DAY 2 MORNING

ANALOGY & VOLUMETRIC EVALUATIONS

Analogy Methods

ANALOGY METHODS
Analogy reserve/resource evaluations are primarily used to
Help define a prospect drilling location in the early stage of exploration, which supplements standard basin resource mapping, volumetric calculation of potential hydrocarbons, and perform the forward scoping economics of the project Progress the depletion plan of developing/producing a field or a reservoir, by correlating the known data with reasonable certainty and interpolating/extrapolating such data

Analogy methods should be used only if sufficient geological, geophysical, petrophysical and performance data, and a full detailed analysis are available

Analogy & Volumetric Evaluations

ANALOGY METHODS
Analogy methods are generally performed in two ways: Analytical
Geological/geophysical maps (channels, porosity map or PHI*H map Reservoir data (pressures, IP rate, compartment, EUR, RF) Well data, production patterns & natures

Statistical
Histogram of the above tabulated data (like a financial analysis chart)
A typical production behaviour, the best well/reservoir Bubble map (which can be re-iterated to analytical methods)

The challenge is to establish the similarities between the known reservoir and the to-be-applied reservoir

Analogy & Volumetric Evaluations

ANALOGY METHODS
Similarities should be established in
Geological/geophysical structural features, depositional environment & conditions, common risks, seals, sources Rock lithology, facies, cross-sections, vertical & areal heterogeneity Gross pay and net pay, lateral pay development, petrophysical interpretations (porosity, perm, facies, water saturation, core analysis, fractures) Hydrodynamics (initial pressures/temperatures, depletions, fluid properties and distributions) Production drive mechanisms Performance patterns (IP, flowing pressures, EUR, HIP, well spacing, drainage, volumes per unit)

Analogy & Volumetric Evaluations

ANALOGY METHODS
Cum Gas vs. Subsea Depth
0
100.00

Pine Creek 4-26-57-19W5 Core Air Perm vs Porosity Correlation

3066.8 3070.1

-500

3067.6 3068.3 3065.3

3069.2

-1,000
10.00

3067.9

3070.586 m

-1,500
Subsea Depth (m)

3064.7

3070.102 m 3070.196 m 3069.218 m

Pine Creek -2,000 Gold Creek Berland W

Air Perm (md)

3068.367 m 1.00 3070.6 3070.2 3067.938 m 3067.609 m 3066.776 m 3065.316 m 3064.768 m 3062.028 m 3061.107 m 0.10

-2,500

-3,000

Med Lodge

-3,500

3061.1 3062.0

-4,000 Shetler -4,500 0

60

overpressured fields

20

40

Cum Max Rate 100 60 Gas vs80

Cum Gas (Bcf)

120

140

160

0.01 0 1 2 3 4 5 6 Porosity (%) 7 8 9 10 11 12

50 Berland W 40 overpressured fields Pine Creek 30

20 Shetler Med Lodge 10 Gold Creek 0 0 20 40 60 80 Cum Gas (Bcf) 100 120 140 160

When we tried to correlate core perm with porosity to a deeper burial, the net overburden pressure was seen to have a huge impact on the permeability for this type of rock: the perm lost tens of times, which is believed to have dramatically decreased the net pay

Max Gas Rate (mmcf/d)

Analogy & Volumetric Evaluations

ANALOGY METHODS
Suppose your company acquire a lease in this area under certain development terms

Blood: 75 bcf; Taber South: 13 bcf Leopard: 6 bcf

Warner: 9.2 bcf Coaldale: 18 bcf

Taber: 12.3 bcf Stirling: 35 bcf

Analogy & Volumetric Evaluations

ANALOGY METHODS

Good infrastructure and exporting; competitive gathering with options takeaway

Analogy & Volumetric Evaluations

ANALOGY METHODS

Offset well initial production rate analysis

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ANALOGY METHODS

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Analogy & Volumetric Evaluations

ANALOGY METHODS

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Analogy & Volumetric Evaluations

ANALOGY METHODS
Dry hole and rate risk 761 wells analyzed, 530 producing wells From producing wells in histogram
Geometric mean 769 mcf/d Weighted arithmetic 470 mcf/d Use 450 mcf/d IP for production decline forecast profile

231 Bow Island tests/perfs/DSTs abandoned or bypassed

Not all geotechnical failures; many DSTs show bypassed pay

530/761 probability encountering producing distribution with average 450 mcf/d IP

