted on a well. Many (T, = 66.0+ O.OlllD)
of these measurements will have varying degrees of Oklahomadeep Anadarko Basin Tf = 18.9+ 0.0255D
accuracy. Measurements taken while the well is being (below 21,000 ft) (T, = 66.0+ 0.014D)
drilled will likely be influenced by the cooling effect of
In general, formation temperature in the hydropressure
the circulated drilling mud and will be only approxi-
zone may also be estimated from thermal gradient maps
mate. During open hole logging, errors may occur in
published by the United States Geological Survey ~nd
BHT measurements unless sufficient time is allowed
the American Association of Petroleum Geologists
for the wellbore to reach temperature equilibrium with
(Cronquist, 1990), using the equation:
the formation. Measurements taken during flow tests
could be detrimentally affected by the cooling effect T,= Tsa + goD (I)
created by gas expansion when fluids enter the wellbore
where T, = formation temperature, C COP)
or flow through any mechanical restriction in the
wellbore such as a bottom-hole choke, mandrel or flow Tsa = average surface temperature, C (OP)
nipple. Temperatures recorded on logs run immediately geothermal gradient, C/m (Op/ft)
= depth, m (ft)

81

7
DETERMINATION OFOIL AND GAS RESERVES
--,,
Reservoir temperatures obtained using these correlations temperature. To estimate true formation temperature
should be considered preliminary, and they are not a from raw BHT data, a correction must be applied.
substitute for actual measurements. The corrections may be made using a Horner plot
In Alberta, temperatures measured at a mean depth method. This method owes its name to the fact that
for each oil and gas pool are shown in the annual it is identical to the equation developed by Homer to
reserves report published by the Energy Resources predict reservoir pressure recovery. In this method,
Conservation Board (1991).
BHT = T_ + A In [(t + tcire)/t] (2)
Reservoir temperature is considered to be constant over
the life ofa reservoir, and most reservoir processes, with where T_ = undisturbed formation temperature
the exception of in situ combustion and steam or water A the negative slope of the Horner
injection, are considered to be isothermal. Waterflood- straight line (an unknown constant)
ing can cause significant cooling. In some of the West t shut-in time
Pembina Nisku reefs in Albertawhere pools were con- teire -- circulation time
verted to hydrocarbon miscible flooding after many Thus if two or more BHTs-measured at the same depth
years on waterflood, reverse temperature gradients were in the same well, but at different times-are known, the
still noted years after the pools had been converted. equilibrium temperature may be estimated.
5.7.3 Data Analysis The Horner method was used by Deming and Chapman
(1988) to analyze BHT data gathered from microfilm
It is pertinent to give some thought to the means of
copies of log headers on file at the Utah Oil and Gas
arriving at a value for reservoir temperature. The term
Commission. Figure 5.7-1 shows 18 Horner plots for
bottom-hole temperature or sand-face temperature is
BHT data from oil and gas fields in the Utah-Wyoming
applied to the temperature opposite the producing hori-
thrust belt. Although the quality of these data is com-
zon. The logical place to record a single representative
paratively high, some scatter about the Horner line is
measurement would be at the centre of the producing
inevitable.These plots show that successivelogging runs
interval or at the pool datum depth. Frequently, mea-
generally yield a series of temperatures that are consis-
suring tools cannot be run to the desired depth, and tent with the Horner model of conductive heat transfer
therefore the temperature must be extrapolated. For this
into the borehole during shut-in.
reason, an accurate determination of the temperature
gradient should be established at the run depth. This 5.7.4 Data Analysis on a Regional Basis
can be done most conveniently while running a press- Recently published technical data provides good insight
ure bomb to measure the static bottom-hole pressure. It on variations in BHT in western Canada (Lam and Jones,
is likely that temperature would be extrapolated to the 1984; Lam et aI., 1985). One of the key areas ofinterest
same datum as pressure. has been southern Alberta where a high density of wells
If it were desired to estimate BHT from open-hole well provides an opportunity to measure and explain
logs, some adjustment to the recorded temperatures temperature variations from one region to another.
might be necessary (Deming and Chapman, 1988). Figure 5.7-2 shows the main topographic features of
Following the cessation of drilling, the usual practice is southern Alberta with respect to the eastern limit ofthe
to condition the borehole by circulating drilling mud disturbed belt. As might be expected, variations in the
throughout the hole for a period of time known as the temperature gradient from the calculated mean value
circulation time. Because the temperature of the drill- (referred to as "spread") are more frequent in the vicin-
ing mud is usually lower than the undisturbed formation ity of the disturbed belt. Figure 5.7-3 shows these
temperature at the bottom of the well, temperature in spreads. The spread values vary from a low of 2C in
the wallrock drops during mud circulation. When cir- the plains area of southern Alberta to 10 - 13C in
culation of drilling fluid is stopped, the well is "shut areas near the edge of the disturbed belt. These "spread
in," and the temperature in the borehole rises. It is dur- anomalies" occur between Hinton and Edson, to the
ing this period of time, usually 4 to 30 hours after the southeast of Hinton and Edson, and south of Calgary.
end of circulation, that the well is logged and the BHT One notable feature on this map is the coincidence of
measured at a shut-in time, which is the time elapsed the high-spread area south of Calgary and a fault zone
since circulation ceased. Thus the BHT measured is as indicated on an ERCB Paleozoic surface map. In
higher than the temperature of the circulating mud, addition, relatively high spread values occur in the
but lower than the true equilibrium or formation Medicine Hat area to the east (as indicated by light

82

s
ESTIMATION OF VOLUMES OF HYDROCARBONS IN PLACE

Shut-in Time, t (h) Shut-in Time, t (h)


50 30 20 15 10 5 50 30 20 15 10 5
140 140

130 130
Wells
120 AR34-02 120
G 5657m
G
~ 110 ~ 110 Wells
Q)
~ CC 846 AI ~
::> ::> 458 F2
li! 100
5011 m
li! 100 4700m
Q) Q)
0. ARE 28 - 06 0. ARE36-14
E 4595m E 4540m
90 90
~ ARE 20 - 16 ~ 45801
Q)
4145 m
Q) ARE 28 - 01
"0 "0 80 4011 m 4221 m
::c 80
, AR34-02
::c
E
a
3544m E
a
ARE 28 - 01
2996m
70 70
'6 '6CO AR 4-1
CO AR 3-2 2332m
60 2737m ARE 30 -14 60
3305m CC846 BI
AR 10-1 2186 m
50 2367m 50 AR 34 - 2
1933m
ARE30-14
IRD #1
40 1462 m 40 1688m
.1 .2 .3 .4 .5 .6 .1 .2 .3 .4 .5 .6

(a)
In - C
+-
t
tel")
(b)
C
In -+ t-
t
e;" )

Source: After Deming andChapman, 1988.

Figure 5.7-1 Representative Horner Plots from Wells in the Utah-Wyoming Thrust Belt

'M~-~'- Lake

Elevation Above
Sea Level
(tt)
12000 I Faull From

1
6000 ERCSPaleozoic
\ surface map
.,....... 3000
...........
... 4000
2000 'C

1Il~~
1000
o
. 6
Source: AfterLam at al., 1985.
c::J
oI
Figure 5.7-2 Relief Map for Southern Alberta
Source: After Lamat at., 1985.

Figure 5.7-3 Contour Plot of Spread for BHT


Values in Southern Alberta

83
DETERMINATION OF OIL AND GAS RESERVES

shading in Figure 5.7-3), but these are surrounded by upward and downward water movementsin the sharply
~L'nerally low spread values. dipping permeable formations cause the isotherms to
It has been observed that isothermal surfaces do not dip sharply, giving largespreadvalues as indicated. Such
alwuys tallow topographic surfaces for a number of rea- water movement is thought to occur in the western
S,HIS: a rapidlyvaryingtopographic surface and smooth Alberta basin. In the east, where the water movement is
is,'lhemlal surfaces at depth, or distortion to the iso- mainly lateral, the isotherms lie parallel to the surface
thermal surfaces due to a number of influences such as and the spread values are smaller.
taults, water movement, or subsurface temperature or Another reason for an increase in spread values may be
L,,'ndueti,ity anomalies. Water movement along faults the effect ofthermal conductivitycontrasts between ad-
and fractures increases spread values when water is jacent dipping beds. For example, the clastic and shaly
heated at depth andtravelstowardthe surfacealong fault formationsabovethe Palaeozoicsurfaceare oflow ther-
planes. Thiscan cause large horizontal temperature dif- mal conductivity,whereas the calcareous and evaporitic
ti:renees at the same depth level and, consequently, a formations below the Palaeozoic surface are more con-
large spread in the temperature values. ductive. In steeplydippingbeds,suchchangesin thermal
\\' atcr movement through permeable strata is another conductivity may distort the isotherms so that tempera-
tactor that can strongly influence the temperature ture vs. depth plots over a 3 x 3 = 9 TWP/RGE area will
,,'giIlle. Hydrodynamics appears to play an important exhibit large spread values. This is illustrated in Figure
1\'1<' in the distribution of subsurface heat and so influ- 5.7-4 in which two 9 TWP/RGE areas of west-central
enccs the temperature distribution. Gravity-imposed Alberta are compared (Lam and Jones, 1984).Although
,l,lwnward water movement occurs in the upper strata these areas are in the same general region, they exhibit
as",ciatN with surface recharge while, in other areas, a totally different temperature gradient and spread.
l',-nneable beds allow upward water movement. These

Temperature ('C) Temperature (OC)


50 100 150 50 100 150
o-c-'-~-'----'--'-L->--'~-'----L--<"-'---'--+-o

Grad. = 24.2 QC/km Grad. = 31.7C/km


(13.3'FI103ft)
1-
,
... (17.4'F/l 03ft)

,
, ..
,,
" , ..
, ,
...
2-
- \.
\~
~,

\\
\
,),
2
.. . '
",. tit
, '~ , "
,, ',,- . to :::.
,, ,, %
. ....'-
m
,, " c

... ...
'~
4
... ...
.... ....
,- ... . , 5

scar-care Error ofEstimate


.. .. ,

Standard Error of Estimate


4.2'C S.4e

100 200 300 32


100 200 300
Temperature (OF) Temperature (OF)
,3:..~~: ~~ earnand Jones, 1984.

=;sure 5.7-~ Examples of Temperature vs. Depth Plots from Two Areas in Southern Alberta
1 ESTIMATION OF VOLUMES OF HYDROCARBONS INPLACE

5.7.5 Data Quality


During the drilling and completion ofa well, there are a
number of opportunities to obtain BHT data. It is im-
References
Cronquist, C. 1990. Reserves Estimation, Petroleum
Engineering Manual. IHRDC Publishers, Boston,
portant to plan ahead so that the best quality data is MA, PE 508, pp. 53-56.
obtained at the most opportune time and at minimal cost. Deming, D., and Chapman, D.S. 1988. "Heat Flow in
IfBHT data is required while drilling a well, a drillstem the Utah-Wyoming Thrust Belt from Analysis of
test may provide the most representative data. Tempera- Bottom-hole Temperature Data Measured in Oil
ture derivations from logs run in the open-hole wellbore and Gas Wells," Jour. ofGeophys. Res., Vol. 93,
have been observed to be consistently lower than the Nov. 1988, pp. 13,667 - 13,672.
BHT measured from drillstem tests despite the use of Energy Resources Conservation Board. 1991.
the Horner plot method to extrapolate the temperature Alberta's Reserves ofCrude Oil, Oil Sands, Gas,
buildup (Hermanrud et aI., 1990). Natural Gas Liquids, and Sulphur. Calgary, AB.
The preferred method of obtaining representative BHT Hermanrud, C., Cao, S., and Lerche, I. 1990.
data is to obtain measurements following the well "Estimates of Virgin Rock Temperature Derived
completion and an appropriate shut-in period. An ideal from BHT Measurements: Bias and Error."
opportunity to obtain BHT data is in conjunction with a Geophysics, Vol. 55, Jul. 1990, pp. 924-931.
static bottom-hole pressure measurement, or a pressure
Hermanrud, C., Lerch, I., and Meisingset, KK 1991.
buildup following an oil or gas deliverability test. Even
"Determination of Virgin Rock Temperature from
under these circumstances, two factors could influence
Drillstem Tests." JPT, Vol. 43, Issue 9, Sep.
the accuracy of a temperature measurement: a large
1991, pp. 1126-1131.
drawdown during the flow period, and the depth at which
the temperature is recorded. To improve the quality of Lam, H.L., and Jones, F.W. 1984."A Statistical
data, the wellbore drawdown should be moderate, and Analysis of Bottom-hole Temperature Data in the
the temperature sensor should be within the producing Hinton Area of West-Central Alberta."
interval (Hermanrud et. aI., 1991). Tectonophysics, Vol. 103, pp. 273-281.
It is important to note that temperature gradients often Lam, H.L., Jones, F.W., and Majorowicz, J.A. 1985.
vary from one region to another and, even within the "A Statistical Analysis of Bottom-hole
same area, may deviate significantly from the mean av- Temperature Data in Southern Alberta."
erage due to the proximity ofcertain geological features Geophysics, Vol. 50, Apr. 1985, pp. 677-684.
in the area. Prudence is required to recognize these de-
viations and not dismiss them as errors in measurement.
Caution is recommended when taking a BHT measure-
ment in shallow wells on hot summer days using a
maximum reading thermometer. The maximum read-
ing could be the surface temperature and not the BHT.
In conclusion, BHT data is available from a number of
sources and the quality of this data is often not ques-
tioned. Such acceptance stems from the fact that small
variations in BHT when converted to absolute tempera-
ture result in a very small percentage error in the overall
reserve estimate. On the other hand, to minimize this
error and improve the overall quality of the reserve es-
timate, one should take advantage of the drilling and
completion process to obtain data that best represents
the true BHT conditions.

85

Ib-. _
DETERMINATION OF OIL AND GASRESERVES

5.8 RESERVOIR PRESSURE is recovered even if one recorder should fail. Running
tandem recorders also permits comparison between the
5.8.1 Introduction two to verify the accuracy of the measurements.
Throughout the productive life of a reservoir, a
Pressure measurements are usually obtained by
record of its pressure is necessary in order to make a
lowering these recorders or "bombs" down the wellbore.
number of necessary calculations. Initial pressures ob-
As discussed in Section 5.6.2, the first indication of the
tained after the discovery of a pool are needed for the
pressure of a formation may come from a drillstem test
calculation of volumetric reserves, particularly for gas
(DST), which is usually conducted before production
reservoirs. Reservoir pressure is needed to determine
casing is run into the wellbore (but cased-hole DSTs
gas compressibility and formation volume factors for
are not uncommon). DSTs are also run immediately
oil and natural gas, and to undertake PVT analysis.
upon penetration of a prospective formation in order to
Material balance calculations for both oil and gas sys- examine its potential before drilling fluids damage the
tems require initial reservoir pressures and subsequent .zone.
pressure history after production has commenced.
After drilling operations are finished and the well has
Fluids flow when a pressure difference is created been completed for production, pressure measurements
between two points. When hydrocarbons are removed
are usually obtained by lowering pressure recorders
from a reservoir, a pressure drop is created in the
down the wellbore on a wire line. In some instances,
wellbore. This causes the pressure within the formation the pressure recorders are left downhole for extended
to drop. When a flow of fluid is stopped or "shut in,"
periods of time. In other circumstances recorders mea-
the pressure will equilibrate until it reaches stable
sure the reservoir pressure for only a few minutes. The
reservoir conditions. The time required to reach a stabil-
latter type of pressure measurement is referred to as
ized pressure varies from reservoir to reservoir. Analysis
a static gradient. This measures wellbore pressures at
of the pressure stabilization or "buildup" will reveal
different depths, and these pressures are plotted against
information about the permeability of the formation, the the measurement depth. The resultant plot is used
distance to reservoir boundaries, and any damage to the to identify density changes in the wellbore fluids.
formation. If stable conditions are not reached, the press-
Pressure gradients at reservoir depth are also estimated.
ure buildup data may be extrapolated to estimate the Production tests are commonly conducted when press-
reservoir pressure. ure recorders are left downhole. When left for a period
5.8.2 Data Sources of time, pressures are recorded vs. time. Figure 5.8-1 is
an example of data from a static gradient, and Figure
Two types of pressure recorders are available to
5.8-2, from a flow and buildup test.
measure reservoir pressures: mechanical and electronic
gauges. The mechanical gauge consists of a coiled Formation pressures may also be measured before the
bourdon tube pressure element, which spirals outward well is completed by running open-hole wireline tools.
as pressure is increased inside it. A stylus on the end of These tools push a probe into the formation and record
the tube scribes a thinly coated metal chart, which is the formation pressure.
slowly rotated by a clock in the recorder. The distance Bottom-hole pressures are also estimated by measuring
the stylus moves is proportional to the pressure inside surface pressures and adding the calculated pressure due
the bourdon tube. to the hydrostatic head of fluid in the wellbore. In cases
Electronic gauges use strain, capacitance transducer, where gas and liquid are both present in the wellbore,
and quartz gauges as pressure-sensing devices. These acoustic level indicators are employed to determine the
recorders offer the option of programmable sampling fluid level. The respective hydrostatic heads ofthe flu-
times, and are generally more accurate than mechanical ids are then calculated and added to the surface pressure
recorders. to estimate the bottom-hole pressure.
All pressure gauges must be calibrated to ensure that 5.8.3 Data Analysis
correct pressures are being recorded. Generally, regula- A major problem in recording pressure data is
tory agencies are responsible for setting guidelines for determining whether the reservoir pressure is actually
gauge calibration. It is important that gauges used for stabilized. There are three widely accepted methods of
pressure surveys be calibrated regularly. obtaining a stabilized bottom-hole pressure. The first
It is common practice to use at least two recorders involves the gathering and extrapolation of pressure
during pressure surveys to ensure that representative data

86
.
ESTIMATION OFVOLUMES OFHYDROCARBONS INPLACE

0
produced fluid prior to being shut in, and the variable ,
Depth Pressure dt, is the elapsed time since the well was shut in.
(m) (kPa)
200
~ 0 11784 Plotting the data on semi-log paper theoretically reveals
300 12129 a straight line when the infinite acting radial flow
400 600 12474
900 12819 period is reached. Extrapolation ofthis data to the semi-
600 1200 13164
1500 13509 log value of I yields the theoretical static reservoir
1800 14862
800 pressure. The semi-log value of I corresponds to a
~
2100 17532

1000
2150 17977 shut-in time of infinity.
2200 18422
2250 18867
g 1200 2300 19757 Example 1
2388 20095
=
1i. 1400 This example shows how to extrapolate buildup
Q ~----- Slope = 1.15 kPaim pressure to obtain a static reservoir pressure.
1600
-.\ Pressure recorders were lowered into a new oil well.
1800
\~ Fluid contact @ 1670 mK8
The well was flow-tested for 140 hours at a constant
2000 rate and then shut in to allow the reservoir pressure to
Slope = 8.9 kPaim/ build. The data shown in the following table was
2200
obtained from pressure recorders.
2400

2600
Pressure Recorder Data
10000 14000 18000 22000
Pressure (kPa) Time Pressure Comments
(h) (kPa)
Figure 5.8-1 Static Gradient 0 20175 begin flow
1 9830 continue
2 8750 "
4 7290 "
26,.------------------,
24
8 5570 "
22 24 5050 "
as 20
ll.
60 5030 "
... 18 4670
(t'jX 16
90 "
140 4665 stop flow
C14 140.11 5577 continue
~ 12
~ 10 140.25 5924 "
=8
d: 6
140.50 6435 "
4
140.75 6743 "
2 141.2 7656 "
o +-~_~-_-~-~~-_--I 142.25 9 163 "
o 100 200 300 400
144 11077
Time (h)
"
148 13338 "
152 14273 "
Figure 5.8-2 Pressure vs. Time 156 14878 "
160 15345 "
buildup data. The second utilizes a static pressure 170 16146 "
measurement, where the shut-in time to reach stabiliza- 180 16681 "
tion is determined from previous buildup tests. The third 190 17 074 "
method is also a static pressure measurement, but the 210 17623 "
shut-in time of the well is arbitrarily set. 230 17996 "
350 18989 end of test
The method most commonly used to extrapolate
pressure data was first discussed by Horner (1951). The
procedure involves the plotting of pressure data during As previously stated, the time function [(HLlt)/Llt) must
buildup vs. a time function [(Hdt)/dt) on a semi-log be calculated. The time, t, is 140 hours, and since
plot. The time, t, is the time during which the well Llt is the elapsed time since the well was shut in, 140
must be subtracted from all the times once the buildup

87
b _
DETERMINATION OFOILAND GASRESERVES
--
portion ofthe test begins. The resultant data is shown in However, if the reservoir is not at stable conditions, or
the following table: ifdepletion is thought to have occurred, a buildup analy-
Horner Time Data sis is very useful in the determination ofstable reservoir
pressures.
Time (t+4.t)/M Pressure Once pressure data for a reservoir has been collected
(h) (kPa) from two or more wells, the data should be corrected to
0 - 4665 a common datum depth. Many hydrocarbon reservoirs
0.11 1273.7 5577 vary in elevation from one end to the other. In these
0.25 561.0 5924 situations, a common pool elevation or datum is gener-
0.50 281.0 6435 ally established. When pressure data is recovered from
0.75 187.7 6743 wells that have different elevations, the pressure data
1.20 117.7 7656 must be corrected to this datum depth. The pressure gra-
2.25 63.2 9 163 dient is multiplied by the difference in elevations, and
4 36.0 II 077 the result is added to or subtracted from the uncorrected
8 18.5 13338 data. This procedure will correct all pressures collected
12 12.7 14273 for a given reservoir to a common datum depth.
16 9.75 14878
20 8.00 15345 Example 2
30 5.67 16146
40 This example illustrates how to determine the datum
4.50 16681
50 pressure for two wells.
3.80 17074
70 3.00 17623 Pool Datum is at 1467m subsea
90 2.56 17996 Well: 01-02-003-04 W5M 09-02-003-04 W5M
210 1.67 18989 Formation: Triassic Triassic
KB elevation: 930m 983 m
When the data has been plotted on semi-log paper, a Top of formation: 2397.0 mKB 2460.0 mKB
trend can be seen toward the end of the buildup (Figure 930.0m 983.0 m
5.8-3). When the trend is extrapolated, the intersection -2397.0 m -2460.0 m
of the line with a time value of I (which means infinite Formationtop: -I 467.0 mss -1477.0 mss
t.t) indicates the theoretical pressure the reservoir will Date: October 3, 1991 October 3, 1991
reach. The extrapolated pressure was estimated to be Recorder
20 175 kPa. run depth: 2388.0mKB 2453.0mKB
(-1458.0 mss) (-I 470.0mss)
26 Pressure at
24
run depth: 20095 kPa 20197 kPa
"' ~~ ~
Extrapolated pressure of20 175kPa
Pressure gradient
~ 18 (obtained from
x 16
static gradient) 8.9 kPa/m 8.8 kPa/m
"0 14
::. 12 Pressure at -1458.0 mss -1470.0 mss
~ a
~ 10 D
pool datum: -I 467.0 mss -1467.0 mss
III 8 . D
~ 6 a a a 9.0m -3.0m
~ a
4
2
9.0m -3.0m
o -I---~-_ _~_ _~ -I x 8.9 kPa/m x 8.8 kPa/m
2
1 10 10 103 104 80.1 kPa -26.4 kPa
[(1 + 61)/61]
20095.0 kPa 20197.0kPa
+80.1 kPa -26.4 kPa
Figure 5.8-3 Horner Plot
20 175.1 kPa 20170.6 kPa
In this example, the first pressure point recorded matches
the calculated pressure found by the Homer analysis. In
cases where the initial reservoir pressure is at static
conditions, a buildup analysis is not necessary. KB = The elevation of the drilling platform at the kelly
bushing.

