Prospect Evaluation

and
Volumetrics

GEOE 530
METU Geological Engineering
Dr. Zeynep Elif Yıldızel
Petroleum System
• The five elements and processes being explained in the previous weeks. They
are the most important requisites of having oil and gas in place. If one of
them are lacking then you will not have any oil and gas in place. This is called
the Petroleum System.
• In order to evaluate a prospect, the defining of the petroleum system and its
timing are the critical factors to begin with.
• Each evaluation is made upon geologists knowledge and observation abilities
plus its experience. These are all comparative type of evaluations.
• In order to be rational and numerical a prospect should be defined in terms of
numbers and the petroleum system should be graded according to its
functioning.
• In order to understand the petroleum system we use a “magoon diagram”
which is composed of the petroleum system elements and processes.
• Magoon diagrams are to show the relation of the formation of the source
rock, reservoir rock, seal rock, trap and their relation with generation and
migration with timing.
Magoon Diagram

Critical
timing
• Source rock is Silurian aged and reservoir rock is Devonian aged. The second reservoir rock is Permian in age.
• The top seal rock for the first reservoir is U. Devonian to Carboniferous in age and for the second reservoir it is U
Permian in age.
• Trap formation has four stages : L Carboniferous, Top Permian, U Cretaceous and Tertiary
• During these elements were forming, oil generated in Triassic to Jurassic, and gas generated during Jurassic to U
Tertiary
• Critical timing is the third ans the fourt trap formation durations due to regional tectonic. This can result in either
escaping of the hydrocarbons from the reservoir or not.
Petroleum System Event Chart
Hamzah Harbol Vein
Suwaidiyah Karatchok
Gorumlu
Structure

Cudi Prospect
Mardin Group

• All historical geological events concerning the prospect are evaluated

• Petroleum system event chart obtained
• Source rock and quality and maturity are also important parameters
• Reservoir and seal rock qualities are important
• Generation of oil and migration and migration pathway are the major important events in
evaluating the prospects petroleum system
 Prospect Evaluation
• Geological interpretations although supported by data carries,
• Uncertainties : range of possible outcomes
• Chance: likelihood of occurrence
• Risk: treat of loss
• Prospect evaluation is a complex and multi-disciplinary process that is very important on investing money on any
energy resources .
• Two major steps
1. Risk assessment
2. Volumetrics
• The terminology related prospect evaluations are as follows:
• Play: an exploration concept that includes specific source, reservoir and trap type. Play is recognized as
Increasing certainty

prospective trend of potential prospects, but which requires more data acquisition and evaluation to define
specific lead or prospects
• Lead: a possible trap where data is not sufficient to fully map it. Lead is a potential accumulation which is
currently poorly defined and requires more data acquisition and evaluation in order to be classified as a
prospect
• Prospect: a specified trap that has been identified and mapped and contains well enough data to perform
chances of risk assessment, volumetrics and economic analysis in order to calculate the risk of the investment
and has not been drilled yet.
• Why we do prospect evaluation; we want to understand the “Expected Value” of the project. EV can be expressed as
the difference between probability of failure from probability of success, which is the risk we are taken by doing
investment.
• While doing prospect evaluation we have to evaluate the reservoir, source and seal rock quality together with a
mapped trap and generation and migration pathways are in line to source the trap.
Prospect Evaluation
• Prospect evaluation is a kind of risk management
• Risk management is the science of identifying, analyzing
and responding to risk factors throughout the life of a
project. Mitigation of risk in other words.
• Risk analysis is an integrated project assessment under
conditions of uncertainty.
• Why do we do prospect evaluation is to calculate the
“expected value”
• 𝐸𝑉 = 𝑃𝑟𝑜𝑏𝑎𝑏𝑖𝑙𝑖𝑡𝑦𝑠𝑢𝑐𝑐𝑒𝑠 + 𝑃𝑟𝑜𝑏𝑎𝑏𝑖𝑙𝑖𝑡𝑦𝑓𝑎𝑖𝑙𝑢𝑟𝑒
Play, Lead and Prospect
Prospect
Proven Play Map