PS=69.7%

Risked rate is 470*69.7%=329 mcf/d

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ANALOGY METHODS

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Analogy & Volumetric Evaluations

ANALOG METHODS

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Analogy & Volumetric Evaluations

ANALOG METHODS
Other analogies:
Well perfed good delivery Probability of success from sand analysis Decline patterns from decline analysis Proved economic/commercial

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Analogy & Volumetric Evaluations

ANALOG METHODS

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Analogy & Volumetric Evaluations

ANALOG METHODS

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Analogy & Volumetric Evaluations

ANALOG METHODS

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Analogy & Volumetric Evaluations

ANALOG METHODS

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Analogy & Volumetric Evaluations

ANALOG METHODS

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Analogy & Volumetric Evaluations

ANALOG METHODS
West Canadian Basin Leduc Pool/Field Recovery Factor
100% 90% 80% 70%
Current Recovery Factor

Ricinus W Duncan Lambert Wild River Limestone Chedderville 75% Worsley Liege Windfall Ricinus
588 bcf 61%

Strachan

1712 bcf 97% 1383 bcf 88%

60% 50% 40% 30% 20% 10% 0% 0 50 granor

Berland Saleski River 70% Simonette Lone PC Malmo 48% Nixon Fir (Jackfish) 52% Craigend Nevis

Bigstone 46%

Total PC
521 bcf 36%

House Groat smoky Obed

100

150

200

250

300

350

400

450

500

Cum Gas Production (bcf)

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Analogy & Volumetric Evaluations

ANALOG METHODS
Analogy methods heavily depend on the maturity of model reservoirs Analogy methods should consider multi-level model reservoirs (in a descending order of confidence):
Local analogy: my neighbor drills a well in his backyard Regional analogy: the same basin Global analogy: Anywhere in the world

New technologies should be factored in for the new prospects reserve calculation For proved reserve booking practice, analogy method has always been supplementary to deterministic methods (volumetric & performance), but this may change as SEC is changing rules to include probabilistic method
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Volumetric Evaluation

VOLUMETRIC EVALUATION

range of estimates

barrels per acres period Analogy/statistical static assessment

volumetrics

Arps decline

PTA/material balance/production data dynamic performance

Volumetric evaluation has been the key method for resource assessment and reserve booking in the early life of all E&P capital investment project processes. Volumetric assessments have direct ties to all subsurface technical work and geoscientific data input for probabilistic/analogy evaluations Public disclosure of initial reserve estimates are always from volumetric input, until reliable performance data indicate otherwise
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VOLUMETRIC EVALUATION
Uncertainty Questions
Max Resource Size

Resource Size Max/Min Volumes (HIP) Capture

Recovery Factor (RF)

Depletion Programs
Min Resource Size Max Reserve Size

Business Model Cost to Develop

RF

Market
Min Reserve Size

Investment Return Report Proved Reserves

Probable & possible reserves

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Analogy & Volumetric Evaluations

VOLUMETRIC EVALUATION
Question 1: What we found? Question 2:

Is it this big?
Question 3: How to develop? Question 4:
Discovery Well

What is the business proposal (to make money)?

Question 5: Can we publish these numbers?

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Analogy & Volumetric Evaluations

VOLUMETRIC EVALUATION
Generally volumetric evaluation is always about mapping the OOIP/OGIP or IOIP/IGIP volume of a reservoir Recovery Factor (RF) or Recovery Efficiency (RE) is about the performance, which can only be available after substantial productions The job breaks down to two people: Geoscientist to map OOIP Reservoir engineer to figure out RF
CUM (MBOE)

Oil and gas reserves are really the cumulative production of a reservoir/field until it is completely developed
Jean Laherrere

TIME

OOIP RF reserves

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Analogy & Volumetric Evaluations

VOLUMETRIC EVALUATIONS
Geoscientific work Trap types Accumulation types Seal quality Rock quality Pay column heights Pore volumes Fluid distribution Effective porosity (storage & pay) Typical values & ranges Energy support Reservoir engineering work Fluid properties/distribution Permeability/relative perm Pressures Drive mechanisms Reservoir heterogeneity (lateral/vertical/areal) Impact of geological features on flow behaviors Impact of fluid properties on flow behaviors Impact of well spacing & positions

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Analogy & Volumetric Evaluations