88

s
ESTIMATION OFVOLUMES OFHYDROCARBONS INPLACE

Datum pressures for the two wells are 20 175 kPa and Ai = area of common pressure
20 171 kPa at 1467 m below sea level. 1\ = total reservoir area
Once a datum pressure has been determined for all wells Vi = volume ofcommon pressure
surveyed in a pool, it may be determined that the pres- V, = total reservoir volume
sures still vary from point to point. What must be found
now is the average reservoir pressure; three methods Example 3
are commonly used. The first is an arithmetic average. This example illustrates how to estimate the average
The second is an area-weighted average, where areas of reservoir pressure using the arithmetic, area-weighted
the reservoir that have similar pressures are grouped and volume-weighted methods.
together. The area-weighted average is the sum of the The porosity volume map in Figure 5.8-4 was found to
products of areas times pressures divided by the total have the volumes for the four constant pressure areas as
area. The third method is the volume-weighted aver- shown in the following table:
age. This method may utilize the rock volume, pore
volume or hydrocarbon pore volume. The following Calculation of Average Reservoir Pressure
equations summarize the three methods: Pressure Area Volume
Arithmetic average P = l:(P) / n (I) (kPa) (ha) (ha.m)
Area-weighted average P = l:(P i X AJ / A, (2) 20000 115 1404
Volume-weighted average P = l:(Pi X VJ / V, (3) 20050 179 4425
where P = average reservoir pressure 20100 155 I 930
Pi pressure point 20150 90 435
n = total number of points

20050 kPa
20000 kPa 20100 kPa
20080 kPa
20150 kPa


:20 120kPa

20040 kPa: 20060 kPa


:~20m
20000 kPa 20170 kPa

20130 kPa
.:

15 m

20175 kPa
20 140kPa:

20 090 kPa~.:-:-- ' - - - - - 5 m

20110 kPa

o I ha(lOOmx 100m) --- om

Area of 20 000 kPa pressure liS ha Volume of20 000 kPa pressure 1404 ham
Area of20 050 kPa pressure 179 ha Volume of 20 050 kPa pressure 4425 ha-m
Area of 20 100 kPa pressure ISS ha Volume of 20 100 kPa pressure 1930 ha-m
Area of20 150 kPa pressure 90ha Volume of 20 ISO kPa pressure 435 ham
Total area of pool 539 ha Total volume of pool 8194 ha-m

Figure 5.8-4 Porosity Volume Map

89

7
DETERMINATION OF OILAND GASRESERVES

Arithmetic Average Volume-Weighted Average


~(P,) = 20 000 + 20 040 + 20 060 + 20 080 ~(Pj x V) = (20000 x 1404) + (20 050 x 4425)
+ 20 090 + 20 110 + 20 120 + 20 130 + (20100 x 1930) + (20 ISO x 435)
+ 20 140 + 20 170 + 20 175 = 164359500kPaxhaxm
= 221 115 kPa V, = 8194haxm=81.94x 106m3
n = 11
p = ~(Pj x Vj)N,
P = ~(PYn = 221 115 kPa /11 = 164359500 kPa x ha x m / 8194 ha x m
= 20101 kPa = 20058 kPa
Area-Weighted Average It should be noted that in this case the arithmetic and
~(Pj x Ai) = (20000 x liS) + (20 050 x 179) area-weighted averages result in higher pressures than
+ (20 100 x ISS) + (20 ISO x 90) the most rigorous volume-weighted average.
= 10 817 950 kl'a x ha References
A, = 539 ha Homer, D.R. 1951. "Pressure Build-up in Wells."
p = ~(Pj x Ai)/A, Proc., 3rd World Petroleum Congress, E. 1. Brill,
= 10817 950 kPa x ha / 539 ha Leiden, Netherlands, Vol. II, p. 503.
= 20070 kPa

90

s
ESTIMATION OFVOLUMES OFHYDROCARBONS INPLACE

5.9 GAS FORMATION VOLUME PXV=nxRxT (2)


FACTOR
where P = pressure of gas in container
5.9.1 Introduction V = volume of gas in container
In order to determine the gas formation volume factor, n = moles of gas in container
Bg , which relates the volume of gas in the reservoir to R = gas constant
the volume at the surface at standard conditions of'tem- T = temperature 0 f gas in container
perature and pressure, it is necessary to fully understand 5.9.3 Gas Compressibility Factor
gas behaviour. This is explained in the four subsections The Ideal Gas Law may be used to calculate the
that follow. Often the terrns in the B g determination properties ofgases at moderate temperatures and press-
(Equation 15 in Section 5.9.5) are used directly in the ures; however, the law does not hold true at high
equation for calculating in-place gas volumes, but it is temperatures and pressures. To correct for the devia-
useful to have Bg as one term for hand calculations and tion, a term called the "gas compressibility factor"
simple material balance work. or "gas deviation factor," Z, must be included iri the
5.9.2 Ideal Gas Law equation.

Three properties affect the amount of gas in a reservoir: PXV=ZxnxRxT (3 )


pressure, P, temperature, T, and volume, V. The 19th
The gas compressibility factor is designed to correct the
century chemists, Boyle and Charles, found that for a
volume of a theoretical ideal gas to the volume occu-
given amount of gas (see Example 1) the following
pied by a real gas. This factor can be determined in the
relationship holds true:
laboratory by measuring the actual volumes of a given
P, X V, P, xV, amount ofgas at prescribed pressures and temperatures
= (I) and comparing these to the ideal volumes calculated by
T, T, the Ideal Gas Law. It should be noted that the compress-
where the subscript I signifies the first set of condi- ibility factor will change with temperature, pressure and
tions, and the subscript 2, the second set of conditions. gas composition.
Equation (l) assumes that the amount of gas in the In cases where the gas compressibility factor is not
system does not change, and that the gas behaves as an obtained from detailed laboratory work, it can be closely
ideal gas. estimated by first calculating two pseudo-critical prop-
erties that are used to determine the compressibility
Example 1
factor of a natural gas: pseudo-critical pressure and
A balloon has a volume of0.1 m 3 at 1000 kPa and 300K. pseudo-critical temperature. Both of these can be cal-
If the contents of the balloon are heated to a tempera- culated if the composition of the gas is known. Gas
ture of450 oK, either the pressure or the volume (or both) compositions are usually determined by gas chroma-
must change. In this case, it is assumed that both change, tography on gas samples; each component is expressed
so that the pressure is now 1200 kPa and the volume is as a mole fraction of the total.
0.125 m3 The pressures, volumes and temperatures at To calculate the pseudo-critical properties of a natural
both conditions would be related as follows: gas, the critical pressure and critical temperature of
all the components are needed. These values are avail-
1000 kPa x 0.1 m' 1200 kPa x 0.125 m' able in numerous publications, such as the Engineering
300'K 450'K Data Book (Gas Processors Suppliers Association,
1980). The pseudo-critical pressure of a gas is defined
In order to calculate the amount of gas in a closed as the sum of the products ofthe mole fraction of each
chamber of fixed volume, two more constants must be component times the critical pressure of that compo-
defined: the first is the moles of gas, which is essen- nent. The pseudo-critical temperature is the sum of the
tially the number of molecules of gas; the second is the products of the mole fraction of each component times
gas constant. The resultant equation is known as the Ideal the critical temperature of that component. The equa-
Gas Law and expressed as follows: tions for calculating the pseudo-critical properties are
as follows:

91

b
DETERMINATION OFOIL AND GAS RESERVES

P, = L(Xj x P;) (4) Gas Analysis


T, = L(Xj x T;) (5) Mole Critical Critical
Component Fraction Press. Temp.
where P, = pseudo-critical pressure
(kPa) (OK)
T, = pseudo-critical temperature
x j = mole fraction of component i Helium (He) 0.0012 227.53 5.23
P j = critical pressure of component i Nitrogen (N2) 0.0469 3399.00 126.10
T j = critical temperature of component i Methane (C1) 0.9322 4604.00 190.55
Ethane (C2) 0.0129 4880.00 305.43
Thomas et al. (1970) found that the pseudo-critical
properties may also be estimated using the specific grav- Propane (C3) 0.0045 4249.00 369.82
ity of the gas. The specific gravity, SG, is the ratio of iso-Butane (iC4) 0.0007 3648.00 408.13
the gas density to the density of air. n-Butane (nC4) 0.0009 3797.00 425.16
iso-Pentane(iC5) 0.0003 3381.00 460.39
P, = 4892.547 - (404.846 x SG) (kPa) (6)
n-Pentane (nC5) 0.0002 3369.00 469.60
T, = 94.717 + (170.747 x SG) (OK) (7) Hexane (C6) 0.0002 3012.00 507.40
Once the pseudo-critical properties are found for a Total 1.0000
given gas, the pressure and temperature of the gas
in the reservoir are needed to calculate the pseudo- Pc = L(xixPi) 4541.87kPa
reduced properties of the mixture. The pseudo-reduced T, = L(xi x Ti) 190.16K
pressure is the ratio ofthe actual pressure to the pseudo- P, = 6790 I 4541.87 1.49
critical pressure. The pseudo-reduced temperature is the
T, = 296 I 190.16 1.56
ratio of the actual temperature to the pseudo-critical
temperature. Z = 0.88 ( from Standing and Katz chart )
In compatison, if only the specific gravity were known,
P, = PIP, (8)
P, and T, would be estimated as follows:
T, = TIT, (9)
Specific gravity = 0.587
where P, = pseudo-reduced pressure P, = 4892.547 - (404.846 x 0.587) = 4654.902 kPa
P = pressure of natural gas system
T, = 94.717 + (170.747 x 0.587) = 194.945K
T, = pseudo-reduced temperature
P, = 6790 I 4654.902 = 1.46
T = temperature of natural gas system
T, = 296/194.945 = 1.52
Once the reduced properties ofthe natural gas at a given
pressure and temperature have been calculated, the gas Z = 0.87 ( from Standing and Katz chart)
compressibility factor can be determined by the use ofa
5.9.4 Sour Gas
gas compressibility factor chart (Figure 5.9-1) published
by Standing and Katz (In Standing, 1977). The gas com- Calculating Z using the method described works well
pressibility factor may also be determined by the use of for sweet gases-natural gases that do not contain
a computer algorithm (Dranchuk et al., 1977). carbon dioxide (C02 ) or hydrogen sulphide (H 2S).
Natural gases that do contain carbon dioxide and hy-
Example 2 drogen sulphide are called sour gases. Estimation ofthe
This example illustrates how to estimate compressibility gas compressibility factor of sour gases was found to
factor of natural gas from a southern Alberta gas well. be incorrect when using the chart published by Stand-
ing and Katz, and several methods have been developed
Well location: 02-03-004-05 W6M
to estimate the correct compressibility factor for sour
Formation: Bow Island
gases. Wichert and Aziz (1972) compared two of these
Initial formation pressure: 6790 kPa
methods to one that uses the Standing and Katz chart. It
Formation temperature: 296 K (23C)
was found that the chart could be used if the pseudo-
critical temperature and pseudo-critical pressure were
adjusted. An adjustment factor, e, was developed
by Wichert and Aziz to correct the pseudo-critical

92
ESTIMATION OFVOLUMES OFHYDROCARBONS INPLACE

Pseudo-reduced Pressure
a 1 2 3 4 5 6 7 8
1.1 1.1
Pseudo-reduced
Temperature
3,0
2,8
1.0 2.6 1.0
2.4 1.05
2,2 1.2
2.0
0.95
1.9
0.9 1.8

1,7

1,6

0.8 1.7
1,5

1.45

1.4
0.7 1.6
1.35
N N

-'"
..:
o
a

LL
0.6 1.25
1.3

,~
.. 1.5
..:
a
ti
'"
LL
>. >.
~
:c 1.2
,~
""
:c
'00 ,~ '00
en ~~
(fJ
<ll 0.5 1.4 <ll
\~
~ ~

0. 0.
E '/.~ E
a - a
U U

0.4 1.3

0.3 1.2

0.25
2.8
1.1 1.1
2.4 2. 6 2.'
2.2 Compressibility of
Natural Gas
'/.~ \.9
Jan. 1, 1941
1.0 1.0
1,1

0.9 0.9
7 8 9 10 11 12 13 14 15
Pseudo-reduced Pressure
Source: Standing, 1977.

Figure 5.9-1 Compressibility Factors for Natural Gases

93


DETERMINATION OF OIL AND GASRESERVES

properties. The factor may be determined graphically P, = :E(xi X P) = 6056.39 kPa


or by using the following equation:
T, = :E(xi X T) = 273.18 OK
e = 120 x (AO. 9 - A1. 6) + 15 X (B.5 - B4 ) (10) e = 120 x (0.37629 - 0.37621.6) +
where A = combined mole fraction of COz and 15 X (0.3003.5 - 0.3003 4)
HzS = 32.77
B = mole fraction of HzS
T,' = 273.18 - 5/9 (32.77) = 254.98 OK
The pseudo-critical temperature and pseudo-critical
pressure are estimated in the normal manner and then
6056.39 X 254.98
adjusted as follows:
Po' = 273.18 + 0.3003 (1-0.3003) X 5/9 (32.77)
(11) = 5574.83 kPa

P, = 34300/5574.83 = 6.15
r, x Te'
P' = (12) T, = 359/254.98 = 1.41
c T, + B x (1-B) x (5e/9) Z = 0.87 ( from Standing and Katz chart)
where T c' = adjusted pseudo-critical temperature In comparison, if the critical properties had not been
P,' = adjusted pseudo-critical pressure adjusted, the compressibility factor would have been
estimated to be 0.77, a difference of 11.5 percent. Use
Example 3
of the incorrect compressibility factor in estimating
The adjustments described are detailed in this example reserves would result in large errors.
of a sour natural gas well from the Foothills area of
Alberta. It should be noted that the compressibility factor
Well location: estimated is only correct at the pressure and tempera-
03-02-004-05 W6~
Formation: ture used in calculating the pseudo-reduced pressure and
Rundle
Initial formation pressure: pseudo-reduced temperature. When the compress-
34300 kPa
Formation temperature: ibility factor of a gas is required for material balance
359 OK (86C)
calculations, each pressure point requires that a corre-
Gas Analysis sponding compressibility factor be estimated.
Mole Critical Critical 5.9.5 Derivation of Gas Formation
Component Fraction Press. Temp. Volume Factor
(kPa) (OK) Gas formation volume factor, Bg relates the volume
Nitrogen (N,) 0.0104 3399.00 126.10 of gas in the reservoir to the volume on the surface at
Sulphide (HzS) 0.3003 9005.00 373.50 standard conditions of temperature and pressure and is
Carbon dioxide often used to simplify hand calculations ofgas reserves.
(CO z) 0.0759 7382.33 For the purpose of estimating reserves, B g is generally
304.19
Methane (Cl) 0.5277 expressed as the amount of space occupied at standard
4604.00 190.55
conditions by a unit volume of gas under reservoir con-
Ethane (C2) 0.0358 4880.00 305.43
ditions. The dimensions ofBg are unit volume at standard
Propane (C3) 0.0079 4249.00 369.82 conditions per unit volume at reservoir conditions, and
iso-Butane(iC4) 0.0018 3648.00 408.13 therefore, Bg is dimensionless.
n-Butane (nC4) 0.0041 3797.00 425.16
Derivation of Bg begins with the following equation
iso-Pentane(iC5) 0.0020 3381.00 460.39 for nonideal gases:
n-Pentane (nC5) 0.0022 3369.00 469.60
Hexcane (C6) 0.0059 3012.00 507.40 P,x V, P; x V;
Heptane + (C7+) 0.0260 2486.00 (13)
568.76 Z,T, Z;T;
Total 1.0000
where P" V" Z, and T s are all measured at standard
surface conditions, and Pi' Vi' Z, and T, are all
measured at initial reservoir conditions. Transposing

94

r
ESTIMATION OF VOLUMES OFHYDROCARBONS IN PLACE

tenus, Bg (as defined in this section) is derived as References


follows: Dranchuk, P.M., Purvis, RA., and Robinson, D.E.
1977. "Computer Calculation of Natural Gas
v vo Iume 0 f gas under Compressibility Factors using the Standing and
B = - ' = standard surface conditions Katz Correlations." Institute of Petroleum
g Vi per unit volume ofreservoir space Technology, IP-74-008, Vol. I.
Gas Processors Suppliers Association. 1980.
Engineering Data Book, Tulsa, OK.
(14)
Standing, M.B. 1977. "Volumetric and Phase
Behavior of Oil Field Hydrocarbon Systems."
Assuming that Vi is one unit volume ofreservoir space, SPE of AIME, Dallas, TX.
and that the gas compressibility factor, Z" at standard Thomas, H.K., Hankinson, RW., and Phillips, K.A.
surface conditions is unity, B g can be reduced to: 1970. "Determination of Acoustic Velocities of
Natural Gas." JPT, Vol. 22, pp. 889-895.
Wichert, E., and Aziz, K. 1972. "Calculate Z's for
(15) Sour Gases." Hydrocarbon Processing, May
1972.
B g may now be substituted into the equation for
calculating in-place volumes of nonassociated and gas
cap gas.

95
DETERMINATION OF OILANDGASRESERVES

5.10 OIL FORMATION VOLUME


FACTOR
2.10

2.00
B
od b(2.074)
_
'j
1:'0...)t..__ Differential liberation
~I.I.-1.1._ I
4 4 _ _.11.
5.10.1 Introduction
The formation volumefactor (FVF) for oil is defined as fi
1.90
I
the volume in cubic metres (barrels) that one stock tank
~

~
1.80

Bo1b ( 1 . 7 2 3 ) - / -
I
Flash Liberation
cubic metre (barrel) occupies in the formation at the l5 1.70

prevailing reservoir temperature and pressure. A stock


tankcubicmetre (barrel) is defined as the volume occu-
~ 1.60
Q)
/' ) I
5 /A :l
pied by one cubic metre (barrel) of crude oil at standard
pressure and temperature, which are 101.325 kPa and
~ 1.50

..
~ t 40 /
/ :g
~
A ;-
15C (14.65 psi and 60F) respectively. Crude oil in 1.30 ~
the ground always contains varying amounts of dis- !
a.
1.20 e
solved gas (solution gas). Because both the temperature
and the solution gas increase the volume of stock tank
oil in the formation, the FVF will always be greater than
1.10
1'"
1.00 - - - - - - , r - - - r - - , - - - - , - - . - - - - - ,
one. The symbol B, is used in equations to refer to the 1000 20003000 4000 5000 6000
Pressure (psig)
formation volume factor. Source: Chevron CanadaResources.

The reciprocal of the FVF is called the shrinkage


factor. Just as the formation volume factor is multiplied Figure 5.101 Comparison of Formation
by the stock tank volume to find the reservoir volume, Volume Factor by Differential and
the shrinkage factor is multiplied by the reservoir vol- Flash Liberation
ume to find the stock tank volume. Although both terms
are in use, most petroleum engineers use formation 5.10.3 Data Acquisition
volume factor. Before representative samples of the reservoir fluid are
collected, it is important that the well be properly con-
5.10.2 Data Sources
ditioned. A complete well conditioning and sampling
A laboratoryanalysis of fluid properties is the best source procedure is described in Chapter 5.6.
ofdata to estimate the FVF. It is preferable that the labo-
In most reservoirs, the variations in reservoir fluid
ratory analysis be made on a sample obtained during
properties among samples taken from different parts of
the completion ofthe discovery well, and that the sample
the reservoir are not large, and lie within the margin of
represent as nearly as possible the original reservoir
error inherent in the techniques of fluid sampling and
fluid. This will ensure that the original FVF is accu-
analysis. On the other hand, some reservoirs, particu-
rately determined with respect to the bubble point and a
larly those with large closures, have large variations in
decline in the bottom-hole pressure.
fluid properties, which may be explained by a combi-
Figure 5.101 shows the oil FVF in a typical high. nation of the temperature gradients, gravitational
gravity undersaturated oil reservoir when the reservoir segregation, and lack of equilibrium between the oil
pressure declines from the initial pressure to stock tank and the solution gas. Methods for handling reservoir
condition as determined from a laboratory analysis (the calculations where there are significant variations in the
symbols shown in this figure are defined in Example 2, fluid properties have been documented in the literature
Section 5.10.5.) (Cook et al., 1955; McCord, 1953).
The oil FVF can also be estimated from empirical
methods and correlations available from the technical 5.10.4 Data Analysis
literature (Amyx, 1960). A correlation prepared by Katz The composition of the stock tank oil will be quite
(1942) from data on mid-continent crudes requires the different from the composition ofthe original reservoir
reservoir temperature, and the pressure, gas-oil ratio, fluid. Most of the methane and ethane will have been
and API gravity ofthe crude. A second empirical correl- released from solution, and sizeable fractions of the
ation developed by Standing (1947) for California propanes, butanes and pentanes will have vapourized
fluids requires the total gas-oil ratio, the gravity of the as the oil moves from the reservoir to the stock tank
stock tank oil and produced gas, and the reservoir and the pressure is reduced. The change in liquid
temperature. composition is not a single nor a well-defined process,

96
1 ESTIMATION OF VOLUMES OF HYDROCARBONS IN PLACE

but is a series of flash and differential liberation own liberated gas but with additional gas produced
processes. from either the oil zone or a gas cap. In contrast the
The difference between these two processes is that in laboratory flash liberation is isothermal, and only the
the flash liberation process, all of the gas remains in gas liberated from the sample is in contact with the
contact with the liquid, while in the differential pro- liquid.
cess, some ofthe gas is released (removed from contact When the volume of dissolved gas in the crude oil
with the liquid phase). For this to be so, the volume of is low (indicating low volatility), there are only slight
the system in the flash process must increase as the pres- differences between the flash and differential liberation
sure declines. Thus the flash process is one of constant data. Under these circumstances the residual barrel by
composition and changing volume, and the differential the differential process may be identified with the stock
process is one of constant volume and changing tank barrel, and differential liberation data may be used
composition. directly in the oil-in-place equation. Experience indi-
In the case of reservoir fluids which are at their bubble cates that low volatility conditions may exist where the
point when the pressure declines as a result of produc- following are present: the stock tank gravity is below
tion, the gas liberated from the oil does not flow to the 30 API; the solution gas-oil ratio is less than 70 m 3/m3
well, but accumulates until a critical gas saturation is (400 scf/stb); and the reservoir temperature is below
reached. This critical saturation will be reached sooner 54C (130F). These are, of course, only approximate
in the vicinity of the well where the pressure is lower limits.
than at more distant points, particularly for wells pro- When the volatility of the crude is high, as in the
ducing under large pressure drawdowns. With gas example shown in Figure 5.10-1, more consideration
saturations greater than critical near the well, the gas should be given to the predominant gas liberation mecha-
will move more rapidly than the oil (differential libera- nism occurring in the reservoir, in the wellbore, and in
tion), whereas in the remainder of the reservoir the surface separation facilities. The FVF used may more
liberated gas will remain in contact with the oil (flash closely approach that of a flash liberation (Craft and
liberation). The volume ofthe reservoir surrounding the Hawkins, 1959).
producing wellbore, where the gas is highly mobile, is In a simple analysis, where only one FVF vs. pressure
usually only a small part ofthe total drainage area. Thus, relationship is used, industry practice tends toward us-
where there is a more moderate pressure decline below ing an estimated flash liberation relationship. It may be
the bubble point in the larger part of the reservoir, the argued that the flash process in the wellbore is the final
flash liberation is more representative. equilibrium that the oil and gas phases must adjust to.
On the other hand, when the gas saturation exceeds the Also, the pressure drop from bottom-hole pressure to
critical value in most of the drainage area, the gas will separator pressure often amounts to a large fraction of
flow much faster than the oil. This situation would be the total pressure decline from formation pressure. In a
characterized by producing gas-oil ratios considerably common industry compromise, the differential libera-
in excess of the initial solution gas-oil ratio. With the tion FVF curve is shifted by the ratio between the flash
removal of gas from contact with the oil, differential and differential liberation FVFs at the bubble-point
liberation more closely represents the reservoir behav- pressure (refer to Example 2 in Section 5.10.5).
iour. Consequently, differential liberation data should In reality, however, each producing system is different
be applied to the reservoir fluid when the reservoir pres- and each should be examined closely to determine where
sure has dropped considerably below the bubble-point the major pressure drops are occurring. In some cases,
pressure and the critical gas saturation has been exceeded further testing and facility modelling may be warranted
in most of the reservoir. in order to maximize liquid production. Figure 5.10-1
Flow through tubing and a choke is a declining- shows the FVF calculated by both the flash and differ-
pressure flash liberation in which the gas remains in ential processes for a more volatile crude oil having a
equilibrium contact with the oil throughout the process. gravity of 46.6 API. The difference between these two
There are, however, important differences between curves is significant. This example helps to illustrate
tubing flash and laboratory flash liberation. Tubing the variability of FVFs, and the importance of under-
flash liberation is accompanied by declining temper- standing the impact of each liberation process in the
atures and, where the gas-oil ratio exceeds the initial producing system.
dissolved ratio, the oil is in contact not only with its

97

.iII? _
...
DETERMINAnON OF OIL AND GAS RESERVES

5.10.5 Data Adjustment for oil compressibility. This is done by adjusting the
In the calculation of a flash FVF, it is often necessary to measured volume at saturation pressure using the
adjust the data from a laboratory fluid analysis to more following equation:
appropriately represent the true producing conditions. adjusted B, = B ofbx VIV s t (I)
Normally, flash separation data in a laboratory analysis where adjusted B, = flash formation volume factor
is referenced to reservoir fluid volumes at the sat- for pressures above saturation
uration pressure (bubble point). The following two pressure
examples show how the data from a reservoir fluid study
is used to calculate the flash FVF for producing reser-
= formation volume factor from
flash at saturation pressure
voir conditions. The data is provided in Tables 5.10-1,
5.10-2 and 5.10-3. VIV s. , = relative volume from pressure
volume relations at pressure
'Table 5.10-1 Pressure Volume Relations above saturation pressure
For example, if the reservoir pressure is 27 600 kPa
Pressure Relative Volume * (4000 psig),
(psig) VNt then VIV sat = 0.9750 (Table 5.10-1)
6000 0.9398 B ofb = 1.723 (Table 5.10-2)
5500 0.9473
and adjusted B, = 1.723 (0.9750) = 1.680
5000 0.9556
4500 0.9648 Example 2: At Pressures Below Bubble Point
4000 0.9750
3500 0.9867 Because oil shrinkage occurs due to gas liberation at
3300 0.9921 pressures below the saturation pressure, flash FVFs that
3200 0.9949 are referenced to a volume at saturation pressure must
3100 0.9979 be corrected to reflect this shrinkage. The adjustment is
3029 1.0000 made using the following equation:
3010 1.0027 BOlli
2993 1.0051 adjusted n, = Bod
,
B cdb
(2)
2982 1.0067
2948 1.0117 where adjusted B, = flash formation volume factor
2773 1.0408 for pressure below saturation
2571 1.0805 pressure
2333 1.1404 = relative oil volume from differ-
2098 1.2206 ential liberation at pressure
1849 1.3309 below saturation pressure
1622 1.4717 = formation volume factor from
1390 1.6732 flash at saturation pressure
1298 1.7740
= relative oil volume from differ-
Source: PVT Analysis by Core Laboratories - ential liberation at saturation
Canada Ltd., on Chevron Pembina 1-9-50-12 W5M. pressure
Chevron Canada Resources, File 7013-795. For example, if reservoir pressure is 14500 kPa (2100
"Relative volume is in barrels at the indicated psig),
pressure and temperature per barrel of saturated oil. then Bod = 1.767 (Table 5.10-3)
B ofb = 1.723 (Table 5.10-2)
Example 1: At Pressures Above Bubble Point B odb = 2.074 (Table 5.10-3)
Flash FVFs are normally referenced to a volume at . 1.723
and ad[usted B o = 1.767 x - - = 1.468
saturation pressure. At pressures above the saturation 2.074
pressure, the flash FVF must be corrected to account

98

5
ESTIMATIONOF VOLUMES OFHYDROCARBONS IN PLACE

Table 5.10-2 Separator Tests of Reservoir Fluid Sample

Separator Separator Gas-Oil Gas-Oil Stock Tank Formation Separator Specific


Pressnre Temperature Ratio! Ratlo! Gravity Volume Volume Gravity of
(psig) (OF) (OAPI60F) FactorJ Factor" Flashed Gas

reservoir
to 320 74 795 891 - - 1.121 0.725
to 0 74 288 290 46.6 1.723 1.007 1.226

Source: PVT Analysis by Core Laboratories - Canada Ltd., on Chevron Pembina 1-9-50-12 W5M. Chevron Canada
Resources, File 7013-795.
'Cubic feet of gas @ 60F and 14.65 psia per barrel of oil @ indicated pressure and temperature.
2Cubic feet of gas @ 60F and 14.65 psia per barrel of stock tank oil @ 60F.
3Barrels of saturated oil @ 3029 psig and 228F per barrel of stock tank oil @ 60F.
"Barrels of oil @ indicated pressure and temperature per barrel of stock tank oil @ 60F.