Lead

• Proven play is one at least contains one discovery

• Lead is a candidate to be a prospect if it could be mapped
Chances of Success (COS)
• Due to critical timing the prospect has a question mark. This uncertainty
should be expressed with numerical values so that any one can understand
the reliability of the prospect. Other wise the prospect is questionable case
against someone's interpretations.
• Risk in the prospect would cause the investor to loose money.
• What is the probability of loosing how much money on this prospect is the
major question that should have rational results.
• Risk is the chance of loss in probability of finding hydrocarbons
• Risk= 1- COS
• COS is the probability of finding hydrocarbons in a specific undrilled
prospect.
• Chances of Success in other words is the numerical value of finding all
the elements and processes of a petroleum system in our prospect in a
correct timing.
• Risk=1-COS
 Chances of Success (COS)

COS= P SR x P RR x P SR x P T x P M-C
GCOS=Play COS x Prospect Specific COS

GRF=1/COS

• All of the elements are independent of each other and assigned a numerical value reflecting the assessors opinion
• They all multiplied to have a risk value which is COS
• GCOS is geological chances of success which is directly dependent on the petroleum system of the area
• Geological Risk Factor is the risk in prospect to come up with a discovery
Prospect A

Prospect
A

• It is mapped and defined properly

• It is bounded by strike slip fault on the west Kemerli Fault
• It is bounded by reverse fault on the south Harmancık falut
• The reservoir is called reservoir rock and refoidal in character. It is a patch reef deposited in the highs of
Maastrichtian.
• Its porosity and permeability is good enough
• There is working petroleum system in the area/basin and Bozova field is the major producing field of the system.
North South Cross Section from Prospect

Harmancık Fayı

Kemerli Fayı
Derdere Fm.
Germav
Marn, shale
Germav
650m Bioclastic
lmst
160m

• There is fault movement of 650m this makes reservoir face to the formation 650m above itself.
• Which is marn and shale so it seals well.
East West Cross Section from Prospect
Well B
A-1

Kemerli Fayı

Gaziantep

Üst Germav

Kastel Derdere

525m

Derdere

Kastel; sandstone shale alternation ,flyhsoidal sequence

• At the east west direction there is an other fault with a throw of 525m. This makes the reservoir
facing with sandstone shale alternation a flyshoidal sequence.
• From this direction the reservoir also sealed. From top there is marn and shale so reservoir also
sealed from top.
Migration Pathways

Prospect
A

• The kitchen area is northeast of the fault and migration pathways are heading the prospect.
• The source rocks are deposited as a thick sequence at the north east of Bozova fault. Their source rock quality is
concerning TOC and kerogene type is good but not perfect. Type II kerogene and ~0.5% TOCs , >445 Tmax, High
HI and good potential in yield (S1+S2).
Magoon Diagram
280