VOLUMETRIC EVALUATION
Gross bulk volume

A H gross
A
A H gross

Net bulk volume

Hgross

A H gross NTG

NTG, PHI, Sw, Boi

Total Pore volume

A H gross NTG PHI

Hydrocarbon volume

A H gross NTG PHI (1 Sw )

Hydrocarbon-in-place

A H gross NTG PHI (1 Sw ) / Boi

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Analogy & Volumetric Evaluations

VOLUMETRIC CALCULATION (field units)

Original Oil-In-Place (OOIP):

7758 A H net PHI (1 Sw ) / Boi

Original Gas-In-Place (OGIP): 43,560 A H net PHI (1 S w ) / Bgi

Area: Gross Height: Oil FVF: Gas FVF:

A (acres) Hnet (ft) Boi (bbl/stb) Bgi (cf/scf)

Standard Condition: P = 14.7 psi (1 atm) T = 60 oF (15 oC)

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Analogy & Volumetric Evaluations

VOLUMETRIC CALCULATION
Critical representative input matrix in calculating the hydrocarbon-in-places and thereafter the volumetric reserves: Structural input
Reservoir area, total rock volume or total pore volume

Petrophysical interpretations
Gross pay, net-pay, NTGR, porosity, hydrocarbon saturation

Pressure/Fluid data
Initial pressure/temperature, fluid PVT properties, fluid contact

Recovery factor
Effective drainage efficiency, drive mechanisms, well productivity & deliverability

Single set of each parameter (representative value or values)

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VOLUMETRIC EVALUATION
Overall the entirety and static picture of the reservoir should be descried & defined by geophysicists and geologists: depositions traps rock age stratigraphy porosity development top/bottom seals FWL, if any, & aquifer pay distribution column height formation dips

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Analogy & Volumetric Evaluations

VOLUMETRIC EVALUATION
Reservoir limit / boundaries must be determined by geoscientists for the base line before reservoir engineers can visualize the reservoir as a volumetric container for all dynamic descriptions, such as well test, flow assurance, drainage size, production data, material balance, and EUR

50 psi

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Analogy & Volumetric Evaluations

VOLUMETRIC EVALUATION
Petrophysical Data & Cross Sections Porosity data to identify hydrocarbon column & pay
Formations (top depth & bottom depth) Average porosity, range of porosity, effective porosity Porosity vs. perm relationship, porosity cut-offs (average porosity at different cut-offs) Average water saturations of identified pay zone

Data Sources
Openhole logs Core plugs, cuttings & chips Mud logs Capillary pressure analysis/SCAL PHI*H correlations: why?

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Analogy & Volumetric Evaluations

VOLUMETRIC EVALUATION
Column Height Well design, drilling and logging overview

What makes a reservoir?

Porosity from core and logs

Fluid from logs

Fluids and pressure gradients

Permeability

Producibility

Volumetrics

What is net pay?

Static Description

Dynamic Description

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Analogy & Volumetric Evaluations

VOLUMETRIC EVALUATION
Static Description
Defining the reservoir in a static condition How big is the trap? How much porosity is there? How is the porosity distributed? What are the in place fluid saturations? HCIIP/GIIP/STOIIP Static Data Seismic Core Logs Fluid samples Fluid pressures Analogues

Dynamic Data Fluid pressures Well tests Well performance history Interference tests Production logs Time lapse seismic Tracers

Dynamic Description
Defining the reservoir under flow/drawdown conditions RESERVES - what is recoverable? Depends on the development scheme (facilities, drive etc) and the way they interact with reservoir quality and connectivity

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Analogy & Volumetric Evaluations

VOLUMETRIC EVALUATION
GROSS PAY, NET PAY, NET-TO-GROSS-RATIO
True vertical pay intervals All hydrocarbon-bearing intervals likely to contribute to production (say all completed) All pay intervals with lateral development (drainage & inter-well continuity) Sweepable intervals under different drive mechanisms (waterflood, CO2, steam-injection) Pay contributions related to operational/economic limit; the permeability limit
An interval may contribute a few molecules of gas everyday, but will not meet economic criteria, and thus may not be considered net pay, but many such intervals could sum up as the net-pay

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Analogy & Volumetric Evaluations