Table 5.10-3 Differential Vapourization

Pressure Relative Oil Relative Total Solution Gas-Oil Gas Formation Gas Expansion
(psig) Volume! Volume- Ratio! Volume Factor" FactorS

3029 2.074 2.074 1634


2700 1.947 2.184 1406 0.00568 170.65
2403 1.852 2.326 1231 0.00660 151.52
2100 1.767 2.533 1071 0.00764 130.89
1801 1.695 2.818 934 0.00901 110.99
1502 1.627 3.249 805 0.01098 91.07
1202 1.565 3.905 685 0.01384 72.25
900 1.504 5.080 568 0.01884 53.08
598 1.442 7.481 452 0.02882 34.70
300 1.363 14.802 318 0.05791 17.27
0 1.088 - 0 1.32043 0.757

Source: PVT Analysis by Core Laboratories - Canada Ltd., on Chevron Pembina 1-9-50-12 W5M. Chevron Canada
Resources, File 7013-795.
I Barrels of oil at indicated pressure and temperature per barrel of residual oil at 60F (Bg),

2Barrels of oil plus liberated gas at indicated pressure and temperature per barrel of residual oil at 60F (BJ.
3Cubic feet of gas at 14.65 psia and 60F per barrel of residual oil at 60F CR,).
4Cubic feet of gas at indicated pressure and temperature per cubic foot at 14.65 psia and 60F (B g) .
sCubic feet of gas at 14.65 psia and 60F per cubic foot at indicated pressure and temperature: \lgas FVF (\lB g) .

99
DETERMINATION OFOILAND GASRESERVES

5.10.6 Summary References


Production from the reservoir rock to the stock tank Amyx, J.W., Bass, D.M., and Whiting, R.L. 1960.
usually involves a combination of flash and differential Petroleum Reservoir Engineering. McGraw-Hill,
liberation processes. In determining a value for the oil New York, NY, pp. 429-435.
formation volume factor, the overall flow process of Cook, A.B., Spencer, G.B., Bobrowski, F.P., and
the oil stream should be analyzed to determine where Chin, T. 1955. "A New Method of Determining
the major pressure drops occur and what weighting Variations in Physical Properties of Oil in a
should be given to the flash and differential FVFs. If Reservoir, with Application to the Scurry Reef
the volatility of the crude oil is high, there may be a Field, Scurry County, Texas." US Bureau of
significant difference between the values of the FVF Mines Report, Feb. 1955.
determined by the flash and differential processes
Craft, B.C., and Hawkins, M.F. 1959. Applied
(Figure 5.10-1). In such cases, the true FVF may more
Petroleum Reservoir Engineering. Prentice-Hall,
closely approach the flash liberation process. If the
Inc., Englewood Cliffs, NJ, pp. 86-181.
volatility ofthe crude oil is low, only slight differences
between the flash and differential data are likely, and Katz,D.L. 1942. "Prediction of the Shrinkage of
use of the differential liberation data may be feasible. Crude Oils." Drilling and Production Practice,
Future changes in producing procedures should also American Petroleum Institute, Vol. 137.
be considered in making any assessment of the oil McCord,D.R. 1953. "Performance Predictions
formation volume factor. Incorporating Gravity Drainage and Gas Cap
Pressure Maintenance - LL-370 Area, Bolivar
Coastal Field." Trans. AIME, Vol. 198, No. 232.
Standing, M.B. 1947. "A Pressure-Volume-
Temperature Correlation for Mixtures of
California Oils and Gasses." Drilling and
Production Practice, American Petroleum
Institute, Vol. 275.

100
ESTIMATION OFVOLUMES OF HYDROCARBONS INPLACE

5.11 QUALITY AND RELIABILITY OF 3. Core plugs represent extremely small samples of
DATA AND RESULTS the reservoir rock and may provide higher or lower
permeabilities than might be obtained if it were
5.11.1 INTRODUCTION possible to use much larger samples, particularly in
The quality and reliability of reservoir data reflect heterogeneous reservoirs or reservoirs characterized
directly on the results obtained in preparing reserves by vuggy porosity. In such cases, permeabilities de-
estimates. As indicated in preceding sections, the con- rived from well production characteristics and
ditions under which basic data are obtained and the pressure measurements may be more representative
laboratory methods used to generate additional data are of in situ reservoir conditions.
both important elements that must be taken into consid- As a general rule, the larger the sample, the better the
eration. Elementary reasoning and common sense are reservoir representation.
also important elements in the process of preparing
As previously mentioned, however, if the core was
reserves estimates.
oriented when it was originally cut, the k.nax and k"o
In the determination of reservoir rock properties and permeabilities have greater importance and can be
fluid saturations, it is common practice to rely on core related to actual directions in the reservoir.
data as the reference point and to fit log analysis data to
In cases where clays contained in sandstone core samples
it. Consequently, the core data must reflect to the great-
have been dehydrated during the cleaning procedure,
est degree possible the in situ conditions ofthe reservoir.
Because of cost considerations, it is usually not poss- erroneously high values may be measured for both k.nax
ible to obtain cores under preferred conditions, such as and ~o permeabilities.
specifically prepared oil base muds, lease crudes, and Glaze may be created by core bit action, particularly on
oriented, pressurized, or sponge coring techniques. Thus, limestone cores, and may obscure variations in core
in most circumstances, conventional cores comprise the characteristics during visual inspection and result in
best data available. unrepresentative sampling and in permeabilities that are
much too low. Sandblasting is commonly used to re-
5.11.2 Permeability from Cores move the glaze during sample preparation. Logs should
Permeability is a particularly important measurement be consulted during the sample selection procedure.
obtained from cores because it provides an indication
of whether hydrocarbons may be effectively produced
5.11.3 Porosity from Cores
from intervals of interest. The reliability of the perme- Porosity measurements made on core samples are less
ability measurements can be influenced by the coring subject to error than permeability measurements. How-
procedure (induced fractures or scale formation), weath- ever, incomplete cleaning during laboratory plug
ering and storage effects, plug sample selection, preparation may result in erroneously low porosity mea-
preparation in the laboratory, and the measurement surements. The laboratory techniques used to measure
techniques applied. Conventional core analyses are per- core porosities may affect the accuracy of the results.
formed without the application ofsimulated overburden Table 5.4-I in Section 5.4.2 provides a comparison of
pressure, and horizontal permeabilities are measured in techniques.
two directions at 90 to each other. The highest mea- Since most laboratory porosity measurements are
sured permeability is designated as "k.n,," and the other obtained at surface conditions, the porosities are gener-
as "~o'" A practical approach in most situations is to ally higher than in the reservoir, particularly in poorly
assume that the ~o measurements more closely repre- consolidated sandstones, unless compressibility tests
sent the in situ reservoir permeability than the k.nax are conducted to provide reduction factors to allow
readings for the following reasons: for overburden pressures.
I. Small fractures induced during the coring proce- It is worth repeating that the quality of the results
dure may result in an excessively high k m ax' obtained from core analyses is directly related to the
particularly in limestones and dolomites. quality and condition of the core when it reaches the
2. Lack of overburden pressure usually results in laboratory. Therefore, in cutting and retrieving the core,
high k.nax and ~o readings, particularly in poorly precautions must be taken to preserve, as much as pos-
consolidated sandstones. sible, the conditions that exist downhole in the reservoir.
Cutting and retrieval of core to surface results in re-
moval of overburden pressure, introduction of drilling

101

2
DETERMINATION OF OIL AND GASRESERVES

fines, and modification of clays, all of which can affect about pore structure that can be related to connate water
porosity measurements. saturations. The results should be used with caution since
the studies are generally performed on weathered core
5.11.4 Saturations from Cores that has been cleaned and resaturated with other fluids.
Because ofthe coring and retrieval procedures used for The results may differ considerably from those obtained
conventional cores, most laboratory saturation measure- from work on oil core using the Dean Stark extraction
ments obtained are unreliable. At best, the oil saturations technique.
obtained may provide a preliminary indication of what The wettability of reservoir rock is another important
residual oil saturations might be after waterflooding. The consideration that is often difficult to assess and may
water saturation measurements are usually meaningless. be altered by coring procedures, surface handling, and
On the other hand, saturations measured on properly laboratory techniques. Generally speaking, the major-
preserved core obtained under well-controlled field and ity of reservoir rock encountered in the western Canada
reservoir conditions can give reliable results. . sedimentary basin is considered to be preferentially
Oil-base cores normally provide reservoir samples that water-wet. However, the term "wettability" is the sub-
should provide accurate measurements of connate ject of much debate and is somewhat misleading in that
water saturations. The coring fluid is usually lease crude it implies that it is a property ofthe reservoir rock that
or a specially prepared drilling mud that contains weight- determines whether it is water-wet or oil-wet. Some
ing material and only very small amounts of water in parties hold that wettability of a reservoir rock depends
emulsion form. The following steps are necessary to on which fluid saturated the rock first. Others contend
ensure that uncontaminated core is obtained: that wettability is a function of the rock, water, and hy-
I. Set casing and cement to a point immediately above drocarbon properties and their associated oxygen-carbon
the target interval to ensure that the drilling fluid chains. In fact, most ofthe hydrocarbon reservoirs were
does not become contaminated with uphole fluids. initially deposited under marine environments where
2. Keep coring fluid in a closed system to prevent water the initial saturating fluid, water, was subsequently
from being introduced inadvertently. partially displaced by hydrocarbons.
3. Analyze samples ofthe drilling fluid for water con- 5.11.5 Effective Porous Zone and Net
tent at regular intervals during the coring procedure. Pay from Cores
4. Avoid penetration of any underlying aquifer. Effective porous zone and effective net pay refer to that
5. Preserve recovered core in lease crude, or suitably portion of the porous reservoir rock that has sufficient
protect it from exposure to the atmosphere until it permeability to permit the flow of reservoir fluids.
is ready for analysis in the laboratory. Porous rock, with permeability below a certain mini-
mum level in conjunction with capillarity and relative
In Alberta, the Energy Resources Conservation Board
permeability, will not allow the flow ofreservoir fluids,
(1993) publishes each year an updated PVT and Core
at least at rates significant in terms of production eco-
Studies Index, which is useful in identifying the reser-
nomics. These minimum permeability levels may differ
voirs that have had special core studies performed.
depending on the production mechanism under consid-
However, caution should be used in selecting core analy-
eration. In other words, effective net oil pay under a
ses and special studies from this index since some cores
depletion drive mechanism, where expansion of reser-
identified as being obtained with oil-base muds were
voir fluids is the driving force, may be greater than under
not obtained under properly controlled conditions.
a waterflood, where the water displacing the oil tends
Frequently the muds used were oil-water emulsion muds
to follow the path of least resistance and may by-pass
containing high proportions of water.
low permeability reservoir rock. In practice, the con-
Another useful source of connate water saturation nate water saturations related to minimum permeability
data and relationships derived from oil-base core levels tend to be in the range of 50 to 60 percent.
analyses relating to reservoirs in the western Canada
Special core studies and conventional core analyses
sedimentary basin is available in a paper published
should be used to establish cutoffs of permeability and
by Buckles (1965).
porosity below which the reservoir is considered
In instances where suitable oil-base cores are noneffective for specified depletion and production re-
unavailable, capillary pressure studies are performed on gimes such as solution gas drive, water displacement,
samples of conventional core to determine information gas displacement, or miscible displacement. Once

102

s
ESTIMATION OF VOLUMES OFHYDROCARBONS IN PLACE

these cutoffs have been established from core Conductive minerals in the reservoir rock
data, correlations (cross-plots of water saturation
Selection of coefficient "a", cementation exponent
vs. permeability, water saturation vs. porosity, and "m "an d ' exponent "n"
saturation
permeability vs. porosity) with porosity logs may be
Resistivity of the formation water
developed, thereby permitting a relatively uniform and
consistent approach to the selection of effective porous With regard to formation water resistivities, care should
intervals and effective net pays throughout a given res- be taken to use measurements from samples considered
ervoir. This approach provides a logical and reliable to be representative of reservoir water uncontaminated
basis for the creation of effective porous zone maps and by drilling mud filtrate. Water resistivities determined
net pay maps. Cutoffs that have been selected arbitrarily from log calculations over known wet intervals should
and applied inconsistently throughout a reservoir can be compared to those determined from water analyses
lead to unrealistic estimates of in-place hydrocarbons, wherever possible.
ultimate recoveries, and costly mistakes in reservoir 5.11.8 Effective Porous Zone and Net
management.
Pay from Well Logs
In reservoirs where core information is unavailable, log As earlier discussions have stressed, the determination
porosity cutoff values may be determined from core of realistic cutoff levels for permeabilities and porosi-
information using nearby reservoirs as models or by ties are critical to the selection oftruly effective porous
applying generally accepted porosity cutoffvalues from zones and net pay from well logs. Errors in determining
the reservoir rock under consideration (2 to 4 percent effective net pay may introduce order-of-magnitude
for carbonates; 7 to 10 percent for sandstones). These errors in estimates of effective hydrocarbons in place
porosity cutoffs are based on experience that shows that
and thus lead to costly consequences, particularly in the
the corresponding horizontal permeability cutoffs are planning and implementation of enhanced recovery
in the range of 0.5 to 1.0 mD, with the lower end of the schemes.
range used for gas reservoirs and the higher end for oil
It is important to use all the data available to ensure the
reservoirs. It should be noted that these cutoffs are
reliability of results. For instance, in situations where
related to measurements made on unstressed core.
core information is lacking, correlation of mud cake
5.11.6 Porosity from Well Logs build-up on caliper logs can give a good indication of
It is important to calibrate porosity logs using core data the sections of the reservoir that have effective perme-
wherever possible since good core-derived data are gen- ability and can be used in conjunction with porosity logs
erally considered to provide the best benchmarks. to select effective net pay.
Cross-plots of log information should be used exten- In summary, it cannot be emphasized too strongly that
sively in order to better characterize porosity. realistic cutoffs ofhorizontal permeability and porosity
Uncertainty in the detailed mineral composition of the should be used in determining effective porous zone and,
reservoir rock and borehole rugosity can result in ap- in conjunction with water saturations, net pays from
parent log porosities that are much different than the cores and well logs. Unless unusual reservoir conditions
true effective porosities. Bitumen and pyrobitumen con- exist, such as the presence of large concentrations of
tained in reservoir rock can greatly reduce effective clays, horizontal permeability and porosity cutoffs gen-
porosity with contents ranging up to 30 percent of pore erally correspond to connate water saturations greater
space in some reservoirs. The analyst should be atten- than 50 to 60 percent. Based on empirical determina-
tive to all indications of the presence of bitumen and tions derived from unstressed core measurements,
pyrobitumen and should make it a point to scrutinize generally accepted (minimum) cutoffs are as follows:
well cuttings and core descriptions for evidence oftheir Horizontal air 1.0 mD (medium to high gravityoils)
presence. permeability 0.5 mD (wet gas)
0.1 mD (dry gas under special
5.11.7 Water Saturations from Well Logs circumstances)
Water saturations determined from well logs may be Porosity 2 to 4 percent (carbonates)
influenced by the following: 7 to 10percent (sandstones)
Thin beds (averaging effect ofresistivity tools due to 26 to 28 percent (heavyoil in
lack of vertical resolution) sandstones)
Watersaturation 50 . 60 percent

103

7
DETERMINATION OFOIL AND GAS RESERVES

The cutoffs selected for a given oil reservoir may vary 5.11.12 Reservoir Temperature
widely depending on the type of depletion mechanism The most reliable source of reservoir temperature data
being contemplated. Fracture porosity in certain gas is a bottom-hole temperature taken with a continuous
reservoirs may justify the use of lower porosity cutoffs recording subsurface temperature gauge under stabilized
(0.25 to 2 percent). bottom-hole conditions, preferably in conjunction with
5.11.9 Drillstem Tests a static bottom-hole pressure measurement. Other meth-
ods, such as using maximum reading thermometers
The drillstem test provides an indication of the fluids
during testing or logging operations, are considered to
contained in a reservoir, a measure of the flow charac-
be less reliable.
teristics, and a reading of the reservoir pressure. The
reservoir pressures measured during a drillstem test may Small variations in bottom-hole temperature, when
be used to assess the quality and reliability ofthe test as converted to absolute temperature, generally result in
follows: only a very small percentage error in the overall reserves
estimates; nonetheless, care should be taken to obtain
1. The hydrostatic pressures measured should be
the best measurements possible.
checked to ensure that no significantpressure change
took place during the test. Any significant change As a general rule, temperatures measured in wells will
in hydrostatic pressure would indicate that a proper tend to understate true reservoir temperature because
packer seal had not been obtained and that the zone temperature equilibrium has not yet been reached in the
being tested was not properly isolated from the wellbore. However, in certain situations such as in
wellbore fluid column. shallow wells on warm days, maximum reading ther-
mometers may reflect the high atmospheric temperature
2. The pressures measured on different gauges should
on the day the measurement was made.
be checked for consistency, particularly when more
than one gauge is run at any position. Charts should 5.11.13 Reservoir Pressure
be checked for evidence of tool plugging by com- Accurate static reservoir pressures are extremely
paring inside and outside gauge pressures. important in the determination ofhydrocarbon reserves.
5.11.10 Production Tests The accuracyof the measurements is a function of the
following:
Good production tests are a function of the objectives
of the test and the test design, as well as the reliability The type of measurements being made: surface or
of the equipment used. From the design viewpoint, it is bottom-hole
wise to use two downhole pressure recorders so that The reliability of the recorders used for pressure
comparisons can be made to check for consistency. Sur- measurements
face and bottom-hole pressures should be compared, and The duration of the shut-in period
any fluid level changes should be noted during build-
Bottom-hole measurements are considered to provide
ups. Flow rates should be of sufficient duration to permit
more reliable measurements of reservoir pressure than
stable conditions to be reached. Generally, when the
surface measurements, which must then be extrapolated
objective is to determine static reservoir pressure,
to bottom-hole conditions. Usually tandem recorders are
buildup times should be at least twice as long as the
run to allow comparisons and verification of the
preceding flow rates.
accuracy of the measurements as well as to ensure that
5.11.11 Reservoir Fluid Samples at least one pressure is obtained should one of the
recorders fail.
The sampling equipment and procedures are of utmost
importance in obtaining representative reservoir fluid The duration of the shut-in period is critical in obtain-
samples. Care must be taken to prevent contamination ing reliable pressure information and should be a
of the samples by ensuring that the sample containers function of the quality (permeability) of the reservoir
are properly purged prior to sampling. Special contain- rock and the fluids that occupy it. The poorer the reser-
ers should be used when collecting gas samples voir quality and the higher the viscosities of the
containing hydrogen sulphide. Proper well condition- occupying fluids, the longer the shut-in period.
ing prior to obtaining subsurface oil samples is
important, especially when more than one fluid phase
is present in the wellbore.

104

s
ESTIMATION OFVOLUMES OF HYDROCARBONS INPLACE

5.11.14 Gas Compressibility Factor 5.11.17 Interrelationships


Reliable gas compressibility factors are dependent on The interrelationships and interdependencies of the
the quality ofthe gas analyses being used and how rep- various parameters are important in arriving at reliable
resentative they are of the reservoir fluids. Since a estimates of in-place volumes. Ifthe sources ofthe data
compressibility factor is only correct at the pressure and are reliable, then the quality of the resulting estimates
temperature used in the estimation, it is important to can be improved by a consistent approach in the selec-
use reservoir pressure and temperature data of accept- tion ofparameters. For example, in a particular reservoir
able quality. With gases containing carbon dioxide or where reliable oil core data are available, water satura-
hydrogen sulphide, large errors can be introduced into tions can be plotted vs. porosities and vs. horizontal
the reserves estimates if the appropriate sour gas corr- permeabilities. In tum, porosities can be plotted vs. hori-
ections are not made in estimating gas compressibility zontal permeabilities. Minimum porosity and horizontal
factors. permeability cutoff values can then be selected that are
consistent with a selected water saturation cutoff value,
5.11.15 Formation Volume Factor say 50 percent. The porosity and horizontal permeabil-
The quality and reliability of formation volume factor ity cutoffs established from the oil core data can then be
data are dependent upon whether or not the reservoir applied to conventional core data. The combined core-
fluid samples from which the data were obtained are derived information can then be used to calibrate well
truly representative of reservoir conditions. Proper logs and additional interrelationships established
selection of flash vs. differential formation volume fac- through the use of further cross-plots. This approach
tors is required to best represent reservoir mechanisms. ensures that the data derived from one source is
consistent in its application with data from another
5.11.16 Material Balance
source.
Errors in material balance calculations generally fall into
Not only does interrelating the various parameters
the following categories:
introduce consistency to the estimates of in-place vol-
I. Thermodynamic equilibrium not attained in actual umes, it also provides a sound basis for the application
field conditions of recovery factors. Care should be taken to ensure that
2. PVT data obtained using liberation processes that the applied recovery factors are consistent with the in-
do not represent reservoir condition mechanisms place volumes and cutoff values used. For example,
3. Inappropriate average pressures negotiated in-place volumes, such as those resulting from
unitization negotiations, should be used with great cau-
4. Uncertainty in the material balance "m" ratio
tion since they are not necessarily an accurate and
5. Inaccurate production data consistent representation ofthe reservoir.
6. Inability to recognize the presence of an exterior
source of energy, such as an aquifer References
The amount of pressure decline covered by the Buckles, R.S. 1965. "Correlating and Averaging
production history is one of the best criteria in gauging Connate Water Saturation Data." JCPT, Jan. -
potential errors. The material balance is a comparison Mar. 1965, pp. 42-52.
of voidage to expansion. It concentrates on evaluating Energy Resources Conservation Board. 1993. PVT
fluid expansion. Large pressure declines produce large and Core Studies Index. Guide G 14, Calgary, AB.
expansions, making inaccuracies in production volumes
relatively less significant. Similarly, pressure errors are
less critical with more pressure depletion. In general, a
pressure decline of 10 percent of the original reservoir
pressure is needed before the material balance becomes
reliable. This critical depletion level is highly depend-
ent upon the quality of pressure, production, and PVT
data.