270

260

250 250

240

230

220

210

200 200

190

180

170

160

150 150

140

130

120

110

100 100

90

80

70
65

56

40

35

23

10

0
0
Paleozoyik Mesozoyik Senozoyik

Era
Permiyen

Paleosen

Oligosen

Pliyosen
Miyosen

Period
Kretase

Eosen
Triyas

Jura

Kmk-A
Kmd-sfer Karaboğaz Ana Kaya

E3 H1 E4 Gömülme

Kmd-sfer Türüm

Kmd-sfer Göç

Derdere FM. Rezervuar Rezervuar

Alt Germav
+ Gaziantep Örtü
Üst Germav

Eosen Oligosen Miyosen Kapan

Kratase

• There are 3 source rocks in the area and all them are Cretaceous in age.
• There are 2 reservoirs in the prospect area and both of them lies on the source rock which is good for migration. As
there is usually vertical migration in South East Anatolia and horizontal migration is limited.
• There are 2 seal levels for both reservoirs which is also positive. These seal levels also help for the overburden
which is important for increasing temperature and pressure that is for generation. During the hiatus time the
generation stops which is also a risk.
• The trap formation took place in Cretaceous, and Tertiary tectonics active in the region. But generation and
migration started from Eocene and continued until today. The timing this situation, as the generation and migration
started just before the trap formation is a bit risky.
Calculation of COS
• Assigning numeric values are very critical in this calculating COS.
• All of the elements for a prospect are independent from each other;
however all of them have to work in order to have a valid prospect.
• If any one of them fails or is absent, the prospect will fail as a whole.
• Here the numbers assigned as 1 implies the Play COS. If they are
questionable like below 0.5 then the Prospect COS doesn’t have any
chance to be >0.3.
• COS helps to identify the further technical work.
• If COS for the critical element can not be increased through further
work, then the Prospect most likely will fail if drilled.
• COS is used
• Identification of critical success factor
• To create prospect inventory
• Input into the economics
• Ranking for opportunities
• Investment decision
• Must be run in multiple scenarios of different geological models that is
possible to outcome
• There might be risk of double risking of some elements more than once
• There is natural tendency of being confident with the geological
modelling
Class exercise

• COS=?
• GRF=?
• GCOS=?
Volumetric Calculation
Oil Dry Gas

𝐺𝑅𝑉 𝑥 𝑁: 𝐺 𝑥 ø 𝑥 1 − 𝑆𝑤 𝑥 6.29 𝐺𝑅𝑉 𝑥 𝑁:𝐺 𝑥 ø 𝑥 1−𝑠𝑤 𝑥 𝑆𝐹𝑥 35.31

𝑶𝑰𝑰𝑷 = 𝑥 𝑅𝐹 GIIP= 𝑥 𝑅𝐹
𝐵𝑜 𝐵𝑔

𝑮𝒂𝒔𝒔 = 𝑁𝑝 𝑥 𝐺𝑂𝑅 𝑵𝒑 = 𝐺𝑝 𝑥 𝐶𝐺𝑅 𝑥 103

• GIIP: gas initial in place
• OIIP: oil initially in place: unit is stock tank barrels (stb)
• GRV: gross rock volume (m3)
• GRV: gross rock volume (m3); amount of rock in the
trap above the hydrocarbon • N: G net to gross
• N:G net to gross ration (fraction); % of GRV which is • Ø : porosity
formed reservoir rock
• (1-Sw): Hydrocarbon saturation (fraction);
• Ø:porosity; % of the net reservoir rock occupied by
pores • SF: shrinkage Factor
• (1-Sw): Hydrocarbon saturation (fraction); % of pore • Bg: gas expansion factor (scf/rcf)
space filled with oil, remainder being filled with water
• RF: recovery factor
• Bo: oil formation volume factor (rb/stb)
• 35.31: conversion factor (scf/m3)
• 6.29: conversion factor (bbls/m3)
• Np: condensate volume (stb)
• RF: recovery factor; associated gas volume (scf)
• Np: oil volume (stb) • Gp: gas volume (scf)

• GOR: Gas oil ratio (scf/stb) • CGR: condensate gas ratio (stb/mmscf)
Net pay, Shape Factor, Sw and ø
Volume of rock
above OWC

𝑣𝑜𝑙𝑢𝑚𝑒 𝑜𝑓 𝑝𝑜𝑟𝑒𝑠𝑝𝑎𝑐𝑒
∅=
𝑡𝑜𝑡𝑎𝑙 𝑣𝑜𝑙𝑢𝑚𝑒 𝑜𝑓 𝑟𝑜𝑐𝑘

Sw=volume of available porespace that is occupied by water

Swirr= residual water saturation that is irreducible
OWC and Bo/Bg

Bo/Bg
• Formation volume Factor (B) is the reservoir volumes to surface
volumes at standard temperature and pressure conditions (14.7 psi,
60oF)
• Bo values >1
• Bg values >100
• Bo calculated using expected reservoir temperature and pressure and
GOR of the crude oil
• GOR is the primary controlling factor
• Higher GOR the higher the reservoir pressure and lighter the crude
Hydrocarbon Saturation

