10/10/2011

Production Forecasting for

Unconventional Resources
Lecture 1
Overview

Why Do We Need to Forecast Production?

 Provide estimate of reserves for internal or external
reporting purposes
 Provide basis for economic analysis of future
production

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What Forecasting Techniques Are Used?

 Extrapolation of decline curves
 Basic – e.g., Arps model

 Advanced – e.g., Fetkovich, Blasingame

models
 Analytical well or reservoir simulators
 Numerical well or reservoir simulators
 Analogy with similar wells or reservoirs
 Type curves with distinguishing parameters

 Standard solutions to flow equations

describing transient or stabilized flow

Forecasting Methods of Special Interest in

Unconventional Reservoirs
 Production decline curves – rate-time and
rate-cumulative
 Type curves based on analogy and models
 Production data analysis software
 Advanced decline curve analysis

 Empirical and theoretical models

 Analytical and numerical models

 History match for model calibration

 Forecasting using calibrated model

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Topics Featured in This Course – 1

Basic fluid flow theory
 Transient flow
 Radial flow
 Linear flow
 Constant rate and constant BHP
production
 Radius of investigation
 Boundary-dominated flow

Topics Featured in This Course – 2

 Fundamentals of type curve analysis
 Arps’ decline model and modifications
 Original Arps model and limitations
 Minimum terminal decline methodology
 A priori determination of Arps decline
constant

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Topics Featured in This Course – 3

Alternative decline models
 Advanced decline curve analysis

 Stretched exponential decline model

(SEDM)
 Power-law and modified power-law
model
 Long-duration linear flow model

 Duong model

What’s Required of a Method to Estimate

Reserves Under the U.S. SEC Regulations?
 Regulations now ‘principles based,’ no
longer ‘rules based’
 Implication: More focus on outcomes
(results), less on inputs (how results were
obtained)
 Any method that meets criteria (and
demonstrated to be ‘reliable technology’)
should be acceptable – from basic Arps
decline model to sophisticated numerical
reservoir simulator

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Criteria for SEC Reserves Categories

 1P (proved)
 ‘Reasonably certain’
 Much more likely than not (e.g., 90+% probability)
 Given more data with time, EUR should increase or
remain constant most of the time
 2P (proved plus probable)
 As likely as not (50% probability)
 Business-decision case
 3P (proved plus probable plus possible)
 Possible, but not likely (10% probability)

What Does PRMS Require?

 Basically, same as SEC
 PRMS also principles-based system
 PRMS even more flexible than SEC

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How Can We Demonstrate That We’ve Met

Regulators’ Criteria?
 Select method to estimate reserves
 Choice is ours
 For unchanging group of wells, compare
EUR estimates using preferred method
as reserves estimates are updated
 If EUR consistently constant or increasing, 1P criterion met;
method should be acceptable
 If EUR increasing or constant as often as not, 2P criterion
met
 If EUR, although generally decreasing, appears reasonable
using other checks (e.g., volumetrics and recovery
efficiencies), 3P criterion met

Plan for Course

 Critique methods that have the potential
to satisfy SEC (and PRMS) criteria for 1P
and 2P reserves – the most important
categories

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Production Forecasting for

Unconventional Resources
Lecture 1
Overview