105

7
Chapter 6

PROBABILITY ANALYSIS FOR ESTIMATES OF


HYDROCARBONS IN PLACE

6.1 INTRODUCTION between the agreed-to perceptions and reality, and thus
Chapter 5 has addressed the importance of, and the introduce the potential for unfortunate consequences.
challenges involved in, obtaining accurate and reliable The single-value approach presents some organizational
measurements from samples. This in itself is difficult disadvantages as well. In order to arrive at the "right"
enough, but there is a "fact of life" in the petroleum number there are only three ways to handle differences
industry that further complicates the volumetric estima- of opinion:
tion procedure: petroleum reservoirs are heterogenous, I. Some people have to concede they are wrong,
so parameter values vary from sample to sample even despite evidence that suggests they might be right.
when they are correctly measured. The variation might
2. The group goes into an endless analysis mode and
be handled by using many sample measurements and
never determines the "right" answer.
statistical techniques, but the cost of obtaining samples
is so expensive that there can never be even close to a 3. Dissenting opinions are overruled and ignored.
sufficient number of samples. This could hardly be called good team building-
To gain an appreciation for the magnitude of the imagine the confrontations generated and the feelings
shortfall, imagine trying to predict the outcomes of of the participants! Is it appropriate that, after a certain
political elections from the opinion of one voter. If this amount of discussion, the debate is often adjudicated at
sounds ludicrous, it is; yet a one voter sample is a larger a higher level of the organizational heirachy? The po-
percentage of the total population than the reserve esti- tential for bias in the assessment likely increases as the
mator can realistically hope for. Several approaches to debate proceeds to higher-authority levels, because each
this dilemma have been tried over the years and each successive level is less familiar with the technical de-
has its shortcomings. This chapter is about searching tails, but more cognizant of the impact that a particular
for a better way. number will have on current plans and operations. Some-
times there may even be personal implications, as with
Industry's historical approach has been to "guesstimate"
management whose performance assessment is directly
a single best value for each parameter, resulting in a
linked to the reserves booked for the year, or the con-
single value for the volumetric estimate. This sounds
sultant whose opportunities for further work may depend
easy until it is tried. There is never enough information
directly on the magnitude of the reserve estimate.
to justify the selected value. Getting a second opinion
does not help because no two people will calculate the A final criticism of the single-value approach is that at
same volumetric number, and some data will exist to the conclusion of the exercise the participants are
support and contradict both. Thus two technically com- expected to be fully committed to the resulting deci-
petent people can have very different opinions and either sions and to work together to implement them. This is
or both could be right or wrong. not a reasonable expectation for a process that is essen-
tially adversarial as winners and losers seldom work well
The industry's current practice of multi-disciplinary
together.
group or team decision-making compounds the prob-
lem because the multiple opinions will almost certainly In spite of the high organizational costs and the low
be different. Achieving group consensus is rarely pos- probability of achieving a reliable, accurate estimate,
sible because no "right" answer can be determined, and the single-value approach is still used. A plausible
even consensus does not guarantee truth; in fact, it can explanation is that the industry is unaware of a better
provide a false sense of security that may collectively alternative. Other approaches have been tried over the
lead all those involved into subsequent contradictions years, including those listed in Table 6.1-1. Of the

106

S'
PROBABILITY ANALYSIS FOR ESTIMATES OFHYDROCARBONS IN PLACE

approaches listed, the Warren Method is the most work- The Warren Method is simple enough that it can be used
able, but it is not widely used at the present time. The on a personal computer or even a hand-held calculator,
method was developed by a pioneer in the application and successive iterations are actually easier to perform
of probabilistic methods to the oil industry, Dr. Joseph than the initial calculation. These features enable the
E. Warren (1988). It works because it: focus to be on the quality of the input data rather than
Is applicable to volumetric theory on the arithmetic, and they encourage its use. In addi-
tion, the method can be extended to provide reserve and
Provides a means to deal effectively with varying
net present value estimates, while dry-hole risk can be
amounts of indirect data that may, at times, seem
accommodated in the pre-drilling evaluations.
overwhelming in volume but are always incomplete
and insufficient to support a purely statistical analy- 6.2 WARREN METHOD THEORY
sis, or justify a single number as the right answer The Warren Method is based on the following
Quantifies the uncertainty in the estimate by separat- combination of theory an~ assumptions:
ing the range ofprobable values from the much larger I. It has been proven that the product of unimodal
range of possible values random variables is log-normally distributed as the
Is applicable to all stages of evaluation, from initial number ofvariables approaches infinity (Aitcheson
assessment of basin potential to individual pool and Brown, 1966, Theorems 2.8 and 2.9), and that
development the product oftwo or more log-normal distributions
Is sufficiently flexible to incorporate all the avail- is a log-normal distribution (Theorems 2.2 and 2.3).
able data, which can differ for every pool and at each This theory and its application in analogous
evaluation stage situations, plus the tests on artificial samples,
Is quick, easy and inexpensive to use suggest that the volumetric hydrocarbon-in-place
estimate may be approximated as a log-normal

Table 6.1-1 In-Place Volumetric Estimation Techniques

Methodology Comments

Single-Value Estimate No satisfactory way to select the "right"value for each parameter in the volumetric
equation. No way to resolve differing opinions on prospect potential. Cannot quantify
uncertainty in in-place estimate nor the probability of occurrence.
Absolute Minimum! Consistent use of minimum!maximum parameter values to calculate absolute minimum!
Maximum Value Approach maximum hydrocarbonsin place yields a minimum value that is uneconomic and a
maximum value that is too good to be true. Range is too large to be of practical use. No
way to separate range of probable values worth considering from the much larger possible
value range.
Statistical Analysis Generally insufficient samples to develop in-place distribution for the total population
from the sample population. Drilling best prospects first biases sampling, yielding
optimistic predictions if sample results are extrapolatedto total population. Sufficient
samples for a play are usually available once the explorationist has run out of prospects.
For a given pool, they are available after the pool has been developed. The timing is
unacceptable for both.
Monte Carlo Computer Developmentof in-place probability distribution is a significant advancement over
Simulation previous methods. The dilemma is how to model parameter distributions. Development
of in-place distribution from multiple single value calculations is computer-intensive and
time-consuming. The method tends to be too cumbersome to accommodate iteration
requests and time constraints.
Warren's Probability Yields similar solutions as Monte Carlo computer simulation in less time and at lower
Analysis costs.

107
DETERMINATION OFOILANDGASRESERVES
---
distribution because it is the product of successive maximum error of 2.05 percent in the tests, while
multiplications. The characteristics of the average absolute and maximum errors for the vari-
hydrocarbon-in-place (HCIP) distribution may ance were 2.2 percent and -7.5 percent respectively.
be calculated from the moments of the parameter The recommendations balance the need for accu-
distributions as follows: racy with the need for simplicity in the estimation
procedure. In particular, a formula utilizing the mode
M, (HCIP) = m, (x.) x m, (x.) x m, (x.) x ... (I) rather than the median of the distribution was
chosen to estimate the mean (it is easier to estimate
the mode than the median). The distribution
M, (HCIP) = m, (x,) x m, (x,) x m, (x.) x ... (2)
moments are calculated from the minimum, most
likely and maximum values for the distribution
using the following equations:
Rio = M, (HCIP) ~,. " (3)
m, (x)
I
= -- (x mi, + .95 x pm b + xm,,) (5)
2.95
(4)

where
m, (x) = m~ (x) + [
x
m"
-x ' (6)
az M, (HCIP)
= In ----=--'--------'-
3.25 J
mi,

M~ (HCIP) where xmin = minimum parameter value


(probability = 0.05)
M,(HCIP) = first moment of hydrocarbon
xprob most likely parameter value
in-place distribution
(mode)
MiHCIP) = second moment of hydrocarbon
xmax = maximum parameter value
in-place distribution
(probability = 0.95)
m.Ix,...) = first moment of the nth
parameter distribution 3. Consistent, reliable, unbiased 3-point estimates can
mixn ) = second moment of the nth be developed. This assumption, which is also
parameter distribution necessary to Monte Carlo simulation, may appear
x i- = parameter distribution (<\>, h, daunting. Capen's (i 976) hypothesis that SPE mem-
A ...) bers will "miss" an average 68 percent of the
R so = median value of the in-place questions and the results that support the hypoth-
distribution; plotted at the 50th esis are a sobering assessment of the industry's
percentile on log-probability present inability to deal with uncertainty. However,
paper Capen suggests that the skills necessary to provide
R s4., = median value plus one standard reliable estimates may be developed with practice,
deviation; plotted at the 84.1th and he offers some practice techniques. He notes
percentile that some meteorologists have apparently mastered
this skill and suggests that oil industry personnel
2. A three-point approximation can be used to can eventually attain a similar proficiency.
estimate parameter distribution moments in the
In practice the assumptions are applied in the reverse
absence of complete knowledge of the continuous
order listed.
distribution. This assumption, which is also inte-
gral to Monte Carlo simulation, is necessary because 6.3 APPLICATION
a complete knowledge is seldom, if ever, available. The first step in estimating the in-place hydrocarbons
It is supported by the work of Keefer and Bodily
of a pool is the development of value ranges for each
(1983), who compared the accuracy ofseveral three- of the parameters in the volumetric equation. The
point approximations in estimating the means
minimum and maximum values establish the range
and variances for a set of beta distributions. The
for the pool average value by distinguishing between
recommended approximation for the mean had what is and what is not within the realm of possibility.
an average absolute error of 0.37 percent and a It is crucial that the true average value for the pool be

108

s
PROBABILITY ANALYSIS FOR ESTIMATES OF HYDROCARBONS IN PLACE

greater than the minimum value and less than the Possibly the most challenging part of the evaluation is
maximum value. However, if unrealistic minimum or incorporating parameter interdependence into the volu-
maximum values are used, the variation in the in-place metric equation. Team members may agree that a
distribution will be so large that the estimate will have dependence exists, but that the relationship is vague or
no practical use. For example, the minimum average unknown. An apparent impasse in the discussion usu-
pool porosity value must be slightly greater than the ally signals that the team is grappling with a dependency.
cutoffvalue for the rock type or the discovery well could This is especially obvious when individuals are basing
not have produced hydrocarbons on the drillstem test. their estimates of one parameter on their estimates of a
Using the cutoff value as the minimum average pool previous parameter. Because each case is unique, a single
value is probably acceptable, but using zero as the mini- solution applicable to all cases does not exist. Resolu-
mum average value is not. Similarly, assuming the well tion requires flexibility and at least one team member
flowed gas on the test, the residual gas saturation value with the ability to postulate the mathematics ofthe de-
might be ~n acceptable approximation for the minimum pendence from the discussion. The guiding principles
pool average gas saturation value. Values of zero and are as follows:
one are always too extreme when estimating the 1. Deal with only one geologic process at a time.
volume of hydrocarbons in a pool because they imply
2. Prevent the team from estimating parameters for
that no hydrocarbons exist, contrary to the production
which they have no direct measurements.
from the pool. Warren's methodology does permit an
evaluation of "dry hole risk," but the topic is beyond 3. Ifa parameter can be identified as a product of other
the scope of this discussion. parameters, estimate the primary parameters and
substitute them into the volumetric equation.
The most likely value or modal value is the "pool
parameter average value with the highest frequency 4. When one parameter is clearly dependent upon an-
of occurrence." By definition, it is greater than the other, substitute the dependency into the volumetric
minimum value and less than the maximum value. equation to minimize the number ofparameter esti-
A suggested interpretation is the "best guess" for the mates required from the team, and thus reduce the
pool average value. Several iterations with different chance ofinconsistencies creeping into the estimate.
best guesses usually demonstrate that the in-place An example ofthe application ofthese guidelines is the
distribution is relatively insensitive to variation in the estimation of pool rock volumes. The rock volume
most probable value. Because the in-place distribution should not be guessed at directly because the pool rock
can be calculated so easily, iteration using all the poten- volume is never measured. Teams often find it easier to
tial probable values is often the quickest and easiest way approximate the rock volume as a combination of geo-
to resolve which value should be used for this metric shapes and estimate the dimensions for each
parameter. shape. For example, a rectangle-triangle combination
In the absence of sufficient measurements, the source might be used to approximate a reef cross-section
for parameter values is the combined training and (Figure 6.3-1). The rectangle represents the reef crest
experience ofa company's earth science personnel. The while the two triangles represent the reeffront and back
multi-discipline team approach to in-place estimates slopes. Now the team's expertise can be used to pro-
provides some desirable features. It brings a higher level vide estimates for gross thickness, H, crest width, W,
of competency to the parameter estimates than can be reeflength, L, and slope angles, X. Angle ofrepose con-
supplied by anyone discipline working in isolation, and trols the front slope, while regional dip is the primary
influence on the back slope. This information, plus the
the inter-discipline discussion tends to highlight any
individual bias or inconsistency that may exist in the equations for triangular and rectangular areas, yields the
cross-sectional area of the reef. Multiplication by both
evaluation. For a given prospect, the objective is to iden-
tify the models that do not apply, based on the available the ratio ofnet pay to gross thickness and the reeflength
yields the volume of the reef considered to
information, and then develop unbiased parameter value
contain hydrocarbons.
ranges encompassing all the models that may apply to
this particular prospect. A multi-discipline team that The dependency between cutoff values and pool
appreciates the unique viewpoints of its individual mem- average values for porosity and net pay deserves men-
bers and works to include all views in a consistent tion. Increasing the cutoff value decreases the net pay
explanation has a definite advantage in accomplishing value, but increases the average porosity value. The
this task.

109
DETERMINATION OFOIL AND GAS RESERVES

Reef Back Slcpe


/'

/'
/' Reef
/'
/' Front Slope
/'
/'
/
/
/
/
/ /
/ /'
/' /'

Underlying Water -W-

Hydrocarbon Bearing
Rock Volume = (Area Back Slope + Area Crest + Area Front Slope) (Length) (Net/Gross Pay Ratio)
2 2
= (0.5 H + HW + 0.5 H ) (L) (Net/Gross Pay Ratio)
tan Xb tan X,

Figure 6.3-1 Estimation of Reef Volume

recommended method of addressing this issue is to The gas deviation factor is calculated from the gas
calculate in-place distributions for each of the param- composition as 0.88 at a temperature of81 C and a press-
eter value combinations corresponding to the different ure of 24 731 kPa. Radius of investigation calculations
cutoffvalues. Iteration usually demonstrates that the dif- yield an investigation area of 56 hectares. A single
ferent combinations yield essentially the same in-place boundary is interpreted to exist at a distance of 266 m
distribution. from the well. This correlates with the seismic interpre-
tation, which located the eastern edge of the structure
6.4 TYPICAL SITUATION: 200 to 350 m from the wellbore. No insight on the loca-
CONVENTIONAL GAS tion of the other edges is available from the well test or
The example described in the next few pages is typical the seismic interpretation.
ofmany ofthe situations encountered. It serves to show Geological interpretation provides the location of
just how far afield one can go if insufficient attention is the remaining edges, which are inferred from the
paid to the uncertainty in the in-place estimate. To give depositional model, dip angle, and offset well data.
this example some reality and illustrate the economic Post-depositional erosion results in a very steep-sided
utility of the method, typical recovery and economic structure. Subsequent infilling of these erosional chan-
factors are assumed; however, in practice, equal atten- nels with impermeable material provides the trapping
tion is paid to developing the range of all parameters. mechanism for the structure. From these interpretations,
A recent carbonate discovery well flowed gas at a rate the maximum areal extent of the pool is four sections
of 225 x 103 m3/d from 10 m oflogged pay following (Figure 6.4-1). The geologist has also interpolated a most
completion. Log-derived porosity and water saturation likely value, covering about 2.25 sections. The basis
values are 0.13 and 0.205 respectively. Movable water for this contour is solely the assumption that the true
was not interpreted to exist in the pay interval. The value is likely nearer the mid-point than the extremes.
formation temperature during logging was 74C. Core The Exploration Department is rumored to be
is not available from this well. contemplating a bid in excess of $3000/ha for the off-
Based on the interpretation of the single rate flow and setting acreage. Justification seems to be the four-section
buildup data, the well is completed in a single porosity upside potential ofup to 4900 x 106 m3 ofreserves. The
reservoir, with 300 mD-m conductivity and a -2 skin Exploration Department's request for review of their
factor. Bottom-hole formation temperature recorded numbers has just been received. The sale will take place
during the buildup stabilized at 81C. The Homer plot at the end of the week.
extrapolation yielded a value of 24 731 kPa(abs).

110
PROBABILITY ANALYSIS FOR ESTIMATES OFHYDROCARBONS IN PLACE

2000 x 106 m3 and an economic hurdle volume of


Optimizing porosity. area,
recovery factor, etc., 120 x 106 m3
3
indicates up to 4900 X 10' m
of recoverable gas.
Your boss just "volunteered" you to resolve the situa-
tion. In addition, he advises that senior management
would like to review the corporate reserves booked
Geologist's most likeiy contour
against this well, plus production and cash flow fore-

.' -"---V/\
p -------\--. casts at the upcoming quarterly review. The press
reports described the well in glowing terms, "possibly
,
, .: ' . / ; the best discovery ofthe year" and-you agree-it can't
.,. .. ,
,,
,,
just sit there.
How will you proceed?
p:, ,,
,, ,
,, "*- , Behind the Numbers
,
, I
,,,
,
'\ The situation may seem tense but it is not hopeless!
Although some sabres are rattling, your boss's insight
,,,
P/'
.
,
,,,
,
~
j;/ \ ge~s you in while the majority are still willing to listen.
Pnvately, both departments confide that their numbers
are not absolute but ...
,,
-- -------- --- ..
. \\ The ultimate purposes of reserve estimates are as fol-
lows:
1. To assess whether the uncertainty in the reserves
A completion test has shown
excellentreservoir with one of a given prospect is of sufficient magnitude to
adjacent boundary. justify the expenditures required to reduce the
uncertainty
Figure 6.4-1 Typical Situation: Gas Pool Map 2. To assess the safety of the prospect and of the
aggregate from an investment viewpoint
The Production Department apparently has no plans 3. To provide an indicator of aggregate performance
to tie in this well at the present time. Volumetric
Ea~h of these different purposes requires a unique
estimates using minimum parameter values yield
estimate for the prospect. Additionally, there are times
in-place hydrocarbons of 44 x 106 m'. The economic
when the prospect estimate is less important than its
hurdle volume for the tie-in is 250 x 106 m30freserves.
impact on an aggregate ofreserve estimates, such as the
Environmental concerns preclude flaring additional gas
company reserve profile. An understanding of the re-
volumes to perform an economic limits test.
sponsibilities and COncerns of the different groups and
Review of the four analogous pools reveals various their relation to the prospect or the aggregate is vital to
stages of depletion, with pool reserves estimated at 55, resolving this situation. Erroneous conclusions with
120,250, and 550 x 106 m'. Cumulative production from potentially disastrous consequences can result when
the seven wells in these pools ranges from 30 x ]06 m3 an estimate intended for one purpose is misused for
to 300 x 106 m3 This statistical review did not persuade another.
the Production Department to tie in the subject well,
In this case, the Production Department is charged with
but raised questions concerning the size of facilities re-
the responsibility for tying in the well. The concerns
quired. In addition, the Production Department advises
that relate directly to the prospect estimate are the size
that they recently abandoned the lone well in the 55 x
and design of the surface facilities, the type of sales
106 m3 pool, due to reservoir depletion. Several reviews
contract to negotiate, and the likelihood that the tie-in
with increasingly senior levels of management have
will be economic. Budget allocation requires that the
resulted because the well tie-in costs were not recouped,
economic potential of this prospect be compared and
and Production's personnel are anxious to avoid any
ranked relative to the other financial opportunities avail-
future recurrence. They note that the recently abandoned
able to the department. This is an aggregate-related
well also demonstrated a commercial flow capability
issue because the focus now is on the cumulative
following completion and had an upside potential of
outcome for the budget period and the effect on the

111

7
DETERMINATION OF OIL AND GAS RESERVES
'1!
overall performance of both the department and the Pool Parameter Values
company.
Congratulations! You've established sufficient trust that
The company's future depends on continued access to representatives from both departments have agreed to
economic sources ofproduction which, in this example, meet with you for the purpose of establishing param-
is the responsibility ofthe Exploration Department. One eter value ranges. An unexpected break is the attendance
way to access new production sources is via the bid- of two people whom you've successfully worked with
ding process. To be successful, the bid price must exceed before. Several intense discussions prove fruitful and
all competitive bids, but it must also be less than the net produce group consensus on the following parameters.
economic value of the reserves acquired. The conse-
quences of bidding too low or acquiring the prospect at Areal Extent
an uneconomic price are equally undesirable. This pros- By group consensus, the pool areal extent must be greater
pect-related issue can be addressed by comparing the than 56 hectares. The most conservative guess is 64
likelihood of exceeding the prospect economic value hectares, which is deemed to be the minimum possible
for a given bid price to the likelihood of acquiring the value. The maximum possible value is quickly set at
prospect at that price. The aggregate issue is again bud- 1024 hectares, but opinions on the most likely value
get allocation and the impact of this opportunity on range from 1.5 to 2.75 sections. Resolution is reached
overall performance. when you offer to run three cases, using 384, 576, and
The issues at the corporate level tend to be aggregate- 704 hectares as the most likely value, to demonstrate
related. Both internal and external comparisons to the impact on the in-place distribution. Discussion of
established criteria are performed at this level, under- deposition and erosional processes, seismic interpreta-
scoring the need for aggregate reliability and consistency tion plus several pictures of badlands terrain produces
throughout the industry. Reliability is required to es- consensus that the area ofthe top ofthe pool is less than
tablish trust in future projections, and is achieved when the area of the base. Opinions range from 60 to 95 per-
past performance essentially agrees with past projec- cent ofthe basal area, with 80 percent as the most likely
tions over some time period. Consistency is necessary value. The inter-relationship is handled using an aver-
to permit comparison. Comparisons may be between age area, which is equal to 0.5 (base area + top area).
producing horizons, between geographic areas, between Substituting these percentages into the equation yields
departments within a company, between companies, or the average area equal to 80, 90 and 97.5 percent ofthe
even between industries. Comparison criteria are usu- base area respectively (Figure 6.4-2). These percentages
ally economic and incorporate required or desired and the basal area estimates are substituted for the
objectives. An example of a required objective might average area in the in-place distribution calculation.
be the time component in sales contracts, security of
Net Pay
supply issues, or possibly safety and environmental
issues. Discussion quickly identifies that for this case the pool's
This section demonstrates that calculating the in-place net pay is the product of two geological processes. The
hydrocarbon distribution cannot satisfy these concerns gross thickness of the rock is controlled by deposition
directly. The calculation is only a necessary first step in and erosion, but not all of the rock is reservoir quality.
developing solutions that avoid disaster while achiev- Only the portion whose porosity and permeability has
ing acceptable results for at least the majority of the been enhanced via post-depositional processes is con-
probable reserve outcomes. This approach is based on sidered to contain hydrocarbons. This interrelationship
the concept that a solution that avoids disaster under all is handled by first estimating the gross pay of the pool
probable outcomes is preferable to one that performs and then the percentage conversion to reservoir rock.
nearly ideally under a narrow range of conditions, but Net pay is the product of the two parameters.
provides unacceptable results the majority of the time. The gross pay thickness is controlled by topographical
The optimal solution is the one that avoids disaster for variation on the upper erosional surface and the eleva-
all probable outcomes while maximizing the desired tion ofthe gas-water contact, ifone exists, on the bottom.
results over the widest range ofprobable outcomes. For In the worst case, free water exists just below the
an individual prospect, this requires consideration ofthe bottom of the discovery well and, in the best case, it is
probable range of outcomes available to the prospect, not present. Free water is known to exist in two of
while an aggregate question requires consideration of the analogous pools, but at different elevations. This is
the probable variation in the aggregate.

112

<
PROBABILITY ANALYSIS FOR ESTIMATES OFHYDROCARBONS IN PLACE

the most likely at 15 percent. Water saturation estimates


For the minimum case,
are 18, 20 and 22 percent respectively.
Atop = 0.6 Abo" (7)
AOVg = 0.5 (A,op + Abo,,) (8) Pressure
substituting (7) in (8) The initial reservoir pressure is uncertain. The Homer
Aovg = 0.5 (0.6 Abos + Abos.) plot gives an extrapolated pressure of 24 731 kPa (abs)
0.5 (1.6 Abos.) from the buildup, but this is not the initial reservoir press-
0.8 Abos ure because the boundary's presence violates the
requirement for infinite acting radial flow. Regional
Similarly for
pressure gradients suggest an initial pressure of 22 000
Atop = 0.8 Abos to 26000 kPa (abs). The group agrees that the mini-
Aavg = 0.9 Abas mum possible pressure is 24 000 kPa (abs) because the
and when pressure was still building at the end of the buildup
Atop = 0.95 Abos period, with a final value of 23 966 kPa (abs). A maxi-
Aavg = 0.975 Abos mum value of26 000 kPa (abs) is assumed, with a most
likely value of24 700 kPa (abs).