• There is always irreducible water around the grains

• If the angle between rock and water < 90o then oil wet
• If the angle between rock and water >90o then water wet
• Calculated from logs
RF
• RF: the proportion of the oil or gas that can be extracted from the reservoir (Gluyas
and Swarbric, 2004)
• Dependent on the energy available within the reservoir, the drive mechanism
• Drive mechanism are sources of energy to overcome capillary forces, move
hydrocarbons and get fluids to surface
• Primary is the reservoirs natural energy
• Secondary is the replacement of some fluids to maintain reservoirs natural energy
which is water injection or gas injection
• Oil recovery factors are between 0.5 to 70% with secondary recovery, usually around
%20
• Gas recovery factors are 0% to 90+%
• Dependent upon the rock, fluids, development schemes and commercial factors
Gas Properties
Natural Gas Dry Gas Wet Gas

• Hydrocarbons in gas phase not
condensable at standard
temperature and pressure
(STP= 20oC (68oF) and
atmospheric pressure)
• Methane (CH4)
• Ethane (C2H6)
• Propane (C3H8)
• N-buthane (C4H10)
• First liquid at STP
• N-pentane (C5H12)
• ~100% methane (CH4) • Proporation of ethane and
heavier molecules > %4 - %5
• CGR < 10 bbls / mmscf
• CGR > 7.143 bbls/mmscf (~40
• Typical value 5 bbls/mmscf m3 / 10 6 m3)
• No gas shrinkage • Typical value 25 bbls / mmscf
(~140 m3 / 10 6 m3)
• Range between 7-66 bbls/
Natural Gas Liquids mmscf (~ 40 – 370 m3 / 10 6
m3 )
• Typical wet gas 25 bbls of NGL • Produces at a constant CGR
economically recoverable mmscf during depletion
comprises 2 forms
• Typical shrinkage factor 0.8-
• Condensate proportion of wet 0.98 (%80-%98)
gas that is liquid at STP
• Liquidified Petroleum Gas
(LPG) proportion of wet gas
that is gaseous at STP but is
readily liquidified and easily
extractable
• Mostly propane and butane
Gas Properties
Liquidified Natural Gas Gas Hydrates

• Methane in liquid phase at • Methane becomes solid when

160oC (-270oF) at atmospheric frozen and wet
conditions • Methane hydrates occur in
• Liquefaction of methane permafrost zones, especially
reduces its volume by a factor below the sea floor in polar
more than 600 which makes it regions
easier to transport by
• 1m3 of hydrate contains 50-
cryogenic tankers
170m3 of gas
• 1kg of LNG represents ~1.5 m3
of gas
• Not to be confused with NGL
and LPG
Resource Calculation
• There are three methods for resource assessment
• Deterministic: low, base and high cases
• Multiple scenario: comprises several mutually exclusive cases from P90, P50
and P10 outcomes can be estimated
• Probabilistic: incorporates full range of uncertainties, dependencies,
correlations and probabilities, produces continues output distribution from
which any percentile probability can be determined, uses such as Monte Carlo
Analysis
• Analysis of pre drill volume predictions and actual outcomes show that G&G teams
over estimate potential resources by volumes %30-%80
Resource Assessment Approach
Deterministic
• 3 discrete representative cases
• Three cases may not capture the
full impact of the uncertainties
• May not capture full range of
possible outcome
• Three representative cases that
capture the perceived range of
uncertainties and dependencies
Multiple Scenarios
• Multiple scenarios are mutually
exclusive alternatives in which
probabilities are assigned to each
alternative all of which sum to 1.0
• Provides a means of defining and
combining discrete alternative
models.
• Some uncertainties are difficult to
capture in a single analysis,
Probabilistic Method
Deterministic Approach
Low Case Base Case High Case
Low Area Mean Area High Area P10 14 km2
P50 12km2

Low GRV Mean GRV High GRV

P90 10km2

Low N:G Mean N:G High N:G

Low ø Mean ø High ø
Low So Mean So High So
Low Bo Mean Bo High Bo
Low RF Mean RF High Rf
Low Resource Mean Resource High Resource
Multiple Scenarios
• Uncertainty is the distribution of
possible reserves
• Risk is the chance of finding at least
the minimum reserves defined in
the reserve distribution
• Helps to identify the COS in
mutually exclusive alternatives
where all probabilities are summed
up to 1.0
• Defines probability of occurrence
for each case
Class exercise

