Reserve Estimation

• Oil reserves
Oil reserves are the amount of technically and economically recoverable
oil. Reserves may be for a well, for a reservoir, for a field, for a nation, or
for the world. Different classifications of reserves are related to their
degree of certainty.

• Oil in Place
The total estimated amount of oil in an oil reservoir, including both
producible and non-producible oil, is called oil in place.

However, because of reservoir characteristics and limitations in petroleum

extraction technologies, only a fraction of this oil can be brought to the
surface, and it is only this producible fraction that is considered to
be reserves.

• Recovery Factor
The ratio of producible oil reserves to total oil in place for a given field is
often referred to as the recovery factor.
 Reserve Classification
• All reserve estimates involve uncertainty, depending on the amount of
reliable geologic and engineering data available and the interpretation of
those data. The relative degree of uncertainty can be expressed by
dividing reserves into two principal classifications—"proven" (or "proved")
and "unproven" (or "unproved").

Proven
Developed Probable
Proven Unproven

Proven Un Possible
developed
 Proven Reserves
• Proven reserves are those reserves claimed to have a reasonable
certainty (normally at least 90% confidence) of being recoverable under
existing economic and political conditions, with existing technology.
Industry specialists refer to this as P90 (i.e., having a 90% certainty of
being produced). Proven reserves are also known in the industry as 1P.

• PD reserves are reserves that can be produced with existing wells and
perforations, or from additional reservoirs where minimal additional
investment (operating expense) is required.

• PUD reserves require additional capital investment (e.g., drilling new

wells) to bring the oil to the surface.
 Unproven Reserves
• Unproven reserves are based on geological and/or engineering data
similar to that used in estimates of proven reserves, but technical,
contractual, or regulatory uncertainties preclude such reserves being
classified as unproven. Unproven reserves may be used internally by oil
companies and government agencies for future planning purposes but are
not routinely compiled.

• Probable reserves are attributed to known accumulations and claim a 50%

confidence level of recovery. Industry specialists refer to them as "P50"
(i.e., having a 50% certainty of being produced). These reserves are also
referred to in the industry as "2P“.

• Possible reserves are attributed to known accumulations that have a less

likely chance of being recovered than probable reserves. This term is often
used for reserves which are claimed to have at least a 10% certainty of
being produced ("P10"). They are referred to in the industry as "3P“.
 Reserves Estimation
• The process of estimating oil and gas reserves for a producing field
continues throughout the life of the field. There is always uncertainty in
making such estimates.

The level of uncertainty is affected by the following factors:

1. Reservoir type,
2. Source of reservoir energy,
3. Quantity and quality of the geological, engineering, and geophysical
data,
4. Assumptions adopted when making the estimate,
5. Available technology, and
6. Experience and knowledge of the evaluator.
 Magnitude of uncertainty in reserves estimates

The magnitude of
uncertainty, however,
decreases with time until
the economic limit is
reached and the ultimate
recovery is realized
 Oil and Gas Reserves Estimation methods

1. Analogy,
2. Volumetric,
3. Decline analysis,
4. Material balance calculations for oil reservoirs,
5. Material balance calculations for gas reservoirs,
6. Reservoir simulation.

• In the early stages of development, reserves estimates are

restricted to the analogy and volumetric calculations.
 Analogy
• The analogy method is applied by comparing factors for the analogous
and current fields or wells.
• A close-to-abandonment analogous field is taken as an approximate to the
current field.
• This method is most useful when running the economics on the current
field; which is supposed to be an exploratory field.

• The analogy method is applied by comparing the following factors for the
analogous and current fields or wells:
 Recovery Factor (RF),
 Barrels per Acre-Foot (BAF), and
 Estimated Ultimate Recovery (EUR)
• The RF of a close-to-abandonment analogous field is taken as an
approximate value for another field. Similarly, the BAF, which is calculated
by the following equation is assumed to be the same for the analogous
and current field or well.

• Comparing EUR’s is done during the exploratory phase.

• Care, however, should be taken when applying analogy technique.

For example, care should be taken to make sure that the field or well being
used for analogy is indeed analogous. That said, a dolomite reservoir with
volatile crude oil will never be analogous to a sandstone reservoir with
black oil.
 Volumetric Method

• This provides an estimate of the hydrocarbons-in-place, from which

ultimate recovery can be estimated by using an appropriate
recovery factor.

• The volumetric method entails determining the physical size of the

reservoir, the pore volume within the rock matrix, and the fluid
content within the void space.

• Note that the reservoir area (A) and the recovery factor (RF) are
often subject to large errors. They are usually determined from
analogy or correlations.
 Calculation of Oil in Place by Volumetric
Method

• N(t) = oil in place at time t, STB

• Vb = bulk reservoir volume, RB = 7758 A h
• 7758 = RB/acre-ft
• A = reservoir area, acres
• H = average reservoir thickness, ft
• φ = average reservoir porosity, fraction
• So(t) = average oil saturation, fraction
• Bo(p) = oil formation volume factor at reservoir pressure p, RB/STB
 Estimated Ultimate Recovery

•Where N(t) is the oil in place at time t, STB, and

•RF is the recovery factor, fraction.
 Calculation of Gas in Place by Volumetric
Method
• G(t) = gas in place at time t, SCF
• Vb = bulk reservoir volume, CF = 43560 A h
• 43560 = CF/acre-ft
• A = reservoir area, acres
• h = average reservoir thickness, ft
• φ = average reservoir porosity, fraction
• Sg(t) = average gas saturation, fraction
• Bg(p) = gas formation volume factor at reservoir pressure p, CF/SCF
Estimated Ultimate Recovery