Figure 6.4-2 Conversion of Base Area to Temperature and Gas Deviation Factor
Average Pool Area Recorded bottom-hole temperatures during the buildup
consistent with the theory that the hydrocarbons were ranged from 80.97 to 81.25C. This variation is very
locally sourced. From this and the 0.98 degree regional small relative to the uncertainty in the other parameters.
dip angle, the gross pay thickness estimates are 6.5 m Perhaps parameters with less than I percent difference
as the minimum case, 19 m as the maximum, and 15 m between the minimum and maximum values can be
as the most likely value. At 13 m, the gross pay thick- treated as a constant without significantly affecting the
ness for the discovery well is slightly below the pool in-place distribution? The effect can be observed by first
average and came in about 2 m lower than expected. considering temperature as constant at 81C, and then
as a parameter, with values of 80.97, 81 and 81.25C.
A number of possible mechanisms are discussed for con-
version of limestone to dolomite, none of which are The gas deviation factor varies from 0.87 to 0.89 over
definitive. In the end the estimates are based on the the 24 000 to 26 000 kPa (abs) pressure range. The
group's experience with the region, gained from the variation between the minimum and maximum value is
examination of logs and core from this formation over less than 3 percent, so perhaps it too can be treated as a
the entire geological basin. Based on that experience, constant? The incentive for doing so is that the increased
the rock encountered by the discovery well is about av- accuracy achieved by incorporating the gas deviation
erage in terms of converting gross pay to net pay. The factor's dependency on temperature, pressure and gas
conversion efficiency for the pool is estimated at 65, composition into the calculation(s) may not be worth
80, and 90 percent, respectively. the effort. Since the gas deviation factor is actually some-
thing between a constant and a random variable, the
Porosity and Gas Saturation validity ofthe assumption might be confirmed by con-
Regional experience again comes to the forefront in the sidering the impact of the two extremes on the in-place
estimation of these parameters. The question of bitu- distribution. Values of 0.87, 0.88 and 0.89 were used
men infilling of the available porosity arises but is for the parameter range, while 0.88 was selected when
considered remote, based on the group's experience with the gas deviation factor was considered constant.
this formation. The group also considers the possibility Gas In Place
that porosity and water saturation are interrelated, but
postulated correlations prove inconclusive. However In-place distribution calculations using 384, 576 and
it is agreed that the greatest variation in the in-place 704 hectares as the most likely value for areal extent
estimate results from the independent treatment of are presented in Tables 6.4-1, 6.4-2, and 6.4-3. For a
the two parameters, so value ranges are developed constant, m, (x) = constant and m2 (x) = constant
accordingly. The minimum possible pool porosity is squared. The in-place distribution is obtained using the
estimated at 12 percent, the maximum at 17 percent and calculated R so and Rs4.t values to establish a straight
line on log-probability paper (Figure 6.4-3). For

113
,
DETERMINAnON OF OIL AND GAS RESERVES
I
Table 6.4-1 Gas-in-Place Distribution for Most Likely Area of 384 Hectares

Pool Minimum Most Likely Maximum


Parameters Possible Value Value Possible Value
xmin xprob xMs x m. (x) m, (x)

Basalarea, Abo" (ha) 64 384 1024 492.5 329783


Correction to avg. area, C, 0.80 0.90 0.975 0.8915 0.7977
Grosspay, H(m) 6.5 15 19 13.47 196.4
Net/gross pay ratio, N/G 0.65 0.80 0.90 0.7831 0.6191
Porosity, <p 0.12 0.15 0.17 0.1466 0.02173
(l - Sw) 0.78 0.80 0.82 0.80 0.6402
Pi(kPa abs) 24000 24700 26000 24903 620557523
10 000 (288.16) 10000(288.16)
Constants 0.000091 8.327 x 10-'
10' (101.325) r,z, 10' (l 01.325) (354.16) (.88)
M1 (OGIP)= 1234.7 M,(OGIP) = 2 298 761

10000 (288.16) Ab", (C,) H (N/GH (l-Sw) Pi M, (OGIP)


OGIP= a' = In 0.4107
10' (101.325) Ti Z, M; (OGIP)

1
m, (x) = - - (x mio + .95 x pmb + xm,,) -"-
R,o=M,(OGIP)e' = 1005.5 x 10 m'
,
2.95

m, (x) = m; (x) + [X max -


3.25
J
x min a , ,
R 84 . , = R so e = 1908.6 x 10 m

M 1(OGIP) = m, (x,) X m, (x,) X m, (x.) X ... M, (OGIP) = m, (x.) X m, (x,) X rn, (x,) X ..
Note: Pi. Ti and Zj are respectively initial reservoir pressure, temperature, and gas formation factor.

prospect issues the question is: How much of the The effect of varying the most likely value of the
distribution should be considered? The suggested range distribution can be seen on Figure 6.4-3. In this example
is all values from the R, to R,s values, which can be this variation is insignificant compared to the Rs to R,s
read from the graph. For this example the range is 400 range in the distribution. Group consensus on which
to 3250 X 106 m 3 using the 576 hectare most likely value value to use is usually easy to obtain following the team's
distribution. This encompasses 90 percent of the prob- inspection ofthe graph because it does not really matter
able outcomes and is consistent with developing which distribution is used. However, if consensus does
solutions that work the vast majority of the time. Since not exist, a further compromise is to draw a line through
human nature is inclined to over-estimate the extent of the smallest R, value and the largest R,s value to estab-
knowledge, an initial reaction might be disbelief at the lish a composite in-place distribution. The characteristics
magnitude of the range. However, an order-of-magni- ofthis distribution can be calculated by reading the R so
tude variation in the range is common, especially for and R 84. 1 values from the graph and using the equations
new discoveries. For situations where a single number to calculate M,(HCIP) and M 2(HCIP). Alternatively, one
is desired to describe the distribution, the mean value can carry the two extreme distributions through the de-
(M1(HCIP is recommended. For the 576 hectare dis- cision-making process until everyone agrees that "it does
tribution M 1 (HCIP) = 1389.7 X 10 6 m 3 This value has not matter."
no significance to prospect issues, only to aggregate
questions. Misuse it at your own peril!

114

d
PROBABILITY ANALYSIS FOR ESTIMATES OFHYDROCARBONS INPLACE

Table 6.4-2 Gas-in-Place Distribution for Most Likely Area of 576 Hectares

Pool Minimum Most Likely Maximum


Parameters Possible Value Value Possible Value
X m1n x pr ob XMax m, (x) m, (x)

Basal area, Ab,,,, (ha) 64 576 1024 554.3 394506


Correction to avg. area, C f 0.80 0.90 0.975 0.8915 0.7977
Gross pay. H(m) 6.5 15 19 13.47 196.4
Net/gross pay ratio, NIG 0.65 0.80 0.90 0.7831 0.6191
Porosity, <I> 0.12 0.15 0.17 0.1466 0.02173
(I - Sw) 0.78 0.80 0.82 0.80 0.6402
P, (kPa abs) 24000 24700 26000 24903 620557523
10000 (288.16) 10 000 (288.16)
Constants 0.000091 8.327 x 10'
10' (10 1.325) T, Z, 10' (101.325) (354.16) (.88)
M, (OGIP) = 1389.7 MlOGIP) = 2 749 913

10000 (288.16) Ab" , (C,) H (NIGH (I-Sw) P, M, (OGIP)


OG1P= a' =In = 0.3533
10' (101.325) T, Z, M: (OGIP)

a'
- - 6 3
a , ,
R so = M, (OGIP) e' = 1164.7 x 10 m R 84.l =Rsoe =2110.4x 10 m

Note: Pi. Til and Z, are respectively initialreservoirpressure, temperature, and gas formation factor.

Table 6.4-3 Gas-in-Place Distribution for Most Likely Area of 704 Hectares

Pool Minimum Most Likely Maximum


Parameters Possible Value Value Possible Value
x min x prob x Max m. (x) m, (x)

Basal area, Ab,,,,(ha) 64 704 1024 595.5 441 902.6


Correction to avg. area, C, 0.80 0.90 0.975 0.8915 0.7977
Gross pay, H(m) 6.5 15 19 13.47 196.4
Net/gross pay ratio, NIG 0.65 0.80 0.90 0.7831 0.6191
Porosity, <I> 0.12 0.15 0.17 0.1466 0.02173
(1 - Sw) 0.78 0.80 0.82 0.80 0.6402
P, (kPa abs) 24000 24700 26000 24903 620557523
10 000 (288.16) 10 000 (288.16)
Constants = 0.000091 8.327 x 10'
10' (101.325) T, Z, 10' (101.325) (354.16) (.88)

M, (OGIP) = 1493.1 M,(OGIP) = 3 080 291

10000 (288.16) Ab" , (C,) H (NIGH (l-Sw) P, M, (OGIP)


OG1P= a'= In = 0.3233
10' (101.325) T, Z, M: (OGIP)

R so
-,
=M, (OGIP) e " = 1270.2 X 10' m' R 84. 1 =R so ea =2243.0 x 10, m,
Note: Pi' Ti and ~ are respectively initial reservoir pressure, temperature, and gas formation factor.

115
DETERMINATION OFOIL AND GAS RESERVES

2 5 10 20 3040506070 80 90 95 98 ,
Observations
10' 10 The purpose of performing the calculations is to show
the ease with which the in-place distribution can be up-
dated. In the working world, this feature translates into
more rigorous estimates that are updated more frequently
and with less time and effort than is achieved with any
other method. This statement becomes truer as the team
gains familiarity with the methodology, the prospect,
and each other. Gradually the emphasis on the reasons
for performing the calculation shifts from a reactive post-
384 ha
Il / event exercise to more of a planning and evaluation
L576 ha
activity.
i:
.~ Production's 44 X 106 mJ minimum pool volume and
(!J 102 Exploration's 4900 x 106 mJ upside number do not ap-
pear on the probability distribution. The 44 x 106 mJ
value is the product of all the minimum possible pa-
rameter values, while the product of the maximum
parameter values and an optimistic 87 percent recovery
factor yields the 4900 x 106 m' upside number. Consis-
tently using the worst or best parameter values for the
10 10 in-place estimate always results in a number which is
2 5 10 20 3040508070 80 90 95 98
Percentage less than or greater than 99.5 percent of the cumulative
probability distribution and is even more extreme for
Figure 6.4-3 Typical Situation: Gas-in-Place the cumulative reserve distribution. The question for
Distribution both groups is why they are basing their decisions on
such improbable numbers.
The previous distributions were calculated assuming Some insight on what numbers should be used can be
that reservoir temperature and gas deviation factor are gained by preparing a reserve distribution (Table 6.4-5,
constants. For comparison, in-place distributions were Figure 6.4-4) and a discounted net profit before invest-
calculated using 384, 596 and 704 hectares as the most ment (DNPBI) distribution (Table 6.4-6, Figure 6.4-5)
likely value and the following temperature and gas for the pool. Both distributions are prepared analogous
deviation factor assumptions: to the in-place distribution. The reserve distribution uses
I. Variable temperature, constant gas deviation factor the in-place distribution moments and recovery factor
2. Constant temperature, variable gas deviation factor estimates of 65, 75 and 87 percent respectively as
input, while the DNPBI distribution requires the reserve
3. Variable temperature and gas deviation factor
distribution moments and a unit value for the gas of
In all cases, the calculated values for M 1 (HClP), R so $8.00, $11.00 and $15.00 per thousand cubic metres.
and RS4. 1 agree with the previously calculated values The unit value for the gas is the estimated present value
to four significant figures: In-place distribution ofthe future profit from the future production, account-
calculations for a 576 hectare most likely value with ing for prices, production profiles, effluent composition,
variable reservoir temperature and gas deviation factor royalties, operating costs, inflation and discounti?g.
are presented as Table 6.4-4. The inverse (liT, I/Z) Multiplying by the prospect reserves and subtracting
of the denominator parameters is used to conform to the present value of the capital investment yields an
theory. Calculations for the other combinations are not estimated net present value for the prospect."
presented, but left as an exercise for the reader. For com-
From the reserve distribution shown in Figure 6.4-4,
parison purposes, the time required to prepare all twelve
pool reserves are between 320 and 2350 x 106 m'. With
distributions was approximately 3 hours using a
programmable calculator.
An understanding of Warren's theory governing the unit
value parameter is necessary to attempt this procedure
(Warren, 1988).

116
_ _ _ _ _ _ _ _ _C1
PROBABILITY ANALYSIS FOR ESTIMATES OFHYDROCARBONS INPLACE

Table 6.4-4 Gas-in-Place Distribution for Most Likely Area of 576 Hectares.
Variable Temperature and Gas Deviation Factor

Pool Minimum Most Likely Maximum


Parameters Possible Value Value Possible Value
xmin xprob xMax m, (x) m, (x)

Basal area, Ab. " (ha) 64 576 1024 554.3 394506


Correction to avg. area, Cr 0.80 0.90 0.975 0.8915 0.7977
Gross pay, H(m) 6.5 15 19 13.47 196.4
Net/gross pay ratio, NIG 0.65 0.80 0.90 0.7831 0.6191
Porosity, <I> 0.12 0.15 0.17 0.1466 0.02173
(I - Sw) 0.78 0.80 0.82 0.80 0.6402
Pi(kPa abs) 24000 24700 26000 24903 620557523
1 1 1
Temperature 0.002823 7.9693 X 10"
273.16+ 81.25 273.16+ 81 273.16 + 80.97
Gas Deviation Factor 11.89 1/.88 11.87 1.136463 1.291612
10000 (288.16)
Constants 0.028439 0.000809
10' (101.325)
M1 (OGlP) = 1389.6 M,(OGlP) ~ 2 749 372

10000 (288.16) Ab", (C,) H (NIGH (I-Sw) Pi M, (OGIP)


OGIP= a' = In = 0.3534
10' (101.325) r,z, M: (OGIP)

a , ,
"
R so = M 1 (OGIP) ~,-- = 1164.5 X 10' m' R 84. 1 = R so e = 2110.2 x 10 m

Note: Pi. Ti and Z, are respectively initial reservoir pressure, temperature, and gas formation factor.

a 98 percent probability of exceeding the 250 x 10' m3 X 103 m3/d as the maximum, is technically acceptable
tie-in hurdle volume, development of this pool should and more economical than designing to cover the larger
be a sufficiently safe bet for even the Production range. Completion of the equipment sizing exercise in
Department. Once pool deliverability, pressure, temper- this fashion provides the input required for sales con-
ature and effluent composition information have been tract negotiation, and simplifies matching contracted
supplied, the central production facilities, such as deliverabi!ity to facility capability.
the gathering line to the gas plant, can be sized. The The purpose of equipment sizing at this stage is two-
number of wells required to deplete the pool and inter- fold. The present value cost of both present and future
well spacing can be estimated by comparing well capital is required to evaluate the economic attractive-
deliverability to pool deliverabi!ity. Sizing of the indi- ness of developing the prospect. However, only those
vidual wellsite facilities can also be determined from facilities, such as the gathering line to the gas plant, that
the well deliverability estimates. are required immediately to initiate production will be
One way of obtaining an estimate for pool deliverabi!- constructed on the basis of this initial estimate. Sizing
ity is to divide the reserve distribution by a desired rate of future facilities, such as field compression, can be
of take. For this case a 1/3650 rate of take yields an confirmed prior to their construction because signifi-
initial deliverability range of88 to 644 x 103 m3/d. Since cantly more information will be available by that time.
the discovery well flowed at 225 x 103 m3/d, it is not At this stage the optimal design is the one which pro-
necessary to design the central facilities to handle the vides the largest probability of achieving a positive net
entire 88-644 x 103 m3/d range. Using the discovery present value over the prospect reserve distribution. The
well's capability as the minimum throughput, with 644 optimal design does not have to provide the capability

117
DETERMINATION OF OIL AND GASRESERVES

Table 6.4-5 Reserve Distribution for Most Likely Area of 576 Hectares

Pool Minimum Most Likely Maximum


Parameters Possible Value Value Possible Value
xm1n x prob xMax m, (x) m, (x)
aGIP (10 m') 1389.7 2749913
Recovery Factor 0.65 0.75 0.87 0.7568 0.5773
M, (RIG) = 1051.7 M,(RIG) = I 587 519

a M, (RIG)
a =In =0.3613 -," = 877.9 x 10 m 6 J
M: (RIG) R so = M, ( RIG ) e
, 6 J
R"., =Rsoe = 1601.4 x 10 m

2 5 10 20 3040506070 80 90 95 98 4
miUion, while sunk costs are $2.5 million. Now the
10' 10 effect ofbid price on profitability can be observed. The
cumulate exploration and development cost of $8.6
million" ($2.6 miUion + $3.5 million + $2.5 million)
intersects the discounted net profit before investment
curve at a probability of42 percent (Figure 6.4-5). Thus,
ifthe remaining four sections ofland could be acquired
at no cost, there is a 58 percent probability ofachieving
a positive net present value (NPV) through development
of this pool. At the rumoured bid price of $3000/hect-
are, the cost for the remaining four sections is
approximately $3 million, which reduces the probabili-
ty of achieving a positive NPV to 39 percent on a total
cost of$II.6 million (Figure 6.4-5). Is this a good gam-
ble? Unless one is unusually lucky, probably not. A wiser
course might be a minimal bid price and anticipating
that the rewards (and risks) of development will likely
be shared with others. Then the sharing options can be
identified and their economic merits evaluated.
The example illustrates one way of turninga promising
10 10 exploration prospect into a probable money-losing ven-
2 5 10 20 304050.6070 80 90 95 98 ture. Of course there are many other ways. The key to
Percentage
consistent financial success is staying true to the pur-
pose ofexploration and development, which is profitable
Figure 6.4-4 Typical Situation: Reserve investment, not production at any cost. Warren's meth-
Distribution od ultimately provides a means to do just that, and it
to operate at all the rates specified by the rate of take starts with the in-place estimate.
deliverability distribution, and probably would not when
Summary
its magnitude is very large.
In this case the present value tie-in cost is estimated at The example illustrates the use of the Warren Method
$2.6 million, including future field compression. The to estimate hydrocarbons in place, and some
present value of future development drilling, including
dry hole and wellsite facility costs, is estimated at $3.5 *Although variablecapital costs can be accommodated,
single-value costshave been used to simplify the example.

118

s
PROBABILITY ANALYSIS FOR ESTIMATES OFHYDROCARBONS IN PLACE I
Table 6.4-6 Discounted Net Profit Before Investment Distribution for Most Likely Area of 576 Hectares

Pool Minimum Most Likely Maximum


Parameters Possible Value Value Possible Value
xml n Xprob xMax mt (x) m, (x)
RIG (10' rrr') 1051.7 I 587519
Unit Value ($/m3) 0.008 0.011 0.015 0.01134 0.0001332
M, (DNPBI) = 11.926 M,(DNPBI) = 211.4759

z M, (DNPBI) a'
a = In = 0.3967 R50 = M, (DNPBI) e- 2" = $9.78 X 10'
M~(DNPBI) .
,
R"., = R50 e = $18.36 x 10
,

10
when the input is unrealistic, and it cannot identify the
2 5 20 30 40 50 60 70 80 90 95 98
10' 10' reasons for the discrepancies. These limitations restrict
its use to knowledgeable, conscientious evaluators and
evaluation teams that are comfortable with the meth-
w
0 od's assumptions and theory and willing to expend the
~

x effort required to attain realistic input. The payoff for


~ these individuals is an analysis that faithfully summa-
C
Q)
2 rizes their thoughts and their earth science expertise in
10' 10
~
Q) a mathematical form and that can be extended to any
>
E desired depth and variables.
!!!
Despite this caveat, the Warren Method will undoubt-
~
ID edlybe attemptedby the unthinking and the unqualified;
,,
e'"
Q. 0
, the output, if accepted unquestioningly, will prove
;; 0 0
costly. The only safeguard is a careful examination of
z 10 ~BidPrice 10 the evaluators' competence and the supportingevidence
'0
Q) / " Sunk Capital for the input. If both survive scrutiny, the predictions
C
~
0
0
Development from the output are worth testing.
'" Drilling Capital
is ..:.:...- References
Tie-In Capital
Aitchison 1., and Brown J.A.C. 1966. The Lognormal
1 1 Distribution. Cambridge University Press, New
2 5 10 20 30 40 50 60 70 80 90 95 98 York,NY.
Percentage
Capen, E.C. 1976. "The Difficulty of Assessing
Uncertainty." JPT, Vol. 28, Aug. 1976.
Figure 6.4-5 Typical Situation: Discounted Net
Profit Before Investment Keefer, D. L., and Bodily, S. E. 1983. "Three Point
Approximations for Continuous Random
applications of the in-place estimate in economic Variables." Management Science, No. 29, pp.
evaluations. For those who accept that a probabilistic 595-609.
answer is the limit ofhuman capability, when assessing Warren, J.E. 1988. "Exploration and Production
the future it is an extremely powerful and flexible, yet Decisions: Risk, Uncertainty and Economics,"
deceptively simple, tool for dealing with the uncertain- Course, OGGl, Houston, TX, Sep. 1988.
ties of reserves estimation. But it is not infallible. It
cannot compensate for unrealistic input, it cannot warn

119
...

Chapter 7

MATERIAL BALANCE DETERMINATION OF


HYDROCARBONS IN PLACE

7.1 INTRODUCTION oil, gas, water and rock with changes in pressure and
One of the fundamental principles used in engineering temperature over discrete time periods. These time
is the Law of Conservation of Matter. The application periods are chosen to extend from initial production
of this law to petroleum reservoirs is known as the to various later dates when both reservoir pressures
"material balance equation" which has proven to be an and voidage cumulatives are known.
invaluable supplement to direct volumetric calculation The pressure-volume-temperature (PVT) properties
of reservoir parameters. Numerous articles and papers described in Chapter 5 provide the basis for relating
describe all aspects ofits use in the analysis ofreservoir expansion to voidage. In material balance usage, rock
performance. and fluid volumes are normally considered at two con-
The material balance equation is being widely used ditions: (I) reservoir pressure and temperature, and (2)
today, aided by access to computers and the increasing surface reference conditions. The PVT data is usually
knowledge base in the literature. The results from ma- presented in a format that conveniently bridges these
terial balance calculations are significant because they conditions. Since changes in reservoir temperature are
are largely independent of the factors that contribute to relatively insignificant except for thermal projects, ex-
volumetric estimates. As databases for production, res- perimental PVT data is generally based on a constant
ervoir pressure, and fluid properties improve, the reservoir temperature, and pressure is treated as the
usefulness of the material balance equation increases. primary independent variable.
When oil, gas or water is removed from a reservoir, the The material balance equation has been used extensively
pressure in the reservoir tends to fall, and the remaining to determine initial fluids in place, calculate water
fluids expand to fill the vacated space. The hydrocar- influx, estimate fluid recovery, and predict reservoir
bon system is also affected by fluids and energy sources pressures. The use of the equation in defining initial
that are in pressure communication with it. Examples fluids in place is the focus of this chapter. Applications
of these include connected natural aquifers, nearby in- of the equation to gas reservoirs, oil pools, and mixed
jection or production activities, and other oil or gas drives will be discussed.
reservoirs.
7.2 UNDERLYING ASSUMPTIONS
The material balance is the application of the Law of
Conservation of Matter to a petroleum reservoir during In terms of normal physics, the material balance
equation itselfis devoid ofconditions and assumptions,
its depletion history. It is important for the reservoir
but in regular oilfield usage, a number of underlying
engineer to understand the system at hand and apply
the material balance realistically. assumptions arise. These may result from the way in
which the input data is derived or from computational
Simply stated, the material balance says that the initial simplifications. The material balance calculation is
mass, plus the mass added, less the mass removed, must based on changes in reservoir conditions over discrete
equal the mass remaining in the system. In reservoir periods of time during the production history. The
engineering usage, mass is often replaced by volume. calculation is most vulnerable to many of its under-
Thus the bulk volume, plus fluid entry volumes, plus lying assumptions early in the depletion sequence when
expansion, must equal the bulk volume remaining plus fluid movements are limited and pressure changes
voidage. If the bulk volume is considered constant, are small. Uneven depletion and partial reservoir
then at reservoir pressure and temperature, expansion development compound the accuracy problem.
equals voidage. The writing of a volumetric material
balance is an exercise in describing the expansion of

120

s
MATERIALBALANCE DETERMINATION OFHYDROCARBONS INPLACE

The basic assumptions in the material balance method compositions are also important. Special laboratory
are as follows: procedures may be used to improve PVT data for
Constant Temperature. Pressure-volume changes volatile fluid situations.
within the reservoir are assumed to occur without re-
7.3 EXPLANATION OF TERMS
lated changes in temperature. The pressure changes
happen slowly in most of the reservoir, and the mass As previously indicated, the material balance equation
of adjacent rock volumes is such that the reservoir sys- relates net reservoir voidage to expansion of reservoir
tem very closely approaches constant temperature fluids. This section describes the various components
performance. of voidage and expansion used in the conventional black
oil material balance. .
Pressure Equilibrium. A uniform pressure is assumed
to apply across the pool. The model is considered as a Table 7.2-1 lists reservoir voidage terms. In addition to
tank, with infinite permeability. This is a critical assump- wellbore flow streams, water influx-efflux acts as a
tiou, since the expansion properties ofthe rock and fluids pseudo production quantity. Various independent wa-
are stated in terms of prevailing pressure. Local ter influx formulations are discussed in Section 7.7.3.
pressure variations around producing or injection well-
bores may generally be disregarded. However, regional Table 7.2-' Reservoir Voidage Terms
trends must be recognized and included in the pressure
Surface Reservoir
averages.
Fluid Volumes Volumes
Constant Reservoir Volume. Reservoir volume is as-
sumed to be constant except for those conditions ofrock Gas cap gas Gpe GpeBge
and water expansion or water influx that are specifi- Liberated gas Gps-N pRs (Gp-N
sp R)B
sgs
cally considered in the equation. The formation is Injected gas -0-I -GiBgi
considered to be sufficiently competent that no signifi-
Oil Np NpBo
cant volume change will occur through movement or
reworking of the formation due to overburden pressure Water Wp WpBw
as the internal reservoir pressure is reduced. The con- Water injected -w I
-WB
I w
stant volume assumption also relates to an area of interest
to which the equation is applied. If the focus is on some where G = gas subscripts c = gas cap
part of a reservoir system, except for specific exterior B = formation g = gas
flow terms it is assumed that the particular portion is volume factor = injected fluids
encased in no-flow boundaries. N = oil a = oil
Reliable Production Data. As measurement tech- W = water p = produced fluids
nology has improved and regulatory authorities have R = gas-oil ratio s = solution gas
consolidated the data-gathering process, the reliability w = water
ofproduction and injection data has improved substan-
tially. Good well rate data is critical to the material
In Table 7.2-1, the formation volume factor, B, is the
balance, as net voidage figures directly in the calculated
volume at reservoir temperature and pressure per unit
oil in place.
of surface reference volume. The change in formation
Representative PVT Data. The PVT information is the volume factor for the various fluids is proportional to
other main ingredient of the material balance equation. their compressibilities. Rock compressibility usually
It is assumed that the PVT samples or datasets repre- ranges from 0.4 x 10,6 to 1.5 X 10-6 vol./pore volume/
sent the actual fluid compositions and that reliable and kPa (kPa,I), and is primarily dependent upon porosity.
representative laboratory procedures have been used. Water compressibility is linear with pressure, and ranges
Notably, the vast majority of material balances assume from 0.3 to 0.6 kPa,l. Oil compressibility shows
that differential depletion data represent reservoir flow some nonlinearity with pressure. It varies from 0.4 to
and that separator flash data may be used to correct for 3.0 kPa,l, relating to its gravity. Gas at 14000 kPa has a
the wellbore transition to surface conditions. Such compressibility in the order of 60 x 10-6 kPa,l. The
"black oil" PVT treatments relate volume changes to behaviour of the material balance calculation follows
temperature and pressure only. They lose validity in directly from the relative compressibilities as manifested
cases of volatile oil or gas condensate reservoirs where by the formation volume factors.