GRV= area x gross reservoir thickness

Porosity Calculation
 Homework 1

• The aim of this homework is to make you understand how the results will
change depending on your interpretation of data
• This is possible in million dollar projects if you assume or interpret the data
wrong then you will loose huge amount of money
• Also neither economists, nor any other discipline can asses economic values of
the project by themselves as this is a multidisciplinary business
Resource Classification

• Prospective resources: those quantities of petroleum estimated, as of a given date, to be potentially recoverable from
undiscovered accumulations by application of future development projects.
• Contingent resources: when a prospective resource is drilled and a hydrocarbon is known to be present but the commerciality of
the accumulations not known or not clear enough due to one or more contingencies.
• Reserves : clarification of the contingent resources by adding and evaluation of data for the accumulation by drilling more wells
and other technical studies.
• 1P: proven reserves
• 2P: Proven plus probable
• 3P: proven plus probable plus possible
Terminology in Reserv Base

Contingent , prospective
• Contingent: recoverable from known
accumulations but not yet considered
to be mature for commercial
development.
• Prospective: potentially recoverable
from an undiscovered accumulation.

1P, 2P, 3P
• 1P: proven reserves
• 2P: Proven Probabale
• 3P: Proven Probable Possible
From Resource to Reserves
Terminology in Project Maturity Base
• Play and Lead need more
G&G studies
• Prospect is the one that is
viable for exploration well
drilling
• When discovery is made is it
commercial or non commercial
• If commercial then you need
more G& G work to determine
the reserve volume to make
development plans
• After development plans are
realized then you are at
production stage
From Play to Prospect

Economic
Economics undetermined

Sub Economic
Reserve Classification of U
• Reasonably Assured Resources (RAR)
include uranium that occurs in known
mineral deposits of delineated size, grade
and configuration such that the
quantities would be recovered within
given production cost ranges with
currently proven mining technology
• Estimated Assured Resources (EAR)
refers to a less well known material
associated with the same deposit
• Speculative Resources (SR) refers to
resources contained in yet to be
discovered deposits that are believed to
exits in other geologically favorable areas
• The cost for production of a kg of U is
usually a criteria for reserve calculation.
The costs above 80$/ kg U is usually
considered to be sub economic; however
this situation is definitely is dependent to
the demand
Reserve- Resource

• As the geological knowledge on the mineral increases the economy of the resources
are more confidently calculated
Mining

• Mining exploration is more or less the same as oil and any other exploration
• Licensing
• G&G studies
• Drilling
• Interpretation of the mine area, mapping subsurface and other parameters
• If it is estimated that there is economically viable ore body then production starts
Types of Uranium Deposits
Reserve Calculation
• Average Grade: The concentration of a mineral in the ore body (i.e. % or g/t)
• Strike length: The length in which the mineralization is found in the ore body
(horizontally)
• Depth: The depth in which the mineralization is found in the ore body (vertically)
• Width: The width in which the mineralization is found in a drill hole
• Specific Gravity : The density of the ore body

• It can not be assume that the complete ore body contains the same grade
• a typical ore body does not fit into a right angled box of three dimensions. So the
structural mapping of the ore body is the major issue in order to find out the area of
the deposit.
• There is a cut off grade which is the break even grade below the economical value,
which makes the mine economically viable.

𝑅=𝑇𝑥𝐺

𝑇 = 𝑆𝑡𝑟𝑖𝑘𝑒 𝑙𝑒𝑛𝑔𝑡ℎ 𝑥 𝐷𝑒𝑡𝑝ℎ 𝑥 𝑊𝑖𝑑𝑡ℎ 𝑥 𝑆𝑝𝑒𝑐𝑖𝑓𝑖𝑐 𝐺𝑟𝑎𝑣𝑖𝑡𝑦

Class Exercise

• Calculate Reserves