L2- Geology and resource

Geology
Conventional: Discrete fields or pools localized in structural or stratigraphic traps by buoyancy of oil or gas in water They have trap, seal, reservoir with defined thickness & lateral continuity.
USGS defines Continuous petroleum accumulations are those oil or gas accumulations that have large spatial dimensions and indistinctly defined boundaries, and which exist more or less independently of the water column

Geology
Continuous accumulations Two key geologic characteristics: (1) they consist of large volumes of rock pervasively charged with oil or gas, and (2) they do not appear to depend upon the buoyancy of oil or gas in water for their existence Because they may cover hundreds, or even thousands, of square miles, they may occur across a wide range of stratigraphic environments, each of which may have widely varying reservoir properties. Or They may exist in their source rock, never having migrated in to a carrier bed or reservoir This all means that it is very difficult to obtain even a properly framed stochastic view of how big or small these resources might be because it is not always clear how big an individual accumulation might be
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Characteristics
Conventional
Relatively high matrix permeability Obvious seals and traps High recovery factors The assessment of conventional resources focuses on the number of remaining undrilled prospects (discrete potential structural or stratigraphic traps, often a number in the tens, or possibly hundreds) and expected future field size characteristics.

Unconventional
Regional in extent, Diffuse boundaries, Low matrix permeability, No obvious seals or traps, No hydrocarbon/water contacts, Abnormally close to source rocks, Low recovery factors Includes tight sandstones, coal bed gas, oil and gas in fractured shale and chalk When originated by source rock, crude oils not heavy. Oil becomes heavy after degradation For continuous resource assessments, the basic unit of assessment becomes the number of wells that will ultimately be needed to develop the entire play area (often a number in the thousands), and the expected recovery per well 4

Unconventional Oil Resources

Unconventional Oil Resources

Natural bitumen and extra-heavy oil resources (billion barrels)

Source: WEO, 2010

Unconventional Oil Resources

Oil Shale resource (billion barrels)

Source: WEO, 2010

Technically Recoverable Resources

Source: PRMS Guidelines, 2011

PRMS - Resources classification framework

A deterministic estimate is a single discrete scenario within a range of outcomes that could be derived by probabilistic analysis. Uncertainty in resource estimates is best communicated by reporting a range of potential results. However, if it is required to report a single representative result, the best estimate is considered the most realistic assessment of recoverable quantities. It is generally considered to represent the sum of Proved and Probable estimates (2P) when using the deterministic scenario or the probabilistic 9 assessment methods.

Source: PRMS Guidelines, 2011

PRMS - Resources classification framework

Subclasses based on project maturity

Source: PRMS Guidelines, 2011

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PRMS - Resources classification framework

Change in uncertainty and assessment methods over the Projects E&P life cycle

Source: PRMS Guidelines, 2011

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PRMS - Resources classification framework

Timeline for example oil project maturity stages and assessment methods used

Source: PRMS Guidelines, 2011

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PRMS - Resources classification framework

Volumetric and Analogous Methods
Estimated Ultimate Recovery (EUR)

Volumetric equation for the volumetric equation for the PIIP PIIP

Area (A), net pay (h), porosity (), initial water saturation (Swi) and hydrocarbon formation volume factor (FVF) (Bhi) for oil (RB/STB) or gas (Rcf/scf)

Source: PRMS Guidelines, 2011

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PRMS - Resources classification framework

Material Balance Methods
pi, p = average reservoir pressure (psia) at reservoir datum and i stands for initial, T = average reservoir temperature at reservoir datum (oR), zi and z = gas compressibility factors evaluated at pi and T and any p and T, respectively, G = GIIP (scf), and Gp = cumulative gas production (scf) at any reservoir pressure (p).

Source: PRMS Guidelines, 2011

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PRMS - Resources classification framework

Reservior Simulation Methods (RSM)
The static geological, geophysical, petrophysical, and engineering data characterizing the subsurface reservoir structure in 3D The degree of uncertainty in the estimates (or the range of outcomes) is expected to decrease as the amount and quality of geoscience, engineering and production performance data increase. Compare the estimates obtained using several different methods
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Source: PRMS Guidelines, 2011

PRMS - Resources classification framework

Production Performance Trend (PPT) Analyses

Source: PRMS Guidelines, 2011

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Unconventional Resources Estimation

USGS Methodology
Resource assessments should be fundamentally based on geology. Probabilistic methods should be used. Assessment methodology is a means of quantifying geologic hypotheses and uncertainties

Source: USGS, Open File Report, 2011 - 1167

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USGS Old Methodology

In-place Methods
Volumetric calculationArea * thickness * porosity * hydrocarbon saturation * temperature/pressure corrections Recovery factors generally conjectural Primary method used by the assessment community prior to 1995 Still used extensively outside USGS

Productivity - based Methods

Based on productivities of cellsCells are roughly the size of the drainage area of a well Well productivities determined by decline-curve analysis
Estimated ultimate recovery (EUR)

Source: USGS, Open File Report, 2011 - 1167

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USGS Methodology
Productivity based methods
Estimates of numbers of cells based on: Area of assessment unit (AU) Percent of area already tested Area of a cell In USGS methodology, all of these are estimated as probability distributions

Advantages
Well productivities (EURs) make assessments more realistic Much more production data available compared to 30 years ago
Many more wells with longer producing histories Many more plays
Source: USGS, Open File Report, 2011 - 1167
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Revised USGS Methodology

Disadvantages
Assessments are tied to current engineering practice No estimate of volumes recoverable by future technologies Large data requirements

Features of Revised USGS Methodology

Wells instead of cells Risk more explicitAU risk, area risk, well risk Option to have mixture of two populationsSweet spots and nonsweet spots Direct estimation of uncertainty of mean EUR

Source: USGS, Open File Report, 2011 - 1167

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Revised USGS Methodology

Robustness
The revised methodology works for both data-rich and data-poor areas. Analogs used for data-poor areas The revised methodology is not tied to a specific geologic model. As better understanding of geologic and engineering controls develops, this can be accommodated in the assessments.

Source: USGS, Open File Report, 2011 - 1167

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Revised USGS Methodology

Minimum Requirement
Based on current USGS thinking of what is needed to have a successful shale-gas AU Could change in the future with increases geological understanding This list is specific to thermally generated gas in its source rock Biogenic gas would have different minimum requirement

Defining Assessment Unit (AU)

TOC>2 wt% Kerogen type I, II, or IIS Ro>1.1% Net thickness>15 m Gas is thermogenic
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Source: USGS, Open File Report, 2011 - 1167

Revised USGS Methodology

Desirable
High gamma-ray values in shale Hydrogen index of kerogen greater than 250mg/g Depth more than 1500m Not intensely structured Over pressured

Analysis
AU risk: Based on 5 Minimum requirement, what is possibilities that all requirement are met at some place within the AU Productive Area: How large the are that meet requirements Drainage Area: What is avg. drainage area of production well in AU Untested Area: What is untested are in production area?
Source: USGS, Open File Report, 2011 - 1167
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Revised USGS Methodology

Analysis
Sweet vs Non-Sweet : Within the untested area, what percent area falls within sweet spots? Success Ratio: Within the untested sweet spots, what percent of wells will have productivity greater than the minimum? EUR distribution: Within the untested sweet spots, what is the average EUR? Coproduct Ratios: What are the average ratios? For oil AU: Gas to oil and NGL to gas ratios, for Gas AU, liquid to gas ratio

Source: USGS, Open File Report, 2011 - 1167

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