121

7
qiit-

DETERMINATION OFOIL AND GASRESERVES

As pressure is reduced in an oil-gas-water system, all of the factors that could be applied to routine deter-
liquid volumes increase in the undersaturated fluid re- minations of oil and gas in place. The fifth term in
gion. When the oil reaches its saturation pressure, gas the numerator, We' is water influx and is defined in
is released and a vapour phase begins to form. Further Equation (13) in Section 7.7.
pressure depletion results in diminishing liquid volumes
and rapidly expanding gas volumes. Both total fluid
volume and system compressibility then increase.
Table 7.2-2 provides various expansion terms that
occur in a material balance equation. These terms off- (1)
set the various voidage quantities in the material balance In Equation (1) the formation volume factors reflect the
equation. reservoir volume per unit of stock tank or surface vol-
ume. They are dimensionless, i.e., reservoir m 3/surface
Table 7.2-2 Reservoir Expansion Terms m3 The terms of the equation represent volumes or
changes at reservoir conditions. Reservoir engineers
Material Expansion commonly use the same formation volume factors for
gas cap gas, solution gas and injected gas, the degree of
Gas Cap error inherent in such a simplification depending upon
the circumstances. If such a shortcut is taken, Equation
(1) is reduced to the form ofEquation (2), which will be
Liberated Gas N(R,;-R,)B g,
used to illustrate adaptations ofthe material balance for
Oil N(B,-B,;) particular conditions. The engineer is free to re-insert
the distinction between diverse gas compositions when
NB (Hm) S c dP it is worthwhile to do so.
Water 01 _ ww
1 8w
NB,j(Hm)
Rock --'-----crdP
I-S w
(2)
where c compressibility (volumechange/
volume/pressure unit) 7.5 SPECIAL CASES OF THE
f formation MATERIAL BALANCE EQUATION
dP change in pressure
7.5.1 Undersaturated Oil Reservoirs
m gas cap reservoir volume/ oil zone
reservoir volume Several terms of the material balance equation may
N oil in place disappear when reservoir conditions negate their use.
B formation volume / surfacereference This is particularly true for the volumetric undersaturated
volume oil reservoir. For this case there is no gas cap, and since
R ratio of gas content/ oil volume (surface reservoir pressure is above the bubble-point pressure of
reference conditi'ons) the oil, there is no free gas in the oil zone. Production
connate water saturation(fraction of pore depends largely upon liquid expansion ifreservoir pres-
space) sure is being depleted. Therefore, rock and connate water
expansions are significant and should be included.
Equation (3) provides a material balance for an
7.4 GENERAL MATERIAL BALANCE undersaturated pool with water injection, production,
EQUATION and influx.
The general material balance equation equates
reservoir voidage to reservoir fluids expansion. If the N
voidage terms of Table 7.2-1 are equated to the expan- BOi (3)
sion terms of Table 7.2-2 and N is factored out from (B, -B,;) + I-S (Swcw+c r) dP
w
the expansion terms, rearrangement yields the general
material balance, Equation (I). This form contains

122

_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _1
MATERIAL BALANCE DETERMINATION OFHYDROCARBONS IN PLACE

7.5.2 Saturated Oil Reservoirs With the usual assumption of an isothermal reservoir,
The saturated oil reservoir, either with or without a gas Equation (6) becomes:
cap, exhibits a much greater compressibility than the
liquid-filled undersaturated system. Even a small gas (J,,((Z/P),,-(Z/P),;) = (Jp,(Z/P)" (8)
saturation is noteworthy, due to the relatively high com-
pressibility of gas. In such cases rock and water Rearranging, Equation (8) becomes:
compressibility are often neglected in the interest of

= o, C_(P/Z~,,(Z/P)J
minimizing the calculations. Equation (4) is the materi-
al balance equation for a saturated reservoir, initially at (J" (9)
the bubble-point pressure. The terms for gas and water
injection, water influx and water production may be Equation (9) can also be transformed to the form shown
added as required. in Equation (10):

~p13,1f((Jp-~pFt,)13, P
(P/Z)" = (P/Z)"-(Jp,(--),, (10)
(13,-13,) (4) (J"Z
(13,-13,) -l- (Ft,,-Ft,) 13,1fm13'i
s, Equation (10) is in the form of a straight line, y = mx -t-
b. Hence, plotting P/Z vs. (J and extrapolating the line
7.5.3 Gas Reservoirs to P/Z = 0 yields the initial gas in place. This is a tradi-
tional method ofcalculating gas reserves for a volumetric
Gas reservoirs are also amenable to the material
pool. Fluid entry or exit from the system is indicated by
balance treatment. Starting with Equation (1), it is as-
upward or downward plot curvature, respectively. Such
sumed that water production, influx and injection are
performance may be seen in cases of water influx from
zero. Since gas has a very high compressibility, rock
an aquifer, interference with other pools, or interference
and water expansion in the gas cap may be safely ne-
with a portion of the reservoir outside of the area of
glected. Oil production and expansion terms are not
interest. Formation compaction also may cause a
applicable. Cross-multiplying Equation (I) and making
nonlinear PIZ curve. In this case the historical trend will
substitution gives Equation (5):
run above the gas-defined slope in early years and then
tum sharply down to the true gas in place.
m~13"
(J =-- (5)
" 13 gci 7.6 LIMITATIONS OF MATERIAL
BALANCE METHODS
Eliminating the terms for net water voidage, rock and The basis of the material balance is firm, and the
water expansion, and those relating to oil zone produc- equation can be made to encompass most ofthe factors
tion and expansion gives Equation (6): relevant in hydrocarbon production. However, in prac-
tical application, several sources of errors limit the
(6) accuracy of material balance methods. The gravity of
these errors varies with circumstances.
The gas formation volume factor, 13g' may be replaced 1. Thermodynamic equilibrium is not attained in
according to Equation (7): actual field conditions.
2. PVT data is obtained using liberation processes that
(7) do not represent reservoir conditions.
3. Inappropriate average pressures are used.
4. There is uncertainty in the "m" ratio.
where P sc = standard or reference pressure
Z = gas compressibility factor 5. The production data used is inaccurate.
T = reservoir temperature The amount ofpressure decline covered by the produc-
T sc = reference temperature tion history is one ofthe best criteria in gauging potential
P = formation pressure errors. The material balance is a comparison ofvoidage
to expansion and concentrates on evaluating fluid

123

DETERMINATION OF OIL ANDGASRESERVES

expansion. Large pressure declines produce large If an aquifer is large enough to impact the pressure
expansions, making inaccuracies in production volumes performance ofthe hydrocarbon zones significantly,part
relatively less significant. Similarly, pressure errors are of the water is likely to be substantially removed from
less critical with more pressure depletion. In general, a the hydrocarbons, due to its low compressibility. Water
pressure decline of 10 percent of the original reservoir also has much less mobility than gas. Therefore, the
pressure is needed before the material balance becomes assumption of common pressure used for oil zones and
reliable. This critical depletion level is highly depen- their gas caps is usually not applicable to hydrocarbon
dent upon the quality of the pressure, production and zones and their aquifers.
PVT data.
7.7.2 Water Influx Measurements
Pressure errors originate from several sources. Gauge
and sonic survey errors can be compounded during The simplest method of externally determining water
processing and conversion to a common datum. True influx for use in the material balance equation is to
static pressures may be difficult to derive in low trans- measure it directly. In pools where water influx is an-
missibility pools with high viscosity fluids. Areally ticipated, the operators may periodically log selected
imbalanced withdrawal or injection may create regional wellbores to determine water saturations. The advance
pressure gradients in the pool. It is important that such ofthe oil-water or gas-water contact can be defined with
areal pressure variations be properly reflected in the a selection of logged wellbores distributed across the
averages applied to material balance equations. Volu- area of the hydrocarbon-water interface. The engineer
metric averaging of measured values is the preferred must have reliable data for reservoir porosity and water
technique. Multiple layers ofdiffering permeability and saturation adjacent to the water contact. It is also very
severe lateral changes in permeability within the for- helpful to have an independent source of residual
mation may complicate the gathering of representative hydrocarbon saturation in the water-invaded zone.
pressures. A study by Hutchinson (1951) presents Such data may be obtained from relative permeability
the quantitative effect of pressure errors on material measurements in special core analyses.
balance determinations of hydrocarbons in place. The accuracy of water influx volumes from periodic
water contact elevation maps varies with the circum-
7.7 SUPPLEMENTAL CALCULATIONS stances. The reliability of water saturation and porosity
7.7.1 Gas Caps and Aquifers values is important.
Most ofthe material balance parameters are defined by There is also an element of doubt in the reservoir
pressures, PVT measurements, and production-injection stratification. Rock capillarity variations and trans-
data. Original oil or gas in place can be calculated in missibility barriers may cause undulations in the
some circumstances, but in cases where gas caps or aqui- water contact as influx occurs. Areal variations in res-
fers exist, the material balance equation contains more ervoir pressure can also lead to nonuniform water
than one unknown. Supplementary calculations must advance. The user should be aware of the potential for
then be utilized for a solution. error when working with a limited number of water
Gas caps can often be estimated by volumetric means. contact measurements.
Core and log data from upstructure wells can be used 7.7.3 Analytical Water Influx Models
with conventional volumetric mapping techniques to
estimate the amount of associated gas that is in contact Water influx may be calculated from the material
with the oil zone. The gas cap volume enters the mate- balance equation as a function oftime using a volumet-
rial balance equation through the parameter "rn" in ric estimate of oil in place. The engineer can then
Equation (1). As gas is a high mobility fluid, the gas endeavour to match this influx vs. time trend with an
analytical "model." Ifa reasonable match ofan extended
cap can often be represented as having the same reser-
voir pressure history as the adjacent oil zone. However, historical period is achieved with a single set of coeffi-
cients, the analytical relationship is plausible and
when the gas zone is large relative to the oil zone or
provides a basis for estimating future influx for use in
when the gas zone is geographically widespread, the
areal pressure variation within the gas cap should be the material balance.
considered. Small errors in gas cap average pressure can Schilthuis (1936) provided the simplest aquifer influx
produce large changes in calculated oil in place, because model. His model assumes that constant pressure is
gas is much more compressible than oil. maintained somewhere in the aquifer and that flow to
the oil zone is proportional to the pressure differential,

124

n
MATERIAL BALANCE DETERMINATION OFHYDROCARBONS INPLACE

with the remaining factors in D'Arcy' s Law constant.


~p = pressure differential, aquifer limit to
Equation (II) shows the Schilthuis steady state
formulation: oil-water contact (kPa) (psi)
Q(t) = dimensionless water influx;
function of to
(I I)
to = dimensionless time
lJ. = constant, 0.0863 (6.323 x 10-3)
k = aquifer permeability (Ilm2) (mD)
where k = water influx constant (m3/d/kPa) t = time (days)
P, = aquifer boundary (initial) pressure <I> = porosity, fractional
(kPa)
Il = water viscosity (mPa's)(cp)
p = oil-water contact pressure (kPa) c = effective rock, water compressibility,
Hurst (1943) proposed a modification of Equation (II) kPa-1 (psi")
wherein the influx constant is altered and a denominator rw = equivalent oil zone radius (m) (ft)
term, log (at), is added. The denominator compensates ~ = constant, 6.2792 (1.119)
for the gradually lengthening flow path of the water h = equivalent aquifer thickness (m) (ft)
through the aquifer as depletion progresses. Hurst's El = azimuth angle of aquifer inflow
modification is shown in Equation (12): (degrees)
The superposition theorem is applied to calculate water
dW,= c(p;-p) influx, We' The pressure history at the water contact is
(12)
dT log (at) divided into a series oftime intervals for which average
contact pressures can be estimated. These average pres-
where c = water influx constant (m3/d/kPa) sures define decrements between the initial aquifer
a = time conversion constant that depends pressure and the hydrocarbon interface pressure that are
on units of time assumed to be constant within each time interval. The
t = elapsed time from start of influx (h) superposition theorem holds that the aggregate effect
Van Everdingen and Hurst (1949) produced an unsteady of all these pressure differentials is equivalent to the
state water influx solution which can deal with infinite summation of their individual effects, each operating
or limited aquifers. This model is based on radial flow over its respective time interval. In practice, reservoir
from a concentric aquifer to an interior oil zone, but it parameters are chosen to calculate to as a function of
can be adapted to situations where the aquifer underlies the time intervals. Tables and figures ofQ(t) have been
or extends primarily in one direction from the oil pool. supplied by Van Everdingen and Hurst (1949) and in
Van Everdingen and Hurst overcame the site-specific the summary by Craft and Hawkins (1964). Craft and
nature of the solutions to the radial form of the diffusivity Hawkins also provide a good description ofhow to cal-
equation by providing their data in terms ofdimension- culate the summation of ~PQ(t) to get W as a function
less time and dimensionless influx. Briefly, their of time. e
. formulation is as follows: Carter and Tracy (1960) developed a method based on
Hurst's (1958) simplification of the Van Everdingen
W, = BL [~p. Q (t)] (13) and Hurst unsteady state influx calculation. The Carter-
Tracy method gives answers similar to those of Van
Everdingen and Hurst without the iterative solution
(14) involving the conventional material balance equation
and the water influx summation equation.

El 7.8 MULTIPLE UNKNOWN MATERIAL


B= Amcr ' h - (15) BALANCE SITUATIONS
t''Y w 360
The solution methods outlined rely on separately
where We = water influx (m") (bbl) determining relationships for secondary unknowns in
B = water influx constant (m3/kPa) the material balance equation, namely the gas cap to oil
(bbllpsi) zone ratio, m, or the water influx term, We' A second
technique utilizes a simultaneous solution for oil in place
and a secondary parameter. Theoretically, given

125
DETERMINATION OF OIL AND GASRESERVES

multiple pressure and production combinations, the by Eo, s, and Eg, respectively. The s, components may
material balance equation could be simultaneously be deleted, except in the case of undersaturated oil pools.
solved for multiple unknowns. In practice, transient ef- The final right term, We' is calculated by the unsteady-
fects, data errors and unrepresentative averages make state water influx equation, Equation (13). Alternatively,
the simplistic simultaneous solution unreliable. the Carter-Tracy influx formulation could be used.
Havlena and Odeh (1963) presented an algebraic There are many different formulations of the straight-
rearrangement of the material balance. Their technique line material balance method. The reader is encouraged
involves calculating production and expansion entities to reference the comprehensive and readable presenta-
that are interrelated as terms of a linear equation. Since tion by Havlena and Odeh (1963). Figure 7.7-1 shows
the pressure-production-time points plot as a straight the form of the straight-line plot for a pool with un-
line, graphical methods can more easily be used to de- known oil zone and gas cap size, and Figure 7.7-2
termine the best solution for the dataset. Havlena and portrays one with unknown oil zone and water drive.
Odeh emphasized the idea of examining multiple val- McKibbon et al. (1963) provide an excellent example
ues of a parameter by means of a statistical variation of the application of the straight-line material balance
factor. In some circumstances, this approach provides a to an oil reservoir with active water influx.
useful supplementary measure of how well the entire
pressure-production history is satisfied by a particular
reservoir solution.
The straight-line method involves the use of variable
groups. The reservoir circumstances determine which
variable groups are plotted against each other. This N
method attaches a significance to the sequence and
direction of the plotted points and the shape of the
resulting plot. The variable groups can be effectively
computed and plotted with a spreadsheet program, u,
particularly if the derivation of PVT data is automated
through macros. The analyst must then examine the
sequence and configuration of the plot points to assess
their meaning. N =oil in place
With minor rearrangement, Equation (2) may be Btl
E,+rnsE g
rewritten as: g'
Source: Havlena and Odeh, 1963.

N, [B, + B,(R,-R,,)] + (W,-W,) a, - G,B"


Figure 7.7-1 Straight Line Plot for Oil Zone and
Gas Cap Case
The usual criteria for a successful material balance
solution are consistency of the results and agreement
+ --" J
mB (B.-B,,) + W, (16) with volumetric calculations. The consistency aspect is
n, often left as a rather nebulous, unquantified factor, but
Havlena and Odeh offer a method to systematize it.
where cf = formation compressibility Agreement with volumetric oil in place estimates can
Cw = water compressibility be overemphasized. Volumetric calculations tend to
B, = formation volume of oil and originally focus on total oil in place due to their reliance on geol-
dissolved gas ogic interpretations and petrophysical data. Material
balance oil-in-place is the active oil that takes part in
Using Havlena and Odeh terminology, the left side of the depletion history. The similarity of volumetric and
Equation (16), denoted by F, represents the net reser- material balance oil-in-place values should not be
voir volume ofproduction. The expansion terms for oil, overrated as a measure of the accuracy of either.
rock and water, and gas on the right side, are denoted

126

$
MATERIAL BALANCE DETERMINATION OFHYDROCARBONS INPLACE

Formal computer programs are available to perform


many material balance calculations. They handle much
of the repetitive computation and greatly speed the
solution process. However, users must be sure that they
understand how such programs work. The methods must
fit the problem and be compatible with the available
dataset.
Havlena and Odeh (1963) caution against total auto-
mation ofthe straight-line material balance, because the
N B=
sequence and direction of successive points provide in-
N = oil in place formation as to the nature ofthe solution. The engineer
o0 IdpQ(A1 D) should take care to scrutinize this aspect ifmachine plots
Eo are utilized in the straight-line method.
Source: Havlena and Odeh. 1963. References
Carter, R.D., and Tracy, G.W. 1960. "An Improved
Figure 7.7-2 Straight Line Plot for Oil Zone and Method for Calculating Water Influx." Trans.,
Water Influx Case AIME, Vol. 219, p. 415.
Craft, B.C., and Hawkins, M.F. 1964. Applied
Although it is theoretically possible to solve for Petroleum Reservoir Engineering. Prentice Hall,
multiple unknowns with the straight-line method, in Inc., Englewood Cliffs, NJ, p. 205.
practice, difficulty is met in some cases. Highly accur-
Havlena, D., and Odeh, A.S. 1963. "The Material
ate data are needed to solve simultaneously for a notable
Balance as an Equation of a Straight Line."
gas cap and an oil zone, or for a gas cap, oil zone and
Trans., AIME, Vol. 228, p. 896.
water influx. The difficulty in these two cases relates to
the high compressibility of gas and its large potential Hurst, W. 1943. "Water Influx Into a Reservoir and
impact on the pressure response. its Application to the Equation of Volumetric
Balance." Trans., AIME, Vol. 151, p. 57.
In conclusion, the straight-line requirement does not
prove the uniqueness of the solution, but is one of the - - -.. 1958. "The Simplification of the
conditions that a satisfactory solution should meet. As Material Balance Formulas by the Laplace
always, the quality of the solution will depend on the Transformation." Trans., AIME, Vol. 213, p. 292.
quality and quantity ofthe input data and on the ability Hutchinson, C.A. 195I. "Effect of Data Errors on
and thoroughness of the analyst. The straight-line Typical Engineering Calculations." Paper pre-
method is recommended as being robust and effec- sented at SPE of AIME meeting, Oklahoma City,
tive. Its dynamic nature is a valuable supplement to OK.
traditional methods. McKibbon, lH., Paxman, D.S. and Havlena, D. 1963.
"A Reservoir Study ofthe Sturgeon Lake South
7.9 COMPUTER SOLUTIONS
D-3 Pool." JePT, Vol. 2, No.3, Fall 1963, p. 142.
Computer spreadsheets are valuable tools in material
Schilthuis, R.l 1936. "Active Oil and Reservoir
balance work. They greatly reduce laborious calcula-
Energy." Trans., AIME, Vol. 118, p. 33.
tions and allow easy sensitivity analyses with varied
data. A noteworthy advantage of spreadsheets is that Van Everdingen, A.F., and Hurst, W. 1949. "The
the user retains complete knowledge and control of the Application of the Laplace Transformation to
computation method. Flow Problems in Reservoirs." Trans., AIME,
Vol. 186, p. 305.