VOLUMETRIC EVALUATION
Canadian Petroleum Society reports generally accepted minimum cutoffs: Permeability
Medium to high API oil Wet gas Unconventional (tight gas) 1 md 0.5 md 0.01 md 7 ~ 10% 2 ~ 3% 4~5% 50 ~ 60%

Porosity
Sandstones Dolomitized limestones for gas Carbonate oil

Water saturation

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Analogy & Volumetric Evaluations

VOLUMETRIC EVALUATION
FROM PHI*H TO K*H
For a vertical well, rate is described by Darcys radial flow equation (here for oil in bpd) Permeability * thickness (ft) Flow, in barrels per day

Pressure drop required to initiate flow (psi)

0.00708 * kh * P q B ln re / rw S
Drainage area radius/wellbore radius in feet(a large number) Skin factor a restriction to flow close to or at the wellbore

Formation volume factor Viscosity (cp)

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Analogy & Volumetric Evaluations

VOLUMETRIC EVALUATION
Fluid & Pressure Data Volume related data
Oil FVF Bo, gas expansion factor Bg, gas condensate ratio CGR

Performance related data

Initial reservoir pressure (under, over, depletion) Reservoir temperature Oil viscosity Bubble point or dew point pressure Initial gas solubility GOR Rock/fluid compressibility Lifting implications

Reserve filing related data

Hydrocarbon product quality, API gravity, shrinkage

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Analogy & Volumetric Evaluations

VOLUMETRIC EVALUATION
Recovery Factor or Recovery Efficiency Connected volumes
Compartmentalization, faulting

Well control
Optimized well spacing & drainage area per well

Mobility
Single well productivity based on rock perm / fluid viscosity

Reservoir types
Gas cap, under-saturated, saturated, naturally fractured

Production drive types

bottom/edge strong/weak water, solution, compaction, waterflooding, EOR

Wellbore pattern
Lifting options
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VOLUMETRIC EVALUATION
Recovery Factor % Drive Mechanisms Oil Oil expansion Gas expansion Gas Cap Solution Gas Water Drive Natural Fractured Gravity Segregation Tight Gas
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comments Gas

2~5 65 ~ 95 20 ~ 40 5 ~ 10 25 ~ 50 10 ~ 40 30 ~ 70 15 ~ 30% Very price sensitive 40 ~ 70 20 ~ 40 Balance of water strength & production Volumetric depletion Higher recovery associated with gravity

VOLUMETRIC EVALUATION
More on Recovery Factor
Sweep Efficiencies are also used. Numerical simulations on production performance data can help Empirical correlations are everywhere, but their usage should always be cautious
project scoping economics

Only use those from the same basin for analogous analysis Lab data may not be practical
SCAL & relative perm data might be optimistic

Always directly sensitized to field depletion & development plan (against cost of)

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drilling more wells drilling HZ wells completion strategies lifting opcost

Analogy & Volumetric Evaluations

ORMEN LANGE VOLUMETRICS

Pressure Depth Temp 4263 2750 62.8 145.04 psia m C F

Acre Gross Pay NTGR Phi Sg Bg RF

302 million m2 36.3 m 0.909 0.281 0.704 266 0.7

V= 1971.317 mm m3IGIP? What is the best estimate Gas-in-place 18609901 mm scf Reserve= 13026931 mmcf 13026.93 bcf 13.0 tcf

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Analogy & Volumetric Evaluations

VOLUMETRIC GAS-IN-PLACE W-83

Descriptions
Upper Cretaceous Naturally Fractured Sandstone Perf Depth: 2853 ~ 2560 mKB Porosity: 4.3% Net Pay: 36 ft (11 m) Sw: 40% Sg: 60% Tr: 68 oC (154 oF) Pr: 22,340 kPa (3240 psi) Gas Specific Gravity: 0.622 Gas Compressibility: 0.902 FVF: 212 scf/cf Gas Composition: C1: 94.12% C2: 3.37% CO2:1.5% Drainage Area: 1124 acres

W-83

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Analogy & Volumetric Evaluations

Class Exercise: W-83 Well Reserve/Resource Analysis

What is the total gas-in-place in standard sales condition (14.7 psi, 15 oC)? Without compression, if the well is operated against the line pressure of 1250 psi, what the raw recoverable gas volume? What is the recovery factor? If a compression is installed and the well can operate at 500 psi wellhead pressure, what will be the recoverable gas volume, and what is the recovery factor? Assume that the production mechanism is natural depletion