Where G(t) is the gas in place at time t, SCF, and

RF is the recovery factor, fraction.
 Example #1: Given the following data for the Hout
oil field in Saudi Arabia
 Area = 26,700 acres
 Net productive thickness = 49 ft
 Porosity = 8%
 Average Swi = 45%
 Initial reservoir pressure, pi = 2980 psia
 Abandonment pressure, pa = 300 psia
 Bo at pi = 1.68 bbl/STB
 Bo at pa = 1.15 bbl/STB
 Sg at pa = 34%
 Sor after water invasion = 20%

Calculate:
1. Initial oil in place
2. Oil in place after volumetric depletion to abandonment pressure
3. Oil in place after water invasion at initial pressure
4. Oil reserve and Recovery Factor by volumetric depletion to abandonment pressure
5. Oil reserve and Recovery factor by full water drive
 Solution:
• Reservoir bulk volume

Vb = 7758 x A x h = 7758 x 26,700 x 49 = 10.15 MMM bbl

1. The initial oil in place is given by:

2. The oil in place after volumetric depletion to abandonment pressure is

given by:
3. The oil in place after water invasion at initial reservoir pressure is given by:

4. The oil reserve by volumetric depletion:

i.e. RF = 118/266 = 44%

5. The oil reserve by full water drive

i.e. RF = 169/266 = 64%

 Example #2: Given the following data
for the Bell gas field

• Area = 160 acres

• Net productive thickness = 40 ft
• Initial reservoir pressure = 3250 psia
• Porosity = 22%
• Connate water = 23%
• Initial gas FVF = 0.00533 ft3/SCF
• Gas FVF at 2500 psia = 0.00667 ft3/SCF
• Gas FVF at 500 psia = 0.03623 ft3/SCF
• Sgr after water invasion = 34%
 Calculate:

1. Initial gas in place

2. Gas in place after volumetric depletion to 2500 psia
3. Gas in place after volumetric depletion to 500 psia
4. Gas in place after water invasion at 3250 psia
5. Gas in place after water invasion at 2500 psia
6. Gas in place after water invasion at 500 psia
7. Gas reserve by volumetric depletion to 500 psia
8. Gas reserve by full water drive; i.e. at 3250 psia
9. Gas reserve by partial water drive; i.e. at 2500 psia
 Solution:
• Let’s start by calculating the reservoir bulk
volume:

• 1.

• 2.

• 3.
4.

5.

6.

7.

8.

9.
 Decline curve method
• A decline curve of a well is simply a plot of the well’s production rate on
the y axis n versus time on the x-axis.

• The plot is usually done on a semi-log paper; i.e. the y-axis is logarithmic
and the x-axis is linear;

• When the data plots as a straight line, it is modelled with a constant

percentage decline “exponential decline”.

• When the data plots concave upward, it is modelled with a “hyperbolic

decline”.

• A special case of the hyperbolic decline is known as “harmonic decline”

• The most common decline curve relationship is the constant percentage
decline (exponential).

• With more and more low productivity wells coming on stream, there is
currently a swing toward decline rates proportional to production rates
(hyperbolic and harmonic).

• Decline curves are the most common means of forecasting production.

They have many advantages:

 Data is easy to obtain,

 They are easy to plot,
 They yield results on a time basis, and
 They are easy to analyze.
 Exponential Decline
• As mentioned, in the exponential decline, the well’s production data plots
as a straight line on a semilog paper.

• The equation of the straight line on the semilog paper is given by:

• Where:
 q = well’s production rate at time t, STB/day
 qi = well’s production rate at time 0, STB/day
 D = nominal exponential decline rate, 1/day
 t = time, day
 The following table summarizes the
equations used in exponential decline.
 Hyperbolic Decline
• Alternatively, if the well’s production data plotted on a semilog paper concaves
upward, then it is modeled with a hyperbolic decline.

• The equation of the hyperbolic decline is given by:

• Where:
 q = well’s production rate at time t, STB/day
 qi = well’s production rate at time 0, STB/day
 Di = initial nominal exponential decline rate (t = 0), 1/day
 b = hyperbolic exponent
 t = time, day
 The following table summarizes the
equations used in hyperbolic decline:
 Harmonic Decline
• A special case of the hyperbolic decline is known as “harmonic decline”,
where b is taken to be equal to 1.

• The following table summarizes the equations used in harmonic decline:

 Example #3:
• A well has declined from 100 BOPD to 96 BOPD during a one
month period. Assuming exponential decline, predict the rate after 11
more months and after 22.5 months. Also predict the amount of oil
produced after one year.
 Solution:
1. Calculate the effective decline rate per month:

2. Calculate the nominal decline rate per month:

3. Calculate the rate after 11 more months:

4. Calculate the rate after 22.5 months:

5. Calculate the nominal decline rate per year:

6. Calculate the cumulative oil produced after one year:

 Example #4:

Assuming hyperbolic decline, predict the amount of oil produced for five
years.
 Solution:
1. Calculate the well flow rate at the end of each year for five years using:

2. Calculate the cumulative oil produced at the end of each year for five years
using:
 3. Form the following table:

The amount of oil produced for five years.