127
i

g
PART THREE
ESTIMATION OF RECOVERY

FACTORS AND FORECASTING

OF RECOVERABLE HYDROCARBONS

R
---
Chapter 8

OVERVIEW OF PART THREE

8.1 INTRODUCTION gas injection, thermal stimulation, and carbon dioxide


Part Two focuses on in-place hydrocarbons or resources; flooding.
Part Three addresses reserves, which are the portion of Another method of improving recovery from oil
the resource, or the quantities of oil and gas and related reservoirs is by the use ofhorizontal wells, which allow
substances that are economically recoverable under drainage from larger areas than vertical wells. Chapter
known technologies and a generally acceptable forecast 16 discusses horizontal wells.
of future economic conditions. Reservoir characteristics that may affect hydrocarbon
Forecasting of recoverable hydrocarbons may be recovery include heterogeneity and reservoir dis-
approached from several standpoints: recovery factor continuities, both vertical and lateral; the structural
as a percentage of original in-place resources; statisti- characteristics of the reservoir; the presence of natural
cal analogies, reservoir simulations, and material balance fractures, both open and closed; pore size geometry and
techniques; or methods such as decline analysis, where distribution; permeabilities; in situ stresses and fracture
the determination of in-place hydrocarbons is not a orientation; parting pressures (injecting fluids); and
requirement. reservoir pressure.
Many factors may affect the recovery of hydrocarbons: Hydrocarbon characteristics that may affect recoveries
Depletion mechanisms and the timing of the include viscosity, composition, and the pressure-
implementation of various recovery methods volume-temperature relationships of the hydrocarbons
in the reservoir. The interrelationship of fluids and
Reservoir and hydrocarbon characteristics
reservoir rock, expressed in terms such as interfacial
Well spacing, completion techniques, mechanical tensions and wettability, control fluid movement in a
conditions, and production equipment reservoir. The overall contrast between the mobility of
The natural depletion mechanisms for oil include, but fluids in a reservoir significantly affects recovery.
are not limited to, primary production mechanisms in The well spacing, completion intervals within wells,
which reservoir fluids are produced as a result of the completion techniques such as fracturing, and proxim-
energy of fluid expansion, solution gas drive, water ity of wells to underlying water or a gas cap are all factors
drive, gas cap drive, compaction drive, and combina- to consider when analyzing recoveries. Mechanical
tion drive. These primary production mechanisms are equipment such as compressors can also significantly
described in Chapter 9. affect recoveries as well as the abandonment of wells.
Production of natural gas generally involves primary
depletion using surface compression, but recovery of 8.2 PURPOSE OF DEPLETION
liquid- and sulphur-rich gases often utilizes re-injection STRATEGY
of dry gas or cycling to maximize recovery. The deple- The purpose of a depletion strategy is to maximize
tion methods for natural gas recovery are covered in project economics and the recovery of hydrocarbons.
Chapter 10. While this may sound obvious, the current focus on
Primary oil recovery can be improved by secondary and quarterly earnings by most North American sharehold-
tertiary recovery schemes referred to as "enhanced re- ers, coupled with a tough economic climate, often results
covery." Chapters II through 15 describe the various in the need for immediate cash flow, which sometimes
enhanced recovery methods used in oil reservoirs: water- overrides longer term business strategies. However, it
should not preclude companies from investigating other
flooding, hydrocarbon miscible flooding, immiscible

131
DETERMINATION OFOILAND GASRESERVES

development options and addressing those that meet their The reliability of techniques to forecast reserves and
financial constraints. production improves during the life of the pool as more
The development of a depletion strategy should options become available. In the very early stages, with
ultimately result in the identification of all potential re- little more than geophysical, geological, and wellbore
coverable reserves and the establishment ofa framework data and test information available, it is common prac-
that can maximize revenues from the project. tice to rely on analogy and statistical data for preliminary
Developing a depletion strategy early in a project is very reserves estimates.
important because the timing of the implementation of During subsequent phases of reservoir depletion, the
various production strategies could be critical. It may availability of increasing volumes of information may
not be prudent to continue primary production without lead to the use of two more sophisticated techniques
fully addressing a depletion strategy for a pool. The of reserves estimation: numerical simulation and
following are examples of what could happen: decline curve analysis. These are the techniques most
1. Depleting a gas cap could cause a disastrous commonly used for reserves estimation and production
decrease in the recovery factor of an oil pool. forecasting.
2. Production from an oil pool to the extent that the The use of numerical simulation is not restricted to
pressure drops below the critical gas saturation in reservoirs with significant producing histories, but the
the reservoir prior to commencement of a water- ability to calibrate the reservoir model developed by
flood could have a detrimental effect on recovery. matching historical performance offers far more reli-
able results although the technique is often expensive.
3. Gas production with the pressure declining
This technique is of particular value where decisions
significantly below the dewpoint in a retrograde gas-
are necessary regarding the feasibility of some form of
condensate reservoir before implementing a dry gas
enhanced recovery mechanism. Numerical simulation
cycling scheme could result in a dramatic decrease
is discussed in Chapter 17.
in liquid recovery.
Decline curve analysis is both used and misused in
Planning the depletion strategy during the initial
reserves and production forecasting, and it has wide-
development stages of a pool will also identify the app-
spread use in every aspect ofreservoir depletion. Clearly,
ropriate data that should be gathered and accumulated
the more established a decline trend becomes, the more
through both the drilling and the production stages of
reliable the extrapolation ofthat trend, provided the un-
development. The availability of this information will
derlying reservoir or production mechanism that is
assist in identifying the most economically feasible
causing the decline does not change. Decline curve
depletion mechanism.
analysis is discussed in Chapter 18.
8.3 TECHNIQUES FOR RESERVES In Part Two, the techniques for determining the most
AND PRODUCTION FORECASTING likely in-place hydrocarbon volumes are discussed. The
The techniques used for reserves estimation and assignment of recovery factors to these volumes at this
production forecasting vary depending upon several stage, particularly in the case of oil, requires an
criteria: assessment ofthe reservoir environment and the recov-
The reservoir depletion strategy ery mechanism in order to determine likely performance
by analogy to similar, and preferably nearby, pools.
The type of depletion mechanism, both existing and
In westem Canada, a wealth of statistical data is avail-
future
able from the Alberta Energy Resources Conservation
The stage of reservoir development and depletion Board (ERCB); the B.C. Ministry of Energy, Mines,
The extent of the production history and Petroleum Resources; and the Saskatchewan
The constraints that have been imposed on produc- Department of Energy and Mines. Some ERCB data is
tion by regulation, markets, or the physical nature of presented in Chapter I 9.
production facilities .

132

_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _. .d
Chapter 9

NATURAL DEPLETION MECHANISMS


FOR OIL RESERVOIRS

9.1 INTRODUCTION 9.1.2 Solution Gas Drive


Pressure drops in a reservoir caused by the withdrawal The predominant source ofenergy for solution gas drive
of some of the fluids initiate the expansion of the comes from the expansion of gas released from the oil.
remaining fluids. Oil, gas, and water are then produced As the pressure drops in a reservoir, the ability of the
as a result of their expansion and the expansion of the oil to keep gas dissolved is reduced, and free gas is re-
surrounding reservoir rock. This recovery process leased. With further pressure reduction, the free gas
is called a natural depletion mechanism. The names expands and displaces oil towards the producing wells.
for the various natural depletion mechanisms-fluid Because of its highly compressible nature, the gas will
expansion, solution gas drive, water drive, combination expand and displace significantly more oil than an
drive, and gas cap drive-are associated with the major initially equal volume of liquid.
contributing source of expansion energy. When more In an undersaturated oil reservoir, that is, one without
than one major source of expansion energy contributes any initial free gas, the initial depletion mechanism will
to the depletion process, it is referred to as a combination be due to the expansion ofoil. Generally, there will be a
drive. direct relationship between the volume and rate at which
This chapter discusses the natural depletion mechanisms, the oil is produced and the pressure reduction, as shown
the types of predictive tools and their applicability in Stage I in Figure 9.1-\. When the pressure drops
at the different stages of development of a reservoir, below the bubble point, free gas is released and becomes
and the factors affecting recovery. the major source of expansion energy. Gas-oil ratio
does not significantly increase during this stage until
9.1.1 Fluid Expansion
the critical gas saturation is reached. Because of the
Fluid expansion exists as a natural depletion process compressible nature of the gas, with continued oil
when only one mobile fluid exists in the reservoir. (Fluid production, the pressure drop is significantly reduced
may refer to either gas or oil.) The withdrawal of some and the oil rate will be fairly constant, as shown in Stage
of this fluid will cause a pressure drop. The remaining II of Figure 9.1-\.
fluid will expand and displace itself toward the pres-
sure drop. Because ofthe highly compressible nature of
Expansion SolullonGas Drive
gas, fluid expansion is generally the dominant deple-
tion mechanism in gas reservoirs. Conversely, because II III
ofthe low compressibility ofliquids, fluid expansion is
not a good source of depletion energy in oil-filled res- Pressure
,. .... -- .....
ervoirs. Fluid expansion in oil reservoirs exists by itself I
/ "\ \
~I \
only at pressures above the bubble point. At the bubble q!!'1
point, the gas dissolved in the oil breaks out of solution, Oil
rY/ 1
~I I
and the expansion energy associated with the compres- Production o
sive nature of this gas becomes the dominant depletion I
I
mechanism. Only oil deposits containing very under- /

saturated oil will be produced with fluid expansion ----_ .... /

as their dominant depletion mechanism.


Cumulative Oil

Figure 9.1-1 Solution Gas Drive Reservoir

133
DETERMINATION OF OIL AND GAS RESERVES
,
As the pressure continues to drop, the evolved free gas
will reach the critical saturation; at this point, gas will
start to move and will be produced in conjunction with
the oil. As the gas saturation increases, the ease with
which gas moves within the reservoir relative to oil Partial
Water
increases, and the gas is then produced preferentially Drive .,
ty0t\ >
over the oil. With continued production and the associ- '\et '5\l.9......
. '!\QI.1\ ... '"
ated pressure drops, the gas continues to be evolved, 'ncteas\~9_ ~- Full
increasing its saturation level. The production of gas
increases and the production ofoil decreases. This com-
~ -- -~-
Solution
- ~~~~
Gas Drive
plicated procedure, represented by Stage III in Figure
9.1-1, continues until the rate at which gas is being
evolved from the oil is less than the rate of gas being Cumulative Oil

produced. At this point, the pressure and production rates


drop quickly, as shown in Stage IV. Figure 9.1-2 Comparison of Solution Gas Drive
and Water Drive Reservoirs
9.1.3 Water Drive
An oil deposit is considered to be produced by water 9.1.4 Gas Cap Drive
drive when the predominant source of expansion en- A reservoir that initially contains free gas as well as the
ergy comes from the water-filled portion of the reservoir. gas dissolved in the oil will benefit from the additional
Since water has a lower compressibility than oil, the expansion energy of the free gas. If the volume of free
volume of water needs to be significantly larger than gas is large enough so that this source of expansion
the oil-filled portion of the reservoir. energy overshadows the effect of other sources of en-
The pressure in the oil deposit will drop as production ergy such as solution gas drive, the primary depletion
is initiated. As the pressure gradient reaches the aqui- mechanism is called a gas cap drive.
fer, the water starts to expand, displacing the oil toward As in water drive reservoirs, the oil undergoes an
the producing wells. If the aquifer is large enough and initial pressure drop until the pressure gradient reaches
thus has sufficient expansion energy, all the mobile oil the gas cap. The gas then expands and displaces the oil
will be produced without any further pressure drops. toward the producing wells. If the gas cap is large
The oil rate will remain constant until the aquifer con- enough, the oil deposit will undergo only minimal pres-
tacts the producing well, after which the water sure drop, and the oil production rate will remain
production will increase as the oil rate drops. constant until the gas cap reaches the producing well
If the aquifer is not large enough to provide full interval. Due to relative permeability effects, the gas
pressure support, the pressure drops. When the bubble- production rate will then increase quickly as the oil rate
point pressure is reached, free gas will be released, and drops off. If the gas cap is not large enough to give com-
this gas will start to contribute significantly to the deple- plete or nearly complete pressure support, then as the
tion energy. This type of depletion mechanism is referred pressure drops, solution gas drive will be contributing
to as a combination drive because there is more than free gas energy. The resultant drive mechanism is also
one significant source of depletion energy. Figure 9.1-2 referred to as combination drive. Figure 9.1-3 shows
shows the relative difference between solution gas drive, the response ofa gas cap drive reservoir that becomes a
full water drive, and a partial water drive. combination drive reservoir.
In many situations, at a localized area around the As in water drive reservoirs, many gas cap drive
producing wells, the water contact will rise dramatically reservoirs are also subject to coning effects. Because of
and effectively water out the wells. This phenomenon the inherent differences in viscosity of gas and oil,
is called "water coning." The consequence of water con- coning is often more serious in gas cap reservoirs than
ing is that large volumes of oil will be trapped and thus water drive reservoirs. In the presence of gas coning,
become unrecoverable. In reservoirs that are subject to recovery factors tend to be relatively low.
coning, recovery factors tend to be very low. The more
viscous the oil and/or the greater the vertical perme- 9.1.5 Compaction Drive
ability, the more dramatic the effect of coning on In weak, unconsolidated reservoirs, the pressure drop
recovery. due to the production of fluids causes an imbalance III

134

_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _FZ8
NATURAL DEPLETION MECHANISMS FOR OILRESERVOIRS

this "sandwich" effect. The recovery factor in this


situation would be fairly low.

___ Pressure , 9.2 FORECASTING OF


, RECOVERABLE OIL
Oil
,,,
Production
, , Throughout the productive life of a reservoir, there is
Rate
,,
always a need to establish the reserves. Recovery esti-
,
,, mates are used to justify capital spending, predict future
cash flow generation and, ultimately, estimate share-
holder value. Because of the importance of reserve
estimates, al1 available data should be used when deter-
mining the size of the oil deposit and the amount of oil
Cumulative Oil
that can be recovered economical1y. The amount and
accuracy ofthe available information increase as an oil
deposit passes through the various phases of the
Figure 9.1-3 Gas Cap Drive Reservoir production life cycle. Thus, the recommended method-
ologies used to estimate recoverable oil change as the
the stress within the bulk rock, and the weight of quantity of information increases.
the overburden causes the bulk rock to compact. Two basic approaches are used to establish reserves for
The compacting rock squeezes the internal fluids, an accumulation. In the first approach, the ultimate eco-
thus maintaining the pressure. The resultant drive nomic recovery factor is established through analogous
mechanism is referred to as compaction drive. or analytical methods, and then applied to volumetric
Compaction drives are found in heavy oil reservoirs estimates based on geological interpretations (as dis-
and some natural1yfractured reservoirs where fractures cussed in Part Two). The second approach predicts future
tend to close as the reservoir is being depleted. Com- production rates, with reserves calculated as the sum-
paction drives can increase the recovery due to solution mation of the volume produced above the economic
gas drive by more than 10 percent of the original oil in limit. Table 9.2-1 and Figure 9.2-1 show the recom-
place. mended methodologies according to stage ofproduction
life and whether recovery factor or reserves are
9.1.6 Combination Drive predicted. Sometimes material balance and numerical
Often recovery from oil reservoirs is the result ofmore simulation are useful in the development stage
than one drive mechanism. A reservoir with combina-
The purpose of establishing a reserves estimate, the size
tion drive poses a difficult problem for reserve
and value of the reserves to the corporation, and the
estimation. General1y one depletion mechanism is domi-
nant at any stage of depletion or geographic area of the
reservoir. In a reservoir that has a smal1 gas cap, ini-
tial1y the dominant drive mechanism is solution gas
drive. When significant volumes of gas have evolved
out of solution, the dominant drive mechanism becomes
gas cap drive. For example, in the presence of both a
gas cap and an aquifer, the dominant mechanism at the
gas-oil interface would be gas cap drive, and the domi-
nant drive mechanism at the water-oil interface would
be water drive. It is critical for the evaluator to under-
*
a:
is
MaterialBalance ~>

Decline Analysis-)-
-,
-<-' Numerical Simulation )-
stand the reservoir and which drive mechanism is
Analytical Methods "-. ~ )-
dominant.
k-c7""c-_- Analogous Methods -~
In a combination drive reservoir that has both a water
leg and a gas cap, coning has a double effect in that Time
the gas cones downward and the water cones upward.
Thus, significant volumes of oil will be by-passed by
Figure 9.2-1 Recommended Methods
for the Stages of Exploitation

135

DETERMINATION OF OIL AND GAS RESERVES

Table 9.2-1 Recommended Reserves Forecasting Methods

Stage Forecast Method What is Forecasted


Exploration Analogous Recovery factor
Analytical methods Recovery factor
Delineation/ development Analogous Recovery factor
Analytical methods Recovery factor
Early life Analytical methods Recovery factor
Middle/late life Numerical simulation Reserves
Decline analysis Reserves
Material balance OOIP
Abandonment Actual production Reserves

amount and reliability of the data should dictate the volumes of oil, gas and water. In order to establish a
degree of effort put into calculating an estimate. Often recovery estimate, the results of the material balance
comparing two or more methods of evaluation is analysis must be combined with another prediction tech-
recommended. For example, an estimate determined nique or assumptions applied to the depletion of the
from decline analysis could be compared with one reservoir. For example, assumptions on abandonment
calculated using an analytical method. conditions define the pressure or production rate at which
Information on a particular reservoir can be obtained the field would be abandoned; thus the difference
by techniques such as drilling, coring, logging, produc- between volumes in place and the volumes remaining
tion testing, pressure testing, and fluid analysis. Prior at abandonment establishes the reserves. The material
to obtaining any ofthis information through the drilling balance method is discussed in detail in Chapter 7.
of the first well, the evaluator must resort to the use Decline analysis is the prediction of future rates based
of established information from analogous fields. on observed behaviors seen in actual production histo-
Analogies can be used to estimate recovery factors, ries. Typically, reservoir engineers forecast the future
initial production rates and decline rates that are applied well flow behaviours by extrapolating production his-
to the geological interpretation. The more similar the tory using a straight line. A single straight line will
analogous field is in size, depth, fluid properties and represent the entire life ofa reservoir only when there is
formation, and the closer its proximity to the prospect, one source of reserve energy in a simple homogeneous
the better the estimate of recovery factor will be. reservoir with all wells producing at a similar rate. In
In analytical methods, the mathematical equations that other words, a single straight line would represent the
represent material balance calculations have been sim- entire production life for only a few oil reservoirs. In
plified by making certain assumptions about particular using decline analysis, it is important to know what stage
parameters. By measurement of some and "guessing" of the natural depletion is represented by the produc-
at the remainder, the evaluator can establish the recov- tion history and is being represented by the prediction.
eries. Analytical methods have been developed for the More than one straight-line segment may be necessary.
more complicated processes such as solution gas drive, Other factors that can invalidate the use ofthe straight-
water drive and gas cap drive. Fluid expansion is a fairly line method are the existence of dual porosity systems,
simple process, and therefore production forecasting and layered reservoirs with each layer having different prop-
recovery estimates are generally solved directly from erties, and geographic areas of an accumulation with
the material balance equation. Analytically predicted each area having different properties. These phenom-
recovery factors along with either early life production ena, when incorporated into the prediction, change what
history or rates based on analogous fields are applied would have been a straight-line segment in a homogen-
to the geological interpretation in order to establish eous reservoir into a curved line. A technique to handle
recoverable volumes of hydrocarbons. geographic differences is to subdivide the reservoir i?to
Material balance, whether done graphically or areas of similar characteristics and perform dechne
numerically, attempts to establish initial in-place

136
NATURAL DEPLETION MECHANISMS FOR OIL RESERVOIRS

analyses on each area. Summing the various areas will of specified periods, and the interim production or
give a more accurate picture of the entire reservoir. pressure change is obtained by difference.
Numerical simulation, material balance and decline Short-cut methods are used when there is little data or
analysis are the methods most commonly used in the when a recovery estimate is desired quickly. These are
middle and late stages of depletion. These methods re- not recommended if a high degree of confidence is
quire a sufficient amount ofreliable data to be effective desired. Two short-cut methods are as follows:
predictors of recoveries. The following subsections Wahl et al, (1958) created various nomographs based
present general comments on the use ofthese methods on the Muskat Method using varying fluid properties
for the specific drive mechanisms. Numerical simula- and relative permeability characteristics.
tion and decline analysis are discussed in more detail in
The Roberts and Ellis (1962) Method uses the early
Chapters 17 and 18, respectively.
GaR data to predict future production. Using oil grav-
9.2.1 Solution Gas Drive ity and solution gas-oil ratios, the trend of producing
Oil recovery as a result of solution gas drive typically gas-oil ratio is matched to the published predictions.
ranges between 2 and 30 percent. The lower recoveries Decline Analysis
generally occur in low API, shallow, and low pressure
oil reservoirs, whereas the higher recoveries occur in The productive life for a solution gas reservoir that
high API oil, deep, and high pressure reservoirs. initially was above the bubble point is made up of four
distinct stages as shown in Figure 9.1- I. In a decline
Analytical Methods analysis, the analyst must know what stage of depletion
The most common analytical methods for estimating is represented by the production and must predict when
recovery in solution gas drive reservoirs are based on the reservoir will enter future stages. Because ofthe dif-
material balance concepts. Four methods are applicable ficulty of predicting when these future stages will occur,
below the bubble point. The most common analytical production decline analysis is generally not used as a
approach used is the Tracy Method, followed by the predictive tool until the production data reaches Stage
Muskat Method. III.
The following are the most commonly used analysis Reservoir Simulation
methods: In solution gas drive reservoirs, generally analytical
The Tracy or Tarner Method (Tracy, 1955) is a re- and decline techniquesare sufficient to estimate reserves.
arrangement of the basic material balance equation so In special situations typically dictated by geological
that pressure-dependent variables are grouped. Tamer discontinuities or heterogeneity and in naturally frac-
extended the method by incorporating the gas-oil equa- tured reservoirs, simulation may be warranted to
tion based on gas-oil relative permeability curves, establish reservoir flow and resultant recoveries.
resembling the Pirson and Muskat methods.
9.2.2 Water Drive
The Muskat Method (Muskat, 1949) uses the material
balance equation, written in differential form, in con- Oil recoveries in a water drive reservoir can typically
junction with the gas-oil relative permeability curves. range from 2 to 50 percent depending on factors
Because of the importance of these curves, some de- inherent in the reservoir.
gree of confidence in the data is crucial. A common method for evaluating recovery efficiency
The Pirson Method (Pirson, 1950) is based on the of water drive reservoirs uses the observed rise of the
Schilthuis material balance equation written in finite water-oil contact due to the water influx from the aqui-
difference form. This is essentially a material balance fer. This requires sufficient production history for the
equation that predicts oil recovery as a fraction of oil in water-oil contact to rise noticeably and a method of
place at the bubble point as the pressure declines over a measuring the rise. The relationship over time between
time period. The gas-oil relative permeability curve is the fraction of the reservoir invaded by water and the
required to define the producing gas-oil ratio. initial oil-filled reservoir compared to the oil produced
allows the prediction of the total oil recovery.
The Humble (Schilthuis) Method (Schilthuis, 1936)
Additional factors that affect reserves include coning,
is based on the Schilthuis material balance equation. In fractional flow, and economic limit.
the forecasting of future production, the equation is
applied to reservoir conditions at the beginning and end

137

DETERMINATION OFOILANDGAS RESERVES

Analytical Methods The last term on the right-hand side of Equation (2)
represents the effect of gravity on fractional flow. For
If the observation of the advance of the water-oil
a nontilted reservoir, this term becomes zero. The
contact is insufficient to directly predict recovery effi-
ciency, or direct measurement of the advance is not relative permeability vs. saturation relationship must be
possible, theoretical methods based on material balance reliable in order for this method to result in a reason-
are recommended with preference given to the Welge able recovery estimate.
Method. Assuming near-constant pressure at any time, The Dietz Method (Dietz, 1953) predicts oil
the reservoir recovery, ER , can be calculated using the recovery in reservoirs where the waterfront flows up-
relationship: dip along the base of the formation, causing the front
to assume a tilted position. This is especially notice-
W, w,e, able in reservoirs with a water influx rate that exceeds
E = --'---'---'- (I)
R HCV e the critical rate and in reservoirs containing viscous oil.
The MarshaI'Method(Marshal, 1957) uses Buckley-
where W, = water influx
Leverett theory to predict recovery in a stratified
Wp = cumulative water production
reservoir. From production history the time required for
Bw water formation volume
a given water cut to move between two rows ofwells in
factor
a field is obtained, and the velocity of the water front
We - Wp Bw net water influx at reservoir
determined. Field-measured water cuts are used to de-
conditions
scribe oil-water relative permeability curves. If enough
HCV, = cumulative water-invaded
water-cut ranges are available, the fractional flow curve
hydrocarbon volume
vs. distance in the reservoir, as defined by Buckley-
Ultimate recovery is then determined from reservoir Leverett, can be predicted.
production vs, cumulative water encroachment.
The Schilthuis Method (Schilthuis, 1936) determines
The following are the most commonly used analysis water influx by calculating the water flow from the aqui-
methods: fer to the reservoirin a series ofsteady-state steps. Water
The Welge Method (Welge, 1952) is recommended if influx is assumed to be proportional to the pressure dif-
production history data is insufficient to determine the ference between the aquifer and the reservoir. Since
efficiency of the water drive. Fractional flow of water, aquifer pressure is assumed equivalent to the initial
fw ' as a function of water saturation, is used to predict reservoir pressure, this method is valid only for
oil recovery. infinite-acting aquifers. The weakness in this method
is due to calculation of an aquifer constant from
I . _A_kk-,,"::..:(_.1.,:-:,pg::...s_in_CJ....:.) production history.
q,/.lo The Modified Hurst Method (Hurst, 1943) is similar
(2) to the Schilthuis material balance method in that it also
I + /.lw k ," . predicts water influx. The Hurst equation extends the
J.Lo k.; Schilthuis Method by accounting for the increase in the
drainage radius in the aquifer.
where A throughput area
k = formation permeability Correlations have been identified and should only be
used for quick evaluations or where data is minimal:
!c"o relative permeability to oil Khan and Caudle (1968) for thin oil columns, Caudle
.1.p = density difference, water density-
oil density and Silberberg (1965) for edge-water drive, Hutchinson
g acceleration due to gravity and Kemp (1956), and Henley et al. (1961).
CJ. = formation dip The analytical methods discussed in this subsection
q, total throughput rate assume that the water-oil contact rises as a flat surface,
Ilw = water viscosity either from the flank or from the bottom. If the reser-
Jlo ::;:;: oil viscosity voir is subject to coning, these analytical methods
k.w= relative permeability to water will overestimate oil production rates and ultimate

138
NATURAL DEPLETION MECHANISMS FOR OIL RESERVOIRS

recoveries. In the early life of the reservoir, i.e., prior the difficulty of predicting the timing of water break-
to water break-through, empirical correlations exist to through using decline analysis, this method is generally
identify the susceptibility of the wells to coning. These used after break-through has occurred.
methods forecast recoveries by estimating break-through Many approaches are available in analyzing production
time and the water-oil curve forecast. Using the water- after water break-through. Table 9.2-2 outlines the more
oil forecast, oil production can be estimated. Although commonly used combinations of production data plots.
reservoir simulation is recommended for evaluating In the analysis of any data set, it is recommended that a
coning situations, the following correlations are number of these combinations be used, selecting the
available for quick evaluation: combination that gives the best match.
I. Kuo (1989) combines various correlations that
determine critical rate calculations, break-through
time calculations, and water-cut performance pre- Table 9.2-2 Decline Analysis Plots Used
dictions on a PC spreadsheet for rapid analysis of after Water Break-through
comng. 1. Logoil rate vs, time (exponential decline)
2. Boumazel and Jeanson (1971) combine experimen- 2. Oil rate vs. cumulative oil (exponential decline)
tal correlations with a simplified analytical approach 3. Logoil rate vs. cumulative oil (harmonic decline)
based on the assumption that the front shape 4. Logcumulative oil vs. log cumulative oil plus
behaves like a straight line. This method may be water
applied to thick homogeneous reservoirs that are 5. Oil and waterratesvs. cumulative oil
horizontally fed. 6. Logoil and waterrates vs. cumulative oil
3. Sobocinski and Cornelius (1965) developed a 7. Log water-oil ratio vs, cumulative oil
correlation based on laboratory data for predicting 8. Logwater-Coil + water) ratio vs. cumulative oil
water coning time as it builds from static to
break-through conditions. This method involves
correlating dimensionless cone height against di- Material Balance
mensionless time.
Material balance methods for estimating reserves in
4. Kuo and DesBrisay (1983) developed correlations water-drive reservoirs frequently result in erroneous
based on numerical simulation to determine the estimates. A detailed understanding of the supporting
sensitivity ofwater coning behaviour to various res- aquifer is required for any degree ofreliability. Often
ervoir parameters, including the ratio of vertical to information about the aquifer is extremely difficult to
horizontal permeability, the ratio of perforated in- obtain. Knowledge that is critical includes the size of
terval to oil thickness, the production rate, and the the aquifer, the strength or pressure support provided
mobility ratio. by the aquifer, and the areas of the oil reservoir that
5. Numerous correlations have been developed receive pressure support. In addition to an estimate of
based on the theoretical curves by Muskat for original oil in place, the parameters defining the aquifer
homogeneous reservoirs. The best known correla- must be solved from the production and pressure his-
tions include Muskat and Wuckoff(l935), Chaney tory data. With the addition of these unknowns, the
et al. (1956), and Chierici et al. (1964). All these material balance method has a greater number ofvari-
methods use the theoretical curves to obtain a criti- abies to solve than it has equations. Because of this,
cal production rate, the maximum production rate material balance generally results in multiple estimates
at which oil can be produced without coning. In of original oil in place.
order to estimate recoveries, a way of forecasting Early in the production history of a reservoir, material
water-oil ratio and oil production must be incorpo- balance methods may give erratic results for water in-
rated. Therefore, these correlations in themselves flux due to inaccurate pressure measurements or because
will not forecast recoveries. well pressure measurements may not be an accurate rep-
Decline Analysis resentation of actual average reservoir pressure. In the
early life of depletion, an erroneous negative water
In some water drive reservoirs, the production influx may be calculated.
forecast might be represented by two straight-line
segments, pre- and post-water break-through. Due to

139

F
DETERMINATION OF OIL AND GASRESERVES

Reservoir Simulation and pro-rated back to the individual wells, sometimes


In reservoirs where coning is a key issue, a reservoir result in erroneous amounts and allocation of gas
simulation radial coning model is recommended. production. The accuracy ofgas production depends on
Reservoir simulation is discussed in more detail in the frequency and method of measurement and the
Chapter 17. variation between wells in the reservoir.

9.2.3 Gas Cap Drive Reservoir Simulation


Oil recoveries in a gas cap drive reservoir can be as Because ofthe relatively higher mobility ofgas, careful
high as 60 percent depending on factors inherent to the planning is critical if a reservoir simulation model is to
reservoir. Three dominant factors influence recovery: be used. The grid blocks and time steps should be small
I. Since the gas cap provides the recovery energy, it enough that the movement ofgas can be physically rep-
resented by the simulator. If coning is an issue, a radial
must be of sufficient size to displace oil to the pro-
ducing wells. In general, the longer the gas cap can model is recommended. Reservoir simulation is
discussed in more detail in Chapter 17.
maintain the pressure, the greater the recovery.
2. High vertical permeability allows the liberated 9.2.4 Combination Drive
solution gas and oil to segregate, adding additional In a combination drive reservoir, generally one
energy to the gas cap. depletion drive mechanism is dominant at a particular
3. Early gas break-through increases the gas-oil ratio time or in a particular area of the reservoir. Therefore,
significantly, thus removing the main source ofdrive in generating production forecasts, it is necessary to
energy. identify the predominant sources of energy throughout
the life of the reservoir and to identify the predominant
Analytical Methods sources of energy affecting a particular geographic area
Because the drive mechanism in gas cap drive of the reservoir. Because of the complexity of predict-
reservoirs is frequently combination drive, generally in ing the start and shape of the future production affected
conjunction with solution gas drive, the recommended by different dominant depletion mechanisms, decline
methods for prediction of recoverable oil are decline analysis techniques generally are not attempted until the
analysis, material balance and reservoir simulation, all last stage. Techniques appropriate to the specific deple-
of which take into account the complicated nature of tion mechanism dominant during the last stage of
the reservoir. Short-cut methods include the following: depletion should be used.
The Welge Method (Welge, 1952), as previously 9.3 FACTORS AFFECTING OIL
described for water drive reservoirs, may be used for RECOVERY
low viscosity oil reservoirs.
Although the drive mechanism is the primary factor
The Dietz Method (Dietz, 1953), as previously influencing recoveries, numerous other factors, either
described for water drive reservoirs, may be used in inherent to the reservoir or resulting from human inter-
reservoirs where the gas cap overruns the oil along the vention, influence ultimate recovery. The following
reservoir flank. In this case, the rate ofadvance must be subsections address some of these other major factors.
below the critical rate for the method to be valid.
These analytical methods assume the gas-oil contact will 9.3.1 Production Rate
advance as a flat interface. If the reservoir is subject to The production rate, qo' of a well is defined by the
severe coning, these methods will overestimate both the radial flow equation:
production rate and the recovery. The correlations de-
scribing water coning can also be modified to estimate 21tkk"h (Pr- Pw)
q = (3)
gas corung, o IJ)n(r,lrw )
Material Balance where k = permeability
Since gas is an important fluid in the recovery of oil in k,o = relative permeability to oil
gas cap drive reservoirs, a word of caution is advised h = net pay
when using the material balance method. Oil field mea- Pc = in situ pressure of accumulation
surement practices, where gas is measured periodically Pw = wellbore pressure
110 = viscosity of oil

140
NATURAL DEPLETION MECHANISMS FOR OILRESERVOIRS

r, = external boundary radius In general, lower API oil receives a lower price at the
rw = wellbore radius refinery. Since the price directly impacts the economic
For natural depletion mechanisms, the only parameters limit, the limit would be reached sooner for lower priced
that can be altered due to human intervention are near- crude.
wellbore permeability and producing pressure. The 9.3.3 Reservoir Characteristics
near-wellbore permeability can be enhanced through
Reservoircharacteristics can affect recovery factors from
stimulation techniques such as acidizing and fracturing.
theoretical calculations primarily because of heteroge-
The producing wellbore pressure can be reduced by the
neities in the reservoir. Generally, heterogeneities cause
installation and optimization of artificial lift equip-
a reduction in reserves either by (I) decreasing the
ment. For a given oil deposit, adjusting the production
amount of oil in place that can be effectively tapped by
capability of the wells will not alter the theoretical
the wells, or (2) causing uneven depletion of portions
quantity ofmoveable oil, but will affect the recoverable
ofthe reservoir, in turn resulting in a greater amount of
. resource through economic limit, as demonstrated in
oil being left in the ground because it is uneconomic to
Figure 9.3-1. Ifthe only difference between the two cases
produce. Some ofthese reservoir characteristics include
shown is the production capacity of the well, the cumu-
permeability variations, dual porosity systems, naturally
lative production at the economic limit will be larger
fractured reservoirs with cemented fractures, and low
for the high rate case.
permeability stringers.
Although a heterogeneous reservoir generally has a
lower recovery than a homogeneous reservoir, some
heterogeneities can assist the drive mechanism, and thus
increase reserves. For example, in bottom-water-drive
reservoirs where coning is of concern, shale stringers
can restrict the advance of water, allowing higher oil
Reserves
production for a longer period of time. Also, open
uncemented, or partially cemented natural fractures
can help improve recoveries from low permeability
Theoretical
Recovery reservoirs that otherwise would be uneconomic to
Economic
produce.
Limit
In general, the more heterogeneous the reservoir, the
larger the difference in the actual reserves as compared
Cumulative Recovery
to the theoretical calculations.

Figure 9.3-1 Relationship Between Production 9.3.4 Reservoir Geometry


Rate and Reserves Many factors associated with the reservoir geometry
influence the amount of oil produced under primary
9.3.2 Oil Quality depletion. Some of these are the shape of the reservoir,
The type of oil in the reservoir directly affects reserves the continuity ofthe formation, the layering ofmultiple
through the volume of gas in solution and through oil sands, faulting, structure, and dip. These factors can
viscosity. Oils that have less gas dissolved in solution affect both the drive mechanism and the economic
have less reservoir energy for oil recovery under solu- viability of developing the accumulation.
tion gas drive; these are generally lower gravity oils. Depending on the predominant drive mechanism, the
Oil viscosity influences recovery in two ways. First, if geometric configuration will have varying degrees of
there are two fluids in a reservoir with significantly dif- effect. For example, in a solution gas drive reservoir,
ferent viscosities, oil production would decline quite vertical relief could allow the formation of a secondary
rapidly because ofconing or fingering ofthe other fluid. gas cap, which would maintain the evolved gas as an
Second, productivity of a well is inversely proportional energy source.
to viscosity (Equation 3). All things being equal, a more In general, the less continuous reservoirs would result
viscous oil would have a lower production rate and in a lower recovery because some parts of the reservoir
would reach its economic limit sooner. might not be in communication with the producing

141
,
DETERMINAnON OFOILANDGASRESERVES

wells. In this case, infill drilling to reach untapped oil If other wells are drilled into the same reservoir, but are
would result in an increase in reserves. Also, due to dis- far enough apart that their respective pressure gradients
continuities in the reservoir, gas-oil and water-oil will not interact until after the economic limit has been
contacts might not advance as a flat interface, and thus reached, each will behave as if it were the only well in
oil would be by-passed. the reservoir. If the densities of the wells are such
A layered reservoir poses a different type of problem, that their respective pressure gradients interact at
especially if the multiple zones have significantly dif- the economic production limit, the reservoir pressure
ferent reservoir characteristics. If one zone were more would be at the original level at the point of interaction,
prolific due to considerably higher permeability, it would resulting in an overall high average reservoir pressure
have a higher recovery factor than the less prolific at abandonment. Inserting a well midway between the
zone. In this case, it is often beneficial to estimate the two original wells will result in a lower average res-
recovery factor separately for the multiple zones. ervoir pressure at abandonment, and thus a higher
Because ofthe different behaviours of the various zones, economic oil recovery. However, the oil recovered per
a layered reservoir manifests itself as a hyperbolic or well will be less. With continued reduction in spacing,
harmonic decline if decline analysis is being used. the average reservoir pressure at abandonment will con-
tinue to drop, but in diminishing increments. The result
9.3.5 Effects of Economic Limit will be a typical relationship between the oil recovered
Whether a recovery factor is rigorously established above the economic limit and the number of wells in
through detailed techniques like numerical modelling the pool. The intersection of the oil recovery forecast
or estimated through engineering judgement, innate ass- and the economic limit establishes the reserves for this
umptions are made about the economic limit of the reservoir. The relationship between well spacing and
reservoir. In some cases the economic limit is estab- abandonment pressure is depicted in Figure 9.3-2.
lished in the current economic environment using known The point at which increasing the number of wells will
technology. The key factors affecting the economic limit no longer markedly increase the oil recovered when
are the prices for the hydrocarbons, the operating cost, producing above the economic limit is generally referred
the current fiscal regime, and encumbrances such as to as the optimum spacing (Figure 9.3-3). This assumes
overriding royalties and net profit interests. These that the revenue benefit from the additional recoverable
factors are discussed in Part Four. The following sub- oil in reducing spacing while moving from point a to
sections discuss some of the other factors that influence point b offsets the cost ofdrilling, completing, and equip-
the economic limit. ping the necessary additional wells, and provides the
Well Spacing required return on investment. Increasing the density of
wells beyond point b may be economic through the ef-
A single well in a large deposit of oil will theoretically fects of rate acceleration. However, the volume of oil
produce all of the moveable oil, but this would take a recovered above the economic limit will remain the same
very large number of years and would not provide the unless by having more wells and thus larger volumes,
optimum economic recovery. As the well is produced, the economy-of-scale factors will reduce the average
a pressure gradient is established in the reservoir. With economic limit per well. The optimum well spacing will
continued production, the pressure gradient moves fur- be unique for each deposit and should be established by
ther out into the reservoir, effectively reducing the a combined technical and economic assessment.
average reservoir pressure. As the average pressure
drops, the production rate of the well will drop propor- Facility Sizing and Constraints
tionately. When the radius of the area affected by the Facilities must be installed in order to separate the
pressure gradient becomes sufficiently large, a pseudo- produced oil, gas, and water. The size ofthe facility and
equilibrium is established in which the flow at the the resulting capital and operating costs (the economics
furthest boundary reached by the pressure gradient of the project) have an impact on the ultimate reserves.
is equivalent to the production rate of the well. The Very simply, if the capital cost of the required produc-
pressure gradient will continue to move further out into tion facility is greater than the potential revenue,
the deposit, minimally affecting the production rate, the reservoir will not be developed and produced, and
until the physical limits of the deposit are encountered. therefore cannot be considered to contain reserves, even

142

- .-sra
NATURAL DEPLETION MECHANISMS FOR OILRESERVOIRS

Original Pressure

Single Well Single Infill Multiple Infills

Average Abandonment Pressure

Figure 9.3-2 Relationship Between Well Spacing and Abandonment Pressure


the decline of the oil rate will be sharper, as depicted
in Figure 9.3-4. The decision whether to increase
Present ~ ~
Cumulative the capacity of the facility is based on an economic
p .....

, Oil
Value ~~
,, evaluation of the benefit of the additional oil and the
'\
~/ ,, cost of expansion.
,,
,
,,
,,
!
.,.~,/I~b
is
,,
,,
,, ~
," a E
,, ,,
o" Constrained
,r ,
,, od\.\C\\O{\

,, F==:::::=::-'l'lQ!ol!!!!alC!F",lu!"id,;..Po-'-
,,
Oil
Production .::
Number of Wells

Figure 9.3-3 Optimum Well Spacing

if it has been adequately delineated through drilling. A Cumulative Oil

facility sized large enough to handle the maximum ini-


tial production will continue to have high operating costs Figure 9.3-4 Effects of Facility Constraints
when oil volumes decline in the future, and will reach on Economic Limit
its economic limit earlier than a smaller, less expensive
facility that limits initial production, but has lower Regulatory Constraints
operating costs. In addition to the standard economic considerations of
Sometimes facilities need to be installed in oil fields to developing a reservoir (rate of return, payout, operating
handle increasing production volumes ofassociated gas costs, and facility costs), there are also the regulatory
and water. Installing large facilities that will not be constraints imposed by the local government agencies.
utilized for many years may not be economic, and the The purpose of these regulations is to ensure the
use of constraining facilities may be necessary. When conservation and responsible exploitation of a
a naturally declining oil rate reaches a facility constraint, depleting resource, to ensure that the equitable rights of

143
DETERMINATION OF OIL AND GASRESERVES

competing producers are met, and to protect the envi- Khan, A.R., and Caudle, B.H. 1968. "Scaled Model
ronment. Regulations with respect to well spacing, Studies of Thin Oil Columns Produced by Natural
location of wells on a spacing unit, production rate, Water Drive." SPE 2304.
water-oil ratios, gas-oil ratios, and hydrogen sulphide Kuo, M.C.T. 1989. "Correlations Rapidly Analyze
emissions have been established to meet the objectives Water Coning." O&GJ, Oct. 1989, pp. 77-80.
ofthese agencies. These regulations will, in some cases,
Kuo, M.C.T., and DesBrisay, C.L. 1983. "A
impose constraints on development scenarios and thus
Simplified Method for Water Coning
affect the estimates of recoverable hydrocarbons. This Predictions." SPE 12067.
topic is discussed in more detail in Chapter 23, The
Regulatory Environment. Marshal, D. 1957. "Mathematical Treatment of Water
Invasion of Oil-Bearing Formations." Erd. Kohle,
References Vol. 10, Dec. 1957, p. 825.
Bournazel, C., and Jeanson, B. 1971. "Fast Water- Muskat, M. 1949. Physical Principles ofOil
Coning Evaluation Method." SPE 3628. Production. McGraw-Hili, New York, NY.
Caudle, RH., and Silberberg, I.H. 1965. "Laboratory Muskat, M., and Wuckoff, R.D. 1935. "An
Models of Oil Reservoirs Produced By Natural Approximate Theory of Water Coning in Oil
Water Drive." SPEJ, Mar. 1965, pp. 25-36. Production." Trans., AIME, Vol. 114, pp. 144-
Chaney, P.E., Noble, M.D., Henson, W.L., and Rice, 161.
T.D. 1956. "How to Perforate Your Well to Pirson, SJ. 1950. Elements ofOil Reservoir
Prevent Water and Gas Coning." O&GJ, Vol. 55, Engineering. McGraw-Hill, New York, NY.
May 1956, pp. 108-114. Roberts, T.G., and Ellis, H.E. Jr. 1962. "Correlation
Chierici, G.L., Ciucci, G.M., and Pizzi, G. 1964. "A of Gas-Oil Ratio History in a Solution-Gas-Drive
Systematic Study of Gas and Water Coning by Reservoir," JPT, Vol. 14, Jun. 1962, p. 595.
Potentiometric Models." JPT, Aug. 1964, pp. Schilthuis, RJ. 1936. "Active Oil and Reservoir
923-929. Energy." Trans., AIME, Vol. 118, p. 33.
Dietz, D.N. 1953. "A Theoretical Approach to the Sobocinski, D.P., and Cornelius, AJ. 1965. "A
Problem of Encroaching and By-Passing Edge Correlation for Predicting Water Coning Time."
Water." Proc., Konikl. Ned.-Akad, Wetenschap, JPT, May 1965, p. 594.
Series B, Vol. 56, p. 83.
Tracy, G.W. 1955."Simplified Form of the Material
Henley, D., Owens, W.W., and Craig, F.F. 1961. "A Balance Equation," Trans., AIME, Vol. 204, p.
Scaled Model of Bottom Water Drives." JPT, Jan. 243.
1961, pp. 90-98.
Wahl, W.L., Mollins, L.D., and Elfrink, E.R 1958.
Hurst, W. 1943. "Water Influx Into a Reservoir and "Estimation of Ultimate Recovery from Solution-
Its Application to the Equation of Volumetric Gas Drive Reservoirs." JPT, Jun. 1958, p. 132.
Balance." Trans., AIME, Vol. 151, p. 305.
Welge, HJ. 1952. "A Simplified Method for
Hutchinson, T.S., and Kemp, C.E. 1956. "An Computing Oil Recovery by Gas or Water Drive."
Extended Analysis of Bottom Water Drive Trans., AIME, Vol. 95, p. 91.
Reservoir Performance." Trans., AIME, Vol. 207,
pp.256-261.

144

_____________n
Chapter 10

DEPLETION MECHANISMS
FOR NATURAL GAS RESERVOIRS

10.1 INTRODUCTIOJII
During the depletion of natural gas reservoirs, many Associated Gas
factors affect the production performance. The basic
characteristics and physical properties ofthe gas and its
associated constituents or products, and its proximity
and interrelationship to other fluids in the reservoir can
either enhance or adversely affect the recovery from
a pool. The most significant aspect, however, is the
compressibility and, conversely, in the reservoir, the
expandable nature ofpressurized gas. On average, a sig- Nonassociated
nificantly higher percentage of the gas in a reservoir is Gas
recovered through natural depletion mechanisms than
of the oil, which has lower compressibility. Source: Clark, 1960,
This chapter highlights some of the characteristics of
Figure 10.2-1 Classification of Gas Based on
the gas and the reservoir that influence recoveries and
Source in Reservoir
basic approaches in forecasting recoverable gas reserves.
10.2 CHARACTERISTICS OF NATURAL reservoir conditions and producing practices, the
GAS dissolved gas may come out of solution in the reservoir
The gases that constitute natural gas belong mainly to and form a "secondary" gas cap or add to a natural gas
the "paraffin series." The main constituent is methane. cap.
Impurities such as nitrogen, carbon dioxide, helium, and At low pressures in shallow fields, natural gas and crude
hydrogen sulphide may be present in natural gas. oil appear as distinct substances in the reservoir (Figure
The Alberta Energy Resources Conservation Board 10.2-2, Reservoirs A and B). As the pressure at which
classifies natural gas with less than one percent hydro- petroleum is found rises with increased depth, gas dis-
gen sulphide as "sweet." When the hydrogen sulphide solves in crude oil, and the high-boiling constituents
content is over one percent, the gas is classified as "sour." dissolve in the gas phase. Some fields have both oil and
gas in contact (Figure 10.2-2, Reservoir C). Deeper fields
Natural gas found by itselfin a reservoir and completely
at pressures over about 27 600 kPa (4000 psi) and at
in the gaseous state is classified as "nonassociated,"
temperatures ofmore than 95C (200F) contain single-
(Figure 10.2-1). Gas found in an oil reservoir with no
phase fluids that are not immediately distinctive as oil
free gas present except that which is in solution is class-
or gas fields (Figure 10.2-2, Reservoir D).
ified as "solution gas." Gas and oil may be found in a
reservoir in many different combinations when the field "Dry" gas reservoirs normally yield little or no surface
is discovered, and the relationship of the gas and oil liquid recovery with processing through normal lease
mayor may not change, depending on the reservoir and separation equipment.
fluid characteristics and on drilling, completion and pro- A gas is "wet" if hydrocarbon liquids are extractable in
duction practices. For example, gas may be found surface separation equipment, and may be produced
as free gas above the oil. This is called a "gas cap," and from a single-phase gas reservoir, a retrograde con-
the gas is classified as "associated" gas. Under some densate gas reservoir, or an "associated gas" reservoir.

145
-/
DETERMINATION OFOILANDGAS RESERVES

temperature between the critical and cricondentherm


Ground Level values, as shown by point B. Here the fluid is also in the
one-phase gaseous state. As pressure declines because
of production, the composition of the produced fluid
will be the same as for reservoir A, and remain constant
.\ containing Dissolved G until the dew-point pressure is reached (Point B 1)
A ........... 0\ Os _ _......
Below this pressure, liquid condenses out of the gas as
Water Water fog or dew, leaving the gas phase with a lower liquid
B content. The condensed liquid adheres to the walls of
the pore spaces of the rock, and is immobile. Thus the
gas produced at the surface has a lower liquid content
and the producing gas-condensate ratio increases. This
process of retrograde condensation continues until a
point ofmaximum liquid volume is reached (Point B2) .
Vapourization of the retrograde liquid occurs from B2
to the abandonment pressure at point B) and can be noted
by decreasing gas-condensate ratios on the surface.
When a retrograde gas condensate reservoir has
conditions on or very close to the dew-point line at
the time of discovery, it means that the percentage of
Source: Katzet al., 1959. intermediates (C2 - C6) is high.
Figure 10.2-2 Occurrence of Oil and Gas It is also quite common to find a volatile oil rim. In this
case, the gas cap would be exactly at the dew point.
10.3 DEFINITION OF RESERVOIR If the accumulation occurred as shown by point C, the
TYPES FROM PHASE DIAGRAMS reservoir would be in a single-phase (oil) liquid state,
Various types of reservoirs can be defined using since the temperature is below the critical temperature.
pressure-temperature phase diagrams (Figure 10.3-1). In this case, as the pressure declined, the bubble point
The area enclosed by the bubble-point and dew-point would be reached (Point C I). Below this point, a
lines is the region ofpressure-temperature combinations free-gas phase would appear. This gas is classified as
for which both gas and liquid phases exist. The curves "solution gas."
within the two-phase region show the percentage ofthe Ifthe same hydrocarbon mixture occurred at point D, it
total hydrocarbon volume that is liquid for any would be a two-phase reservoir, consisting of a liquid
temperature and pressure. Initially, each hydrocarbon or oil zone overlain by a gas zone or "gas cap." As the
accumulation would have its own phase diagram, which compositions of the gas and oil zones are entirely diff-
would depend only upon the composition of the erent from each other, they may be represented
accumulation. separately by individual phase diagrams. The oil zone
A single-phase gas reservoir at discovery is shown by will produce as a bubble-point oil reservoir and the gas
point A. Since the fluid in the reservoir during produc- cap will be at the dew point, and may be either retro-
tion remains at 150C(300F), it retains its gaseous state grade as shown in Figure 10.3-2 (a) ornonretrograde as
as the pressure declines along path A-AI' Furthermore, shown in Figure 10.3-2 (b).
the composition of the produced gas does not change The initial in-place gas and condensate for gas
as the reservoir is depleted. However, cooling and condensate reservoirs, both retrograde and non-
pressure drop in the wellbore and surface facilities retrograde, may be calculated from the available
allow the condensing of gas along the line A-A2 This production data by recombining the produced gas and
accounts for the production of condensate liquid at the condensate in the correct ratio to find the composition,
